Health Committee on Dec. 11th, 2020

[The Chair, Liberal, Ron McKinnon]

I call this meeting to order.

Welcome, everyone, to meeting number 13 of the House of Commons Standing Committee on Health. The committee is meeting today to study the Patented Medicine Prices Review Board's guidelines. Then we will proceed to the clause-by-clause consideration of Bill C-210, an act to amend the Canada Revenue Agency Act, regarding organ and tissue donors.

I thank the witnesses for appearing today. From Best Medicines Coalition, we have John Adams, who is the board chair. From Boehringer Ingelheim Canada Limited, we have Mehmood Alibhai, director, national policy and patient access, and Annie Beauchemin, executive director, patient access, pricing, health care affairs solutions. From Canadian Life and Health Insurance Association, we have Stephen Frank, president and chief executive officer, and from Independent Voices for Safe and Effective Drugs, we have Colleen Fuller.

I will start the meeting by providing you with some information, following the motion that was adopted in the House on Wednesday, September 13, 2020. The committee is now sitting in a hybrid format, meaning that members can participate either in person or by video conference. All members, regardless of their method of participation, will be counted for the purpose of quorum. The committee's power to sit is, however, limited by the priority use of House resources, which is determined by the whips. All questions must be decided by recorded vote unless the committee disposes of them with unanimous consent or on division. Finally, the committee may deliberate in camera, provided that it takes into account the potential risks to confidentiality inherent to such deliberations with remote participants.

The proceedings will be made available via the House of Commons website and, so you are aware, the webcast will always show the person speaking rather than the entirety of the committee.

To ensure an orderly meeting, I will outline a few rules to follow. Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of floor, English or French. Before speaking, click on the microphone icon to activate your own mike, and when you have finished speaking, please put your mike on mute to minimize any interference.

As a reminder, all comments by members and witnesses should be addressed through the chair. Should members need to request the floor outside their designated time for questions, they should activate their mike and state that they have a point of order. Members should do likewise if they wish to intervene on a point of order that has been raised by another member. In the event that a debate ensues, members should use the “raise hand” function, which will signal to the chair your interest to speak and create a speakers list. In order to do so, you should click on “Participants” at the bottom of the screen. When the list pops up, you will see next to your name that you can click “raise hand”.

When speaking, please speak slowly and clearly. Unless there are exceptional circumstances, the use of headsets with a boom microphone is mandatory for everyone participating remotely. Should any technical challenges arise, please advise the chair. Please note that we might need to suspend a few minutes, as we need to ensure that all members are able to participate fully.

For those who are participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room, keeping in mind the directives from the Board of Internal Economy regarding masking and health protocols. Should you wish to get my attention, signal me with a hand gesture, or at an appropriate time, call out my name. Should you wish to raise a point of order, wait for an appropriate time and indicate to me clearly that you wish to raise a point of order.

With regard to a speaking list, the committee clerk and I will do the best we can to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person.

Thank you all for listening to that long housekeeping speech one more time.

Before I ask the witnesses to make their statements, I will advise the committee that we have received a letter from the law clerk indicating the status of the document production order. I would ask the committee for authorization to make this letter and its addendum public.

Do I have the approval of the committee to do this?

[Some hon. members]

Agreed.

[The Chair, Liberal, Ron McKinnon]

Thank you. The letter will be made public.

We will now continue with the witnesses.

Witnesses will have up to 10 minutes to make their statements. I will be using cards, a red card and a yellow card. The yellow card means there's one minute before your time is up. When you see the red card your time is up, so please try to wrap up fairly quickly. Thank you, all.

We'll start with the Best Medicines Coalition.

Mr. Adams, board chair, please go ahead for 10 minutes.

[John Adams, Board Chair, Best Medicines Coalition]

Chair and members, we appreciate your invitation to be here today, and we thank the committee and staff for their work throughout the pandemic challenges.

I represent a coalition of 30 patient organizations, national and regional, working together through the Best Medicines Coalition to support patients and advocate for better access to life-saving medicines. I volunteer as the chair of the board of directors of BMC.

Our non-profit supports any actions by governments, public or private insurers and civil society that can deliver greater access to medicines for Canadian patients. We're a small but mighty organization made up of broad-based charities and grassroots groups, including the one I lead, Canadian PKU and Allied Disorders, which involves rare brain-threatening diseases. These groups involve patients and caregivers to improve care and are active in research, patient services, education and issue advocacy.

BMC member organizations include diverse conditions, including mental illness, arthritis, asthma, blindness, Parkinson's, psoriasis and cancers, including breast, kidney, lymphoma and ovarian, and their survivors.

I am here today as a patient advocate, because when our youngest child arrived, the miracle of universal newborn screening discovered his rare genetic condition, enabling immediate therapy. As an adult, he volunteered for a clinical trial for its first drug, and that drug transforms his brain and life. His mother, my wife, died in 2014 of two neurodegenerative diseases, ALS and FTD, which still do not have effective treatments. It is a big deal when we can move lethal diseases like ALS from untreatable to treatable, and it is a big deal when we can permanently fix genetic problems, such as my son's, in the new era of cell and gene therapies.

Let me address the important question of real, perceived or imagined conflicts of interest. I happily completed the committee's disclosure form and want to address how the Best Medicines Coalition funds and governs its activities. We do not sell a service. We do not have union or other dues. We don't have university tenure or other job security. We don't charge patients to advocate on their behalf.

If governments establish a means to fund our efforts to support patients in the public interest, we will apply for that funding. This is not without precedent, as it exists in the context of climate change advocacy, telecommunications regulation or legal challenges for human or charter rights. We ask HESA to recommend such public interest funding.

BMC accepts funding from the pharmaceutical industry for our patient support activities. We make no secret of this and are aware of possible perceptions. It is why this funding is received with an explicit agreement that funding does not influence our policies, advocacies or operations in any manner. All activities and interactions are pursued within a framework of integrity. BMC and its member organizations adhere to a code of conduct regarding funding, which is publicly available on our website. All initiatives are conceived and developed in and by the organization, aligned with its missions and goals, without influence from any funder on content, messaging or execution. I'd be pleased to answer questions on this, and I trust that we all must be transparent about all our conflicts, perceived or otherwise.

The matter at hand today is the government's approach on drug prices and the critical risk this poses to some Canadian patients. Our focus is ensuring that all Canadians have access to medicines needed when needed. Medical necessity is paramount for all patients. We support the need to make medicines more affordable for all patients, especially those who pay out of pocket, and we support the goal of actual prices in line with similar countries. We also believe regulations and guidelines must encourage, not deter, new medicines and vaccines plus those clinical trials sponsored by drug developers, which are important to patient volunteers in providing early access to promising new therapies, as was the case for my son.

There's a natural tension between how much insurers are willing to pay and patient access to medicine. Whether we like it or not, pharmaceuticals are a global market and Canada is competing globally to be an attractive market. This is clear in terms of medicines, vaccines and PPE.

If Canada regulates prices too low, the patients we represent will not gain access to life-altering or life-saving medications. If prices go too high, public insurance systems could become overwhelmed and unsustainable. This would be disastrous for patients and taxpayers alike. The challenge for Parliament, government and PMPRB is to balance those interests. It's not an easy task.

The government and PMPRB decided to move forward with their approach despite uncertainties on patient impacts. This is at the core of our concern. At this committee, PMPRB was unable to tell when certain conditions in the guidelines will come into effect. Consider that a global entity is deciding on the sequence of product launches and Canada's processes and pricing rules lack clarity for the foreseeable future, why would it be a surprise that a new medication or indication would not be launched in Canada?

This government is unwisely taking on significant risks and the consequences will be borne by patients. We are not willing to provide informed consent. As written, the PMPRB regulations and guidelines have not balanced price and access. Specifically, anticipated price reductions go beyond original intent, and initial evidence shows significant negative impact: a decline in new drug introductions and reductions in new clinical trials.

This government confirmed the legitimacy of these concerns and, in my view, lost the moral high ground when it exempted COVID vaccines and drugs from the PMPRB rules. Why exempt COVID and not other lethal diseases?

A frequent criticism is that few new drugs provide significant additional benefits to patients. COVID vaccines reveal this but also show that it's not helpful. We have one approved vaccine today. It is a breakthrough. Other vaccines may be approved, but the others will not likely offer a substantial clinical benefit over that first approved vaccine. It's clear that our health systems and individuals will benefit substantially from access to many approved vaccines, even if only the very first one is a breakthrough. That is how innovation works.

A key marker for patient communities is whether medicines will be available to Canadians both affordably and in a timely manner. Since the announcement of the new rules, applications for new drugs have declined compared to similar countries. This is troubling.

Health Canada and PMPRB want to lower drug prices to reflect what the public health system is willing to pay or able to pay. Nothing in these changes makes it certain that health systems will deliver patient access to medicines at these prices. There could be a double whammy for patients. Price regulations might mean new drugs will not come and, if they do finally come, the system still may not cover them.

We wish to express four recommendations for this committee to consider.

First, the Best Medicines Coalition supports step-by-step implementation to lower drug prices. PMPRB indicated some phasing. They did not articulate when and what would be phased. We ask for clarity and decisions based on best evidence. We urge this committee to recommend that the federal government, through cabinet, direct a stay of implementation of parts of the regulations and guidelines, deferring the novel economic factors to a second stage pending further study and consultation. The new basket of comparator countries should proceed to bring down list prices immediately, especially for those patients who pay out of pocket, which, I point out, represents 21% of all drug spending in Canada.

Second, BMC recommends that this committee call for greater policy-making disclosure, and we support any efforts of the committee to bring about that transparency. The government should disclose inputs provided as part of formal consultations and otherwise, including analysis of the nature and breadth of concerns and how concerns have been addressed or will be mitigated. Further, it is important that the government and PMPRB disclose correspondence and other inputs from provinces and territories.

Third, the Best Medicines Coalition asks that this committee recommend that the government develop and publish comprehensive evidence, including initial impacts on critical markers of policy success or failure; that is, key metrics of introductions of new medicines and initiation of clinical trials sponsored by drug developers. There is a need for disclosure regarding the government's and PMPRB's assumptions, which the regulations and guidelines rely upon. We urge this committee to request that the PMPRB case studies on specific drugs back in 2018, prepared to show the impact of possible proposals, be updated and published based on the final regulations and guidelines.

Fourth, the Best Medicines Coalition asks that this committee recommend that the government study and provide public interest funding so that the voices of patients and their needs and interests can be more adequately represented in public policy and regulatory matters, including PMPRB.

I would be pleased to answer any questions.

Thank you.

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Adams.

We'll go now to Boehringer Ingelheim Canada Limited, with either Mr. Alibhai or Ms. Beauchemin.

Please go ahead for 10 minutes.

[Annie Beauchemin, Executive Director, Patient Access, Pricing, HealthCare Affairs Solutions, Boehringer Ingelheim Canada Ltd.]

Good afternoon.

My name is Annie Beauchemin, and I'm with Boehringer Ingelheim. I am joined by my colleague, Mehmood Alibhai.

Thank you, Mr. Chair and honourable members of the Standing Committee on Health, for the opportunity and for inviting us to provide testimony today. We appreciate it, especially given the circumstances we find ourselves in.

As we all know, the COVID-19 pandemic has truly transformed our society this year. We want to start by thanking you for all your ongoing work in the face of adversity, particularly your efforts to continue the important work that Canadians elected you to undertake in Parliament.

Since Boehringer Ingelheim began operating in Canada almost 40 years ago, we have proudly played an integral role in the health of Canadians. Headquartered in Burlington, Ontario, we employ approximately 600 people across Canada, and we are committed to finding medical breakthroughs and investing in research, development and medicine therapies that fulfill unmet medical needs.

We're a different kind of company in that we are one of the world's leading pharmaceutical companies, but what makes us unique is the fact that we're still family owned. We were founded over 130 years ago by Albert Boehringer, and we strive each day to live up to the high ethical standards he set.

Albert Boehringer set the tone for the company culture that we continue today, which prides itself in supporting employees and our local communities, guided by our values of trust, respect, empathy and passion for the work we do. Our vision is value through innovation. Simply put, this means that we aim to find new ways to improve health and provide value by being innovative. We are committed to the development of innovative, cost-effective medications that, again, fulfill unmet medical needs,

Through our participation in medical and pharmaceutical research for both humans and animals and health system change projects—we have many of those—we have contributed to the significant improvements in health care and have developed innovative and cost-saving medicines.

Our health care system improvement projects are pharmaceutically agnostic—they are unbranded—and the Boehringer family mandates that we have these initiatives that focus on optimizing patient outcomes and improving health—

[Luc Thériault, Bloc, Montcalm, QC]

Excuse me, Mr. Chair.

Excuse me, Ms. Beauchemin.

There hasn't been interpretation for some time.

Also, Mr. Chair, I hope it won't happen again, but you may have noticed that I was disconnected for quite some time during Mr. Adams' testimony. So it's not a good day for us in terms of logistics and hardware.

If you could find out why I don't have an interpretation anymore, that would be very helpful.

Thank you.

[Annie Beauchemin]

Would you like me to continue?

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Thériault.

Ms. Beauchemin, would you back up just a paragraph or two? I'll stop your time, and we'll see if the translation is coming through.

Go ahead, please.

[Annie Beauchemin]

Our vision is value through innovation. Simply put, this means we want to find new and better ways of improving health, and we provide value by being innovative. We are committed to the development of innovative, cost-saving medications that fulfill unmet medical needs.

Through our participation in medical and pharmaceutical research for both humans and animals and health system projects—we have a number of those ongoing—we've contributed to significant improvement in health care and have developed innovative and cost-effective medicines.

Our health care system improvement projects are unbranded and pharmaceutically agnostic. The Boehringer family mandates that we have these projects that focus on optimizing patient outcomes and improving health system efficiency, contributing to the sustainability of the health care system.

In Canada, Boehringer Ingelheim conducts and sponsors clinical trials to establish the safety and efficacy of the drugs we develop. Our key therapeutic areas in Canada are cardiometabolic diseases, specialty care including oncologies such as lung cancer and progressing fibrosing lung diseases, and respiratory diseases such as asthma and chronic obstructive pulmonary disease.

In a given year, Boehringer Ingelheim is involved in up to 70 clinical trials. As you can imagine, 2020 has not been a restful year for us either. Since we understood what the world was facing with COVID-19, we've been hard at work to understand the virus and create innovative ways to stem its catastrophic effects on our society and our most vulnerable.

In addition, we've been actively testing existing and new compounds that can help to prevent or alleviate some of the devastating organ damage experienced by individuals who contract COVID-19. We are now in phase two of a therapeutic option that could help up to 85% of our sickest patients afflicted with COVID-19 and who are admitted to ICUs with acute respiratory distress syndrome. Should the therapy be approved, it will reduce the need for ventilators among the most severely affected patients.

As a company founded in 1885, more than a century ago, we've always taken the long view of our work's impact. We plan in generations and focus on long-term performance. Being independent and family owned allows us to pursue that vision that we believe, in turn, has allowed us to have the greatest impact in life sciences.

Independence also allows us to pursue initiatives and endeavours where we believe we can do the most good. It means we can focus on solving some of the most complex health problems our country faces and give us an opportunity to be involved in evolving the patient experience and creating lasting change.

We've been involved in these system-changing initiatives for almost a decade in Canada. Unfortunately, none of the resources we've invested in these areas and in these projects are recognized by the Patented Medicines Prices Review Board.

For example, in September 2020 we were pleased to announce the creation of Bridging HOPE, helping others through palliative care education, an industry-first collaboration with Pallium Canada to improve the quality and accessibility of palliative care in Canada. Together we're equipping health care providers with the skills and tools to provide better palliative care and support patients with life-limiting illnesses and their families, addressing an urgent need that will only increase as our population ages.

I'll go over to you, Mehmood.

[Mehmood Alibhai, Director, National Policy and Patient Access, Boehringer Ingelheim Canada Ltd.]

Thank you, Annie.

Thank you, Mr. Chair, and honorary members as well.

As a demonstration of our commitment to work with Canadians to solve problems that result in optimized outcomes, for the past three years we have been working with an indigenous-led health policy group to develop an indigenous health policy framework. I should say that one of you has participated in this endeavour. A number of you have been briefed about the work we're doing with the indigenous population.

This indigenous-led, indigenous-informed framework will guide, again, the principled approach that Boehringer will engage in with indigenous communities in partnerships in health system solutions, which are, as Annie mentioned, pharmaceutically agnostic. That is the mandate of the family. That again demonstrates our commitment.

Our mission compels us to invest deeply in research and innovation to bring some of the most advanced therapeutics and medicines to Canadians. The latest regulations would jeopardize our ability to continue funding these innovative projects and research.

Boehringer Ingelheim supports a sustainable health care system in Canada and invests heavily in R and D. We expect to bring new medications to market, and Canadians benefit from early access to life-changing medications through clinical trials, and thereafter, as a prioritized country seeking regulatory review and the launch of new drugs.

However, the model that has enabled us to serve our patients for over a century is threatened by the final guidelines issued by PMPRB. Simply put, we believe the guidelines will ultimately discourage or significantly delay the introduction of new, life-saving medicines and investments in research and development, and delay performing clinical trials in Canada and the prioritization of Canada as a market to launch new medicines.

This point cannot be ignored. The intent of the PMPRB will not matter if it ultimately creates fewer innovative medicines and treatments, fewer clinical trials, fewer innovative health care system change partnerships and less access for Canadians. Intention needs to be met with well-considered, well-developed policy, and that is not where the PMPRB has currently landed with its guidelines.

One of the central principles of the life sciences industry is a predictable process by which patentees can access the market for a drug, invest in research and innovation, and bring it forward for approval to be given to the patients who need it the most. The guidelines bring the PMPRB outside of its original intent as a patent abuse regulator and represent a substantial incursion into an exclusive provincial jurisdiction, namely price control. This process will undermine activities exercised by the provinces that today include input from patients and experts. PMPRB will create significant uncertainty for any company considering investing time and resources in bringing forward innovative medicines.

In keeping with the time, we urge the committee and the federal government to reconsider these guidelines and the regulations that underpin them. The current guidelines are creating uncertainty and will create unintended consequences on business viability and, therefore, access to life-saving drugs for patients.

Once again, Mr. Chair, honorary members, thank you for the opportunity to present and provide the briefing from Boehringer Ingelheim's perspective. We look forward to discussing this important topic, which will shape the future of health care in Canada.

Thank you.

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Alibhai.

We go now to the Canadian Life and Health Insurance Association. We have Mr. Frank, president and chief executive officer.

Please go ahead for 10 minutes.

[Stephen Frank, President and Chief Executive Officer, Canadian Life and Health Insurance Association]

Thank you, Mr. Chair and members of the committee, for giving us the opportunity to speak with you today.

Thank you for inviting me to talk to you today as part of your study on Patented Medicine Prices Review Board's guidelines.

The Canadian Life and Health Insurance Association is a voluntary association with member companies which account for 99% of Canada's life and health insurance business. These insurers provide 29 million Canadians with products that contribute to their financial security, including supplementary health insurance.

Our members strongly support the amendments that have been proposed to the Patented Medicine Prices Review Board and that are coming into effect on January 1. Our member companies, which include non-profit regional health insurers, provide prescription drug and other health benefit plans to over 142,000 businesses, large and small, across Canada. Over 26 million Canadians depend on these workplace insurance plans for such benefits as prescription medication, dental care, eye care, physiotherapy and mental health supports.

With so many Canadians struggling and worrying about their family's health and security, now more than ever Canadians want to know what they can count on. Canadians with workplace plans want to know they can count on those plans to be there when they need them. We know that 87% of Canadians value their existing coverage. Moreover, we know that while all Canadians support smart reforms to improve the current system, they do not want it to disrupt their existing coverage.

For the past nine months, as the COVID-19 pandemic has unfolded, insurers have been working with employers to ensure that Canadians can continue to rely on their workplace plans. To help them through this difficult time, employers have received direct assistance of several hundred million dollars, including discounts and premium reporting.

Like the health care system in general, private insurance plans were put to the test by the COVID-19 pandemic. I'm pleased to say that workplace plans have passed the test. The health crisis has shown that these plans are resilient.

More than 98% of the 26 million Canadians who had coverage through their health benefit plans in March continue to be covered. Canadian employers and their employees continue to rely on these plans for a wide range of supplementary health benefits, as I mentioned above. However, we cannot take this for granted.

Rising drug costs have been and will continue to be a strain on the sustainability of drug programs, both public and private, going forward. High and rising drug costs are a challenge that must be addressed. Currently, Canadians pay some of the highest prices in the world for patented medicines. These costs put pressure on both employer-sponsored and government plans. That's why the amendments to the Patented Medicine Prices Review Board are so important.

Over time, these changes will bring Canadian prices more in line with those in other prosperous countries around the world. This will lead to savings for Canadian provinces and employers, savings that will not only make programs more viable, but will also give them the ability to cover new drugs on the market, which are often very expensive.

It's not just about helping public and private insurance plans. The reforms will translate directly into savings for those who pay out of pocket.

Ultimately, we believe these amendments strike the right balance between reducing the high cost of prescription drugs in Canada, while also ensuring Canadians have access to affordable and necessary medications. As I mentioned, our life and health insurers are proud of the steps we've taken to keep workplace plans in place and provide benefits for 26 million Canadians. Ensuring we pay a fair price relative to other developed countries is important if we're to sustain coverage for Canadians into the future and make fiscal room to cover the newer, expensive medications that are in development.

After consultations that have spanned several years, the PMPRB put forward their final guidelines earlier this fall. Canada's life and health insurers are strongly supportive and urge members of this committee to support their implementation as planned on January 1. These are concrete and immediate measures that will lower patented drug costs for all Canadians and contribute to the future sustainability of prescription drug plans.

Thank you for your time. I look forward to your questions and the opportunity to provide additional detail to help your study if you have any questions for me later.

Thank you, Mr. Chair.

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Frank.

We will go now to the Independent Voices for Safe and Effective Drugs.

Ms. Fuller, you have 10 minutes, please.

[Colleen Fuller, Representative, Independent Voices for Safe and Effective Drugs]

Thank you, and many thanks to the standing committee for inviting our organization to appear before you today.

I'm joining you from western Canada, the beautiful unceded territories of the Musqueam, Tsleil-Waututh and Squamish nations.

Our group focuses on overall pharmaceutical policy, but many of us also have expertise in specific areas, including drugs to treat cancer, Alzheimer’s and other conditions. My expertise is in the area of drugs to treat diabetes, with a focus on insulin.

The first time I appeared before the standing committee was in 2003. I was part of a national campaign, organized by a group called the Canadian Society for Diabetic Rights, to fight for ongoing access to animal-sourced insulin products. I appeared during the two days of hearings that the committee conducted to study the issue.

Insulin is sometimes called the “poster child” for pharmaceutical supply issues. Between 1995 and 2006, 26 different types of insulin were withdrawn from the market by Eli Lilly and Novo Nordisk, a move that left almost 45,000 people scrambling to find appropriate alternatives. That move had nothing to do with the safety and efficacy of the insulin products, all of which had been standard treatment since the 1950s and earlier.

The withdrawals were part of a marketing strategy to force people to switch to much higher-cost brands. At the time, and because of the work of this committee, Health Canada acknowledged that there was a significant minority of people whose lives and safety depended on ongoing access to animal insulin, and at the urging of the committee the ministry worked, and in fact, continues to work to this day, to ensure access.

What that experience taught me is that there are two key barriers that patients confront when trying to access medicines. One is supply, and the other is affordability.

It’s the job of the price review board to ensure that the introductory price of new drugs is fair. Our organization supports the PMPRB as an important regulatory tool, and we've spent the previous year and more arguing for stronger guidelines. We were pleased earlier this year to see that the guidelines developed by the board took a positive step in that direction. While there is always room for improvement, we hope the committee will support the price review board and, in fact, recommend that its role be strengthened even more.

The decisions of the price review board have a ripple effect across the country and they contribute either to fairness or to inequality in access. As the story of Lantus insulin shows, which was part of the brief we submitted, a decision that results in unreasonable prices for drugs shifts a significant burden to consumers, as well as to public and private insurers.

In the case of insulin, the overwhelming evidence showed that recombinant human insulins, which were introduced beginning in 1983, provided no additional benefit or significant reduction in harm compared to animal insulins, yet prices skyrocketed, including after the founding of the Patented Medicine Prices Review Board in 1987.

As Eli Lilly informed this committee in 2003, the introductory price of its beef-pork insulin was $4.87 for a 10-millilitre vial in 1980. Then, in 1983, the company introduced its recombinant DNA insulin, known as Humulin, at an introductory price of $12.50 for a 10-millilitre vial. That was a threefold increase in the price, yet according to the Cochrane Collaboration, which reviewed all the evidence, Humulin offered no therapeutic advantage over its animal-sourced counterparts.

Then, in 1995, the first analog was introduced at a price of $30, another insulin product that was shown not to offer any therapeutic advantage over recombinant human insulin, and by extension, animal insulin.

Since 1987, the price review board has approved the introductory prices of new insulins, and I would argue, has allowed the price of insulin to increase despite the evidence before it that patients not only don’t experience a significant increased benefit in terms of safety and efficacy, but also pay a price that is entirely unjustified. This is precisely why the tools available to the price review board have to be strengthened.

The ones affected the most by a weak price-review mechanism are those who are usually the least able to carry that burden, meaning people who are uninsured or under-insured, poor and in poor health. Of course, during this period when the COVID pandemic has been sweeping across the world, those numbers have increased.

A recent survey of people with disabilities and chronic conditions found that the average number of prescriptions for this group is five and the cost burden is between $200 and $3,000 per month. These are some of the people who need access to safe, effective and affordable medicines, and it is in their interest that the board should act when making decisions about what is fair and reasonable.

Governments often say that after marketing authorization has been granted, they have no control over supply. I don’t buy that, and I’m not alone. We believe governments have tools and that if they don’t have those tools, they can develop them. This is especially urgent now, in part because global pharmaceutical companies are threatening to stop supplying Canadians with new medicines if the guidelines go into effect. That is totally unethical.

In response, we urge the standing committee to recommend that the House of Commons implement legislation to strengthen its compulsory licensing capacity and to establish a public manufacturer of drugs and vaccines. If Canada utilized its ability to issue compulsory licences, it would mean that Canadians would no longer be vulnerable in situations in which patent holders are unable or unwilling to supply medicines. The Government of Canada could also work with other interested countries that want the intellectual property rules in the WTO TRIPS agreement to be relaxed. For example, other countries such as the Netherlands may be interested in developing policies that meet population needs while upholding obligations undertaken in the WTO.

Compulsory licensing—or even the possibility of compulsory licensing—would shift some of the power over price from the patent holder to government, while at the same time protecting the patent holder's right to make a profit. This would strengthen negotiations with manufacturers over bulk purchasing of essential medicines and strengthen the role of the prices review board.

Finally, Canada has a long history of publicly producing and supplying drugs and vaccines at cost to Canadians, including public and private drug plans, as well as consumers. Connaught Labs, where insulin was discovered and which became a major vaccine producer internationally, played a key role in the establishment of provincial drug plans, providing medicines and vaccines at cost. We continue to pay a very high price for the decision in 1984 to privatize Connaught, but if we can decide to privatize a Crown corporation, we can also decide to create one. We urge the committee to include this in its recommendations to the House of Commons.

The Patented Medicine Prices Review Board is an essential player in efforts to maintain some control over prices in Canada, especially since patents on medicines are granted for longer and longer periods. The new regulations and guidelines are a positive step in providing Canadians with more effective tools, but they aren't enough. The prices review board needs the backing of Parliament and the Government of Canada to ensure it plays a role in supporting access to medicines.

Canadians need to trust that the federal government is using all the tools at its disposable to support access to safe, effective and affordable medicines, and if those tools aren’t there, that Ottawa will develop and implement them.

Thanks again for allowing me to present our views and recommendations, and I hope that we've made a contribution to your discussions. I am happy to answer any questions you might have.

Thank you.

[The Chair, Liberal, Ron McKinnon]

Thank you to all the witnesses for your statements.

We will start our first round of questions at this point.

Monsieur d'Entremont, I believe you are up for six minutes, please.

[Chris d'Entremont, Conservative, West Nova, NS]

Thank you very much, Mr. Chair.

Welcome to everybody who is here today. If I forget towards the end, I want to wish everybody a merry Christmas and, of course, happy holidays as we move into them.

I want to get to an issue. We keep talking about Canada's having the highest drug prices in the world or close to the higher level of drug costs in the world. Since we have a drug company with us here today, Madame Beauchemin or Monsieur Alibhai, how does the pricing of drugs really work in a world context?

We talk about list prices, and we talk about rebated prices. How do we really rate compared with other countries in the world?

[Annie Beauchemin]

Yes, I'll take that question. Thank you for asking.

The public prices of drugs in Canada are in line with countries that have similar GDPs and health care structures.

Further to this, it's important to understand that there are significant rebates that are provided to provincial and federal drug plans currently. These are negotiated discounts that represent the drug plan's willingness to pay for the increased health benefits provided to patients upon assessment of the medication's value.

The cost of drugs in Canada is a small proportion of the total health expenditures. They have been quite stable over the last decade in Canada, with all factors considered.

[Chris d'Entremont, Conservative, West Nova, NS]

Since you're at the mike right now, when you were talking about 70 clinical trials being held, are those just the ones in Canada or are those clinical trials globally?

[Annie Beauchemin]

Those are in Canada.

[Chris d'Entremont, Conservative, West Nova, NS]

How many of those are nearing completion or are maybe on the list of those we're going to have to relook at because of the changes to PMPRB?

[Annie Beauchemin]

You're asking about the impact we expect PMPRB to have on us.

The first thing to understand is that we see a great deal of lack of clarity and uncertainty with the PMPRB process so far. We've conducted an assessment of the impact on our existing and upcoming products. We've actually had to restructure and reduce our workforce.

We can't share all the details for competitive reasons, but we've also had to reassess our current products and future launches. We expect to make very difficult decisions on whether we launch or not. Because of PMPRB, currently Canada is not viewed by global organizations as a very attractive market to invest in. We could see this get much worse if PMPRB moves forward with the new guidelines as they stand now.

[Chris d'Entremont, Conservative, West Nova, NS]

My next question will go to Mr. Adams.

You talk a lot about different programs that might not come forward. Can you give us an example within your group of partners of how many studies, research projects or drugs might not be available within your groups?

I think I just lost him. I'm looking to the clerk. I think we lost Mr. Adams.

[The Clerk of the Committee, Mr. Jean-François Pagé]

He's not connected. We'll try to reach him.

[Chris d'Entremont, Conservative, West Nova, NS]

Okay.

I know I don't have a whole lot of time. I'll move on to Mr. Frank before we get back to Mr. Adams.

Your organization is looking at these reforms as being very positive. It will save money for your members. How much of that money would go back into the hands of plan members or the like? Will it bring down premiums, or will it just keep the companies alive? I was trying to understand what you were saying in your presentation.