Health Committee on June 4th, 2021

[The Chair, Liberal, Ron McKinnon]

I call this meeting to order.

Welcome, everyone, to meeting number 41 of the House of Commons Standing Committee on Health. The committee is meeting today to study the Patented Medicine Prices Review Board's guidelines.

I would like to welcome the witnesses: as an individual, Dr. Steven Morgan, professor, School of Population and Public Health from the University of British Columbia; from BIOQuébec, Ms. Anie Perrault, chief executive officer, and Monsieur Paul Lévesque, president and chief executive officer of Theratechnologies Inc.; from Breast Cancer Action Quebec, Sharon Batt, co-founder, and adjunct professor in the Department of Bioethics at Dalhousie University, and Ms. Jennifer Beeman, executive director; and from Cystic Fibrosis Canada, Kelly Grover, chief executive officer.

I will now invite the witnesses to—

[Sonia Sidhu, Liberal, Brampton South, ON]

I have a point of order, Mr. Chair.

[The Chair, Liberal, Ron McKinnon]

Ms. Sidhu, go ahead on a point of order.

[Sonia Sidhu, Liberal, Brampton South, ON]

[Technical difficulty—Editor] encourage witnesses to complete a conflict of interest disclosure form. I understand that some witnesses today may have already done so. For anyone who may not have done so yet, I would ask them to do so as soon as possible with the clerk of the committee.

This has to do with whether a witness has an economic interest or acts as an officer or a director of any outside entity whose financial interest would reasonably appear to be affected by the addition of the witness's testimony in any report that may be written by the committee on that matter. Witnesses should also disclose any personal, business or volunteer affiliation that may give rise to a real or apparent conflict of interest.

Thank you, Mr. Chair.

[The Chair, Liberal, Ron McKinnon]

Thank you, Ms. Sidhu.

We will carry on with statements by our witnesses.

Before we start, I will mention that I have cards. I will display a yellow card when we're near the end of your time slot. I will display a red card when your time is effectively up. If you see the red card, you don't have to stop instantly, but do try to wrap up. Thank you very much.

We'll start with you, Dr. Morgan. Please go ahead for six minutes.

[Dr. Steven Morgan, Professor, School of Population and Public Health, University of British Columbia, As an Individual]

Thank you very much. I appreciate the opportunity to speak to you today.

By way of introduction, I am an economist by training, and I am a full professor of health policy at the University of British Columbia. I think it's important to note, for instance, that I've published over 150 peer-reviewed research papers on pharmaceutical policy. I've won literally millions of dollars in peer-reviewed research grants in Canada and the United States. I have served as an expert on expert advisory committees concerning matters related to pharmaceutical pricing and access for the World Health Organization and the OECD.

I'll keep my opening remarks very brief, as I prefer to use the available time to help fill knowledge gaps that you might have identified as important to your work.

I will start by expressing my support for reforms to our patented medicine price regulations. The old regulations were never designed to provide significant protection against high prices in Canada. They were designed on the false premise that, if Canada paid about the same amount for pharmaceuticals as countries with high levels of pharmaceutical R and D, then Canada would also become a country with high levels of pharmaceutical R and D.

That was never going to happen, and, sure enough, it didn’t. As I wrote during the 10-year review of the PMPRB in 1997, there was much to fix in the regulations from their outset, but the need for regulatory reforms has become even greater in recent years.

Two trends are important here. First, the pricing of pharmaceuticals has become entirely secretive worldwide. Drugs are priced like cars at a dealership. There is the list price, which everyone knows is higher than anyone should really pay, and then there is the actual price, negotiated in secrecy between the seller and each individual buyer.

Paradoxically, it was the widespread use of international reference pricing regulations that was the main reason that secrecy has now become the norm in pharmaceutical pricing. That is, so many countries were using international comparisons of list prices to determine the maximum prices that should be charged within their countries that manufacturers decided to go with confidential prices and confidential price negotiations as a means by which they could charge the most they possibly could in every market. In order to do that, they had to inflate, that is, to raise, list prices in every market. The benchmarking of list prices to international comparisons is now the norm, and, frankly, it is no longer enough.

This brings up the second reason for regulatory modernization. That is the excessive prices that are now frequently asked for for many medicines, especially for medicines that are specialized drugs for treating serious conditions. Excessive patented drug prices are indeed possible, because patents give manufacturers temporary monopolies over the sale of particular medicines.

The potential for abuse of the resulting market power is high, because consumers of patented medicines, also known as “patients with medical needs”, can suffer and might even die if they are unable to afford a treatment. By legally limiting the net-of-confidential-rebate prices that a manufacturer can even ask the Canadian health care system to pay, new patented drug price regulations could prevent the worst cases of excessive pricing and, at the same time, speed up negotiations over final prices and the terms of coverage for Canadians. Patients would get the medicines they need more quickly, and our health care system, ideally a system with universal pharmacare incorporated within it, would likely be able to afford to cover more of those medicines.

Industry will oppose these reforms, and they will provide funding to patient groups willing to oppose the reforms, too, but that doesn’t mean the regulations are wrong. If anything, it means that, unlike the original 1987 versions of the PMPRB regulations, the proposed reforms might actually work.

Thank you. I look forward to any questions you have.

[The Chair, Liberal, Ron McKinnon]

Thank you, Professor.

We go now to BIOQuébec.

Ms. Perrault, I presume it is, go ahead for six minutes, please.

[Anie Perrault, Chief Executive Officer, BIOQuébec]

Thank you, Mr. Chair.

Ladies and gentlemen of the committee, thank you for welcoming us and allowing us to participate in this important and strategic discussion.

My name is Anie Perrault, and I am the chief executive officer of BIOQuébec.

BIOQuébec is an industry association that represents Quebec‑based companies. They are biotechnology companies involved in research and development, contract research companies, preclinical and clinical research companies and venture capitalists. So we have a presence along the entire innovation spectrum, from research to commercialization.

I'm here because our members are concerned, even more so because of the COVID‑19 pandemic. The Patented Medicine Prices Review Board (PMPRB) was created in the 1980s with a limited oversight role. Its purpose was to prevent the abuse of an exclusive right, the patent. That is the purpose of the Board.

Regulating drug prices is the responsibility of the provinces, which are in charge of health care and, as in Quebec, a drug insurance program—

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

Chair, I have a point of order.

I was listening in French and then I tried going to the English, and the level of sound of both the speaker and the translator is the same. For those who are listening in English, I don't know how and if you can hear what's being said.

[The Chair, Liberal, Ron McKinnon]

Mr. Powlowski, thank you for your point of order.

I wonder if the clerk could just quickly check with the translation booth to make sure we're all squared away.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Mr. Chair, it was fine on mine.

Marcus, sometimes if you unplug your headset and plug it back in, it might help.

[The Chair, Liberal, Ron McKinnon]

Thank you. We will proceed.

I apologize to the witness.

Ms. Perrault, go ahead.

[Anie Perrault]

Thank you.

As long as you stop the clock for these six minutes, I'm going to be fine.

Regulating drug prices is the responsibility of the provinces, which are in charge of health care and, in Quebec, a public drug insurance program. In our opinion, there are already ways to monitor prices. These include the pan‑Canadian Pharmaceutical Alliance (pCPA) and the negotiation of listing agreements.

Innovation takes time, resources and, most importantly, good nerves. It is a combination of financial risk, business strategy and scientific knowledge. It takes place in a stable, predictable context that considers the local market and the global environment.

I would like to emphasize that the financial risks that our entrepreneurs take, particularly in the biotech sector, are much higher than in any other sector. A biotech company invests for years—on average 15, 16 or 17 years—before it knows whether the molecule it is working on will become a drug that will be approved and put on the market.

The rise of precision medicine and targeted therapies means that it costs every bit as much to develop a drug. It benefits smaller populations, which increases the risk. The PMPRB's new regulations would upset this delicate and complex balance. In our view, the new regime could well thwart major investment projects. Putting innovative drugs on the market could be jeopardized, and there could be repercussions for patients. The new regulations also mean that a company can no longer know in advance how it will recoup its investments.

Under these circumstances, who would risk a major health care innovation project in Canada?

The proposed reform is, in our view, misguided, ill‑founded and ill‑advised. We are trying to emerge from a health crisis that highlights the importance of the government supporting the life sciences sector, not stifling it as the reform does.

In our view, there is no worse time to destabilize the ecosystem. This ineffective regulation must be withdrawn, or at least suspended, and the discussion should be revisited with a clear head.

We need to think about the PMPRB's contribution. We agree with it, but it needs to be done as part of a reflection on the life sciences ecosystem, not only on the reform of drug pricing. We need a comprehensive life sciences strategy that will include aspects tied to the health of Canadians, to access to innovation, to research and to the economic development of the entire country.

Quebec has a strategy like that, but Canada does not. We must stop thinking in a vacuum, which is what the reform currently does. The pandemic has taught us one important thing, namely that the life sciences sector, the sector that is now giving us hope for a more normal life with the vaccine it has developed, is a productive sector. The government must work with the sector, not against it.

With me today is Paul Lévesque, president of Theratechnologies, a Quebec-based biotech company that has developed and marketed two drugs for HIV patients. It is currently developing other drugs for use against cancer and liver disease.

Mr. Lévesque joined Theratechnologies with 35 years of experience in the biopharmaceutical industry. He has spent half of his professional career outside of Canada, in Europe, Asia and the United States. As global president, he led the rare disease unit in New York.

We will be happy to answer your questions today, but first I would like Mr. Lévesque to explain why it is important for him, as the head of a proud Quebec company, to be here today.

Mr. Lévesque, the floor is yours.

[Paul Lévesque, President and Chief Executive Officer, Theratechnologies Inc., BIOQuébec]

Thank you, Ms. Perrault.

Good afternoon, everyone.

I am pleased to join you today through technology.

As a former CEO of a Canadian biopharma firm, it is my role today to tell you that if this reform goes forward, it will contribute to delaying and reducing the amount of innovation and innovative therapies that make it to Canada. I'm absolutely convinced of that. I sit in one of those seats, and I can assure you that this is what would happen.

How can I say that?

Imagine for a moment that you have a Tesla, which costs $100,000 apiece in the U.S., but the reform is asking us to have it at $50,000 apiece in Canada. Therefore, an entrepreneur like me, facing that situation just like the head of Tesla, would decide not to launch the Tesla in Canada anymore. That's what would happen, because of cross-border trade, because of the fact that it would put undue pressure on the two markets. That's what this reform will do, so people sitting where I sit today will actually decide not to launch.

Does this mean that we cannot reduce the price of pharmaceuticals in Canada? The answer is no, because this is just the wrong reform for doing it. If you want to have lower prices, you have to get to the negotiation table with provinces and find creative ways to reduce prices based on targeted populations, based on performance, where pharma companies can make sure that we're held accountable for the performance of our medicines.

The point is that what you have on the table now is the wrong reform to do whatever you want to do.

I just want to wrap up here and I'll be very happy to answer your questions. There are ways to bring innovative medicines at good prices in Canada, but this is the wrong way to do it. I have a lot of ideas. We have not exhausted the ideas, but we have to get out of that box and find other solutions.

Thank you very much.

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Lévesque and Ms. Perrault, from BIOQuébec.

We'll go now to Breast Cancer Action Quebec, and Ms. Sharon Batt, co-founder.

Please go ahead for six minutes, please.

[Sharon Batt, Co-Founder, Adjunct Professor, Dalhousie University, Department of Bioethics, Breast Cancer Action Quebec]

Thank you, Mr. Chairman and committee members, for inviting us to present at these hearings.

Thirty years ago, four of us started Canada's first breast cancer advocacy group because we believed in the potential of these groups to support and promote the needs of patients. Unfortunately, in the mid-1990s the government withdrew funding from patient groups, and many turned to the pharmaceutical industry for support.

For the past 20 years, I have researched these partnerships, as have many others. A large body of evidence now exists to show they compromise the potential of groups to inform drug policy. The research shows that through financial support and social relationships the industry has captured a large segment of the global patient advocacy movement. By “captured”, I mean that these patient groups express a consistent narrative that aligns with industry interests. We now have two discourses on drug prices within the patient advocacy movement. This difference is starkly evident in the organizations that have intervened about the PMPRB regulations and guidelines.

We believe the new PMPRB regulations and the proposed guidelines will be effective tools to cap the constant upward spiral of drug prices that prevents increasing numbers of patients from gaining access to needed drugs. Excessively high prices distort the allocation of health resources. They threaten the sustainability of health care systems on which all patients depend. At issue in these guidelines are the rules that determine whether many Canadians can afford to pay for their prescription drugs.

Many reports over many decades have recognized that an effective universal health care plan must cover essential drugs, and recent polls show that 86% of Canadians support a national pharmacare plan. We are alarmed by the extent of opposition to the PMPRB by pharma-funded patient groups. Their voices are completely out of proportion to those of the independent patient groups, groups that work with low-income people and other civil society groups that support a national entirely public pharmacare program.

When the PMPRB revised and weakened the first version of its guidelines, we were dismayed. Was this pullback based on evidence or on the intense lobbying by the industry and patient advocacy groups? Drug policy analysts in all countries recognize that the pharmaceutical industry is pricing new drugs at whatever the market will bear. Many of these expensive drugs do not improve patients' survival or their quality of life. Some have been recalled because of the level of harm to patients.

Patient advocacy groups have a responsibility to press for reforms that will limit these harms to patients and threats to our health system. This is hard if you're in a partnership relationship with an industry that benefits from high prices. This is why Breast Cancer Action Quebec will not accept any funding from pharmaceutical companies, nor does any of the groups or advocates with whom we collaborate.

Canada needs transparency laws that will allow the public to examine the relationships the industry has cultivated with patient groups. We do know these relationships are extensive, not only in Canada but in all high-income countries. The industry strategies used to cultivate patient advocates, including paying for dinners, media training and unrestricted educational grants, have been used for decades to cultivate physicians. They work. They may even be more effective with patients than they are with physicians, given the vulnerability of patients and their more limited resources.

The new cystic fibrosis drug Trikafta and its precursor drugs are a flashpoint for much of the anger directed to the PMPRB. From the evidence we've seen, these new CF drugs are that rare product: a breakthrough treatment. We want Canadian CF patients to have them, but simply being an effective drug doesn't justify price gouging. Drugs are supposed to work. Otis Webb Brawley, the former chief medical officer of the American Cancer Society, argues that “patient groups get money from the drug and device companies because they...[make] claims so outrageous that even special interests dare not make them”. Some of the claims that cystic fibrosis and rare disease patients are making about the PMPRB fit that description. I refer to tweets like, “@DougPMPRB You are promoting the death and suffering of Canadian citizens and the blood is on your hands.” I also refer to the emotionally charged images in the ad series, “Stop changes to the PMPRB regulations”, which was sponsored by 13 patient organizations called “Protect Our Access”.

The PMPRB didn't block Vertex from bringing Trikafta to companies sooner; that was the company's decision. Notably, patient advocacy groups in other countries have challenged Vertex directly, as they should, and not their cash-strapped public health programs.

Patient charities supported by the pharmaceutical companies often develop financial assistance programs to help patients pay for the excessively high-priced drugs. This doesn't solve the problem of patient access to high-cost drugs. It serves to maintain an unsustainable drug pricing system that is enormously profitable to pharmaceutical companies. It keeps drug prices high.

In conclusion, partnerships between pharmaceutical companies and patient organizations contribute in myriad ways to inflate drug prices and to skew patients' advocacy in favour of the industry. Canada needs a national, publicly funded drug plan and policies to support it.

Breast Cancer Action Quebec recommends that the new PMPRB guidelines go into effect on July 1, 2021.

I thank you. Jennifer and I are happy to answer any questions.

[The Chair, Liberal, Ron McKinnon]

Thank you, Ms. Batt.

We will go now to Cystic Fibrosis Canada.

Ms. Grover, please go ahead for six minutes.

[Kelly Grover, Chief Executive Officer, Cystic Fibrosis Canada]

Hello. Thank you for inviting us here today.

I am the CEO of Cystic Fibrosis Canada.

Cystic fibrosis is a fatal disease affecting over 4,300 Canadians who die far too young. We are, however, at a time of extraordinary change for this disease, as there are now drugs that can help 90% of our community live much longer, healthier lives. The next best thing to a cure is on our doorstep.

When we first put forward our submission to this committee, we wanted to discuss the opportunities and the challenges we saw with respect to the implementation of the PMPRB changes. We wanted to stress that we agreed with the goal of lowering drug prices and the changes to the comparator countries, but we had concerns about the additional pharmacoeconomic elements. While we stand behind that thinking, today I need to share the serious concerns we have about the approach and the conduct of the PMPRB.

Drug policy is important. It can have a life-or-death impact. With a drug policy change of this magnitude, it was our expectation that the PMPRB would ensure there was meaningful consultation with those most affected. However, in our experience and in the experience of many other patient groups, this was not the case. Our submissions were sent into what felt like a vortex. Ultimately, they were never reflected in the minimal revisions made by the PMPRB, nor were explanations given for their chosen direction.

Last week we learned of activity at the PMPRB that solidified our concerns about the value placed on patients. We learned through an ATIP request that the PMPRB had developed a communications strategy to discredit four groups. Three of these groups were patient groups, including the cystic fibrosis community. To quote the PMPRB strategy, “opponents of the reforms have been more vocal about the potential negative impacts of their implementation and are spreading disinformation through organized public relation campaigns.” Further, it's noted that “the CF community…have aggressive public relation strategies that are aligned with the messaging promoted by the industry.”

I want to make a specific point here. The word “disinformation” is highly inflammatory and was a deliberate vocabulary choice by PMPRB officials. We now understand that if you dare to disagree with the PMPRB, they won't simply refute your point of view. They will villainize your efforts.

As the CEO of a nationwide organization dedicated to serving people with a fatal disease who now have an opportunity to access life-changing medications, I cannot fully convey the dismay and concern I have that a federal agency deems this community to be an opponent and a threat to be discredited. To specifically target the credibility of this community—children and young adults who are fighting for their lives—is beyond what I could comprehend as reasonable or appropriate for a federal agency. These families felt that these changes stood in the way of their access to new life-saving medications, so they spoke up.

Members of Parliament who disagreed with the PMPRB's directions should also be concerned, as they, too, were characterized as spreaders of disinformation. This characterization should be very concerning to the members of this committee, as the role of elected representatives is to assess policy direction.

My final remark is with respect to another ATIP request that showed calculations conducted by the PMPRB on two cystic fibrosis drugs if the guidelines were implemented. The calculations indicated that the manufacturer would be required to reduce its price by 99%. We found this to be of keen interest. Why? It's because time and time again the PMPRB told us that our concerns were not valid and that the impact on industry was overblown. Whatever you think about the pharmaceutical industry, we believe that most of us can agree that there isn't a company in any sector that would raise its hand to come to a country that requires a 99% reduction in price.

These examples illustrate an agency that we have grave concerns about. As I noted earlier, we support the government's goal of lower drug prices. However, we believe this must be accomplished in a transparent, credible and consultative manner, where all parties are listened to and, frankly, those with the most at stake—Canadian patients—respected. This has not been the case with the PMPRB.

It is incumbent on the Standing Committee on Health to stay these guideline changes and to call on the Auditor General and the Integrity Commissioner to review the activities of the PMPRB.

Thank you.

[The Chair, Liberal, Ron McKinnon]

Thank you, Ms. Grover.

We'll start our questions with Mr. Kmiec, please, for six minutes.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

I'd like to start with Cystic Fibrosis Canada because you mention some public information that I released once I had obtained it.

My experience has been that patient advocacy groups like yours and others are usually made up of teenagers who have a particular condition, and parents who are very active in it because it's very personal to them. I have three kids with a rare disease. I have a daughter who passed away just a few years ago from a different rare disease, so it's personal to me as well.

Can you tell me whether the people involved as advocates are paid lobbyists or parents?

[Kelly Grover]

Thank you for your question.

People living with cystic fibrosis who advocate are just free agents. They are parents of kids who are sick. They are adults now who are living longer lives, which is a wonderful moment.

I just want to stress that the drug available for these people is for 90% of a fatal disease, and it adds 10 years of life. They are fighting hard. They saw barriers, so they spoke up. This is an amazing community, and I'm so pleased to lead Cystic Fibrosis Canada on their behalf.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Kelly, when the documents came out, a communications plan accused your group and other patient advocacy groups, and actually parliamentarians like me, of engaging in disinformation. Allegedly, we are deceitful and are lying, which is what the PMPRB accused us of. How does that make your organization and the people you represent feel?

[Kelly Grover]

I was talking to my team about this today. I feel sad. I feel really let down. We are a 60-year organization that was built by parents. Now our board chair is a parent of somebody living with cystic fibrosis. We are so committed to changing the course of this disease and doing the work that's needed.

There is rhetoric out there that we don't speak about Vertex the manufacturer, and that we don't do this or don't do that. I'm here today for the moms and dads living with cystic fibrosis.

We have such an opportunity to change the course of this disease, and I'm a bit saddened that it's come to this. It's really about slagging each other. I think we should all come together, figure this out and ensure that people who have a game-changing drug are able to get access in Canada. I think we all could champion that.

It makes me very sad and just frustrated, frankly. I know that's how the parents felt. They felt very slagged—if I can use that word—and really disrespected, and they're frustrated.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

In these internal documents they accused parliamentarians like me of lying. You responded on May 24 in a letter you sent to the President of the Treasury Board and to the Integrity Commissioner. You specifically cited major concerns that the PMPRB had violated the policy on communications and federal identity, section 4.1, and also the cabinet directive 6.10.2 on the management of communications, which is supposed to be done objectively in a non-partisan fashion.

Do you have any concerns about the neutrality and professionalism of the PMPRB executive?

[Kelly Grover]

That letter didn't come from us. It came from a sister organization called the Canadian Cystic Fibrosis Treatment Society.

I'm not going to speak to the leadership of the PMPRB. I think the staff probably work hard there and try to do the best they can.

What I do think is that they didn't have a sound consultation process, one that I would expect would have been more of a to and fro and not a didactic, one-way process. I think patients and people living with disease have a lot to offer. There are many things that I could say about the consultation—and I can submit them later. I think you could have had a more meaningful discussion on the changes.

As Cystic Fibrosis Canada, we've said that we do agree with the lower drug prices and with some of the guideline changes, and then we think that maybe you should wait and see, try some out, see how it goes and learn from the experience.

I think it just becomes very didactic and black and white.

I can't speak to the leadership. I'm sorry that I'm answering you in a bit of a roundabout way.