I'm not particularly clear on what you mean by models based on fixed costs. Actually, some of the other witnesses have mentioned....
I think everybody is opposed to excessive pricing of medicines, pricing that can't be defended on the basis of value for money in the health care system. For instance, pouring millions of dollars into treatment for a particular patient or a few patients is money that is not being used to meet other health care needs, including the other needs of the patients with the same disease.
Also, we know that we don't want to be providing excessive returns to investment in pharmaceuticals if there are other investments and innovations in health care that might deliver as much or more of a return to the health system.
There's a desire to stop excessive pricing, and there's also a desire to make sure that pricing reflects something approximating the value to health systems. We've heard, even today, that the best strategies are to set upper limits on what prices could reasonably be in a system that tries to reflect return on investment to R and D and value for money in health systems. Then, frankly, you need to let the buyers and sellers of medicines negotiate prices.
This is something that Canada lacks a strong capacity for, because we have a fragmented and uncoordinated system of private insurance in this country that lacks both the technical skills and moral authority to make value-for-money decisions in a health care system that is otherwise publicly financed.
Canada needs public agencies to do the negotiations of the final prices, those confidential net-of-rebate prices that make sense in terms of value for money. Increasingly, that also means engaging in risk-sharing agreements with manufacturers that address the real and significant uncertainty about whether products work as well in the real world as they are promised, based on often very small clinical trials.
Canada has the opportunity to build back capacity in the Canadian drug agency, which is currently in the process of being established at the federal level, and in partnership with the provinces and other national agencies and provincial agencies, concerning health technology and price negotiation.