Health Committee on June 4th, 2021

[Pamela Fralick]

I'd love to quote some data back to you from PMPRB reports, because I think there's a bit of a discrepancy between some of the sound bites that you might hear versus the data from the actual reports.

There are three comments I could make. The first point is that only three of the countries in the current basket of countries have prices below Canada's. The price difference is quite minor. The second point would be that relative prices have declined over time. I mentioned this in my opening comments. Prices in Canada have been around 20% below the median of the PMPRB7 for the past year. That's the lowest they've been in the history of the PMPRB. The last comment I would make is that the PMPRB says that U.S. prices are a global outlier and that this makes Canada's prices appear lower than they are. However, even when the prices are only compared with European countries in the PMPRB7, Canadian prices are still in line with that median, according to the last five PMPRB annual reports.

You can argue, do we still want them lower? That's another question. But in terms of what you've heard through the media and statements from PMPRB, I would just add that additional information.

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

Maybe the last question will go to Dr. McCabe, because I'm going to run out of time quickly.

We talk about value-based pricing. Would you try to expand a little bit on that? We have what the listing price is, we have what the sale price is and we have this whole negotiation that goes on in-between. What can patients actually pay, or are we still continuing to be worried about what provinces can pay or what plans can pay? There is a whole bunch of different payers. Who do we actually work with here?

[Dr. Christopher McCabe]

I think this is really important, and it's what I've focused on. The PMPRB is setting this maximum price, and it's the only location where the whole of Canada can actually have a conversation about good value for money. Once the PMPRB maximum price is set, then all of the payers, the HTAs and all of that, come into play. It's not part of this discussion, to be honest. If it helps you then not to say, “Okay, let's just talk about it: Is this is a way of establishing a price that is not excessive?”—because that's its function....

As I tried to outline, using value-based price is a nice way to operationalize that concept of “excessive”. Once you have “non-excessive” prices, then the rest of the market can work as it does currently. I hope it doesn't, because I think there are much bigger efficiencies for industry, patients and health systems by dealing with the fact that it typically takes18 months to two years from Health Canada approval to getting a reimbursed invoice. I think there are much bigger gains to be had by re-engineering that process. But Canada as a whole does need an operationally robust definition of an “excessive price”. I think that's what this is about, and if we can all focus on that, it will help us.

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

You have 40 seconds left there—maybe 30.

There you go.

[The Chair, Liberal, Ron McKinnon]

You're finished. Thank you very much.

We go now to Dr. Powlowski for six minutes.

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

My questions are for Professor McCabe.

In the previous panel, we heard from Cystic Fibrosis Canada, a group that has strongly advocated for us to drop the proposed changes to the PMPRB. Let me ask the same question I asked somebody on the previous panel. Are some drug companies, in your opinion, using patient advocacy groups to further their own financial interests? Are at least some drug companies, by refusing to apply for Health Canada approval—as Vertex was doing for some period of time—not holding sick Canadians hostage to their demands? Certainly, part of their demands is that they don't like the changes to the PMPRB. That's one question.

I'd like to pose my second question now in case your answer to the first one is overly lengthy. What can we do when companies refuse to ask for Health Canada authorization of life-saving drugs? What can we do in the example that Ms. Little gave? A drug is no longer under patent; however, the drug company is asking for really excessive prices.

I would suggest that in TRIPS, the Agreement on Trade-Related Aspects of Intellectual Property Rights, there is a realization that intellectual property rights shouldn't trump all other human values. As a result, within the TRIPS WTO agreement, there are the TRIPS flexibilities. One of the TRIPS flexibilities is compulsory licensing, which allows the government to give a licence to a non-patent holder. They do have to compensate the patent holder. In your opinion, when we're getting predatory behaviour by some drug companies that would seem to be holding Canadians hostage, should we not reconsider reinstituting legislation that would allow us to do compulsory licensing?

Thanks, Professor.

[Dr. Christopher McCabe]

I'll try to be quick.

To your first question, pharmacy companies are doing exactly what we asked them to do. We have set up society and asked them to maximize their profits. That has a lot of good things about it. They're doing what we asked them to do as a society. If we want them to do different things, we should change the legislation.

They have a coincidence of interest with patient groups, and least in certain forms. Some patient groups choose to work with them and others don't. That's their right—their right of free speech. I'm not going to judge them. I think all of us probably have people in our family who we've lost too early or in horrible circumstances. I'm not going to judge those things. I think people are exercising their rights of free speech and doing what we asked them in looking to maximize their profits. We just need to recognize that it's what we're dealing with.

The second question is about the role of compulsory licensing. I think compulsory licensing is there as a protection for when the system fails, and sometimes the system does fail and sometimes governments have to be willing to use it to create incentives for people and stakeholders in these sorts of processes to engage effectively and to find solutions.

I do believe if the system is abused and there is no willingness to move away from that abuse by the patent holder, it is within government's right to use compulsory licensing. However, whenever that happens, it's proof that the system has failed and we should be looking to find out why the system failed.

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

What would you suggest in response to Ms. Little's point about the price that the drug company is asking for the treatment of her daughter's cystinosis? The system would seem to have failed if they're asking for $100,000 and there's nothing we can do about it.

If, for example, Vertex is not bringing the drug to market, does that not suggest to you that the present system is failing?

[Dr. Christopher McCabe]

I would say that both of those are credible examples of the system failing, and the government should take seriously its responsibilities to its citizens and certainly entertain the use of it.

The U.K. government did entertain the use of its rights around a very expensive breast cancer drug, which helped to trigger a negotiation that otherwise might well not have happened. These tools are there for a reason and are used sparingly but effectively, and I wouldn't criticize anyone who used them in both of the cases you identified.

[The Chair, Liberal, Ron McKinnon]

Pardon me, doctors.

Dr. Powlowski, I'm going to stop your time.

Dr. McCabe, could you move the mike a bit farther away from your mouth? We're getting a lot of popping. It's really harmful to the interpreters to try to deal with that.

[Dr. Christopher McCabe]

I do apologize.

Is that better?

[The Chair, Liberal, Ron McKinnon]

Say a few things. Tell us about the weather.

[Dr. Christopher McCabe]

I feel like I've talked enough already. Is that better?

[The Chair, Liberal, Ron McKinnon]

To my ear, it's better. I'll look to the clerk to see if it's good.

It's a little comme ci, comme ça.

[Dr. Christopher McCabe]

I'm sorry to be such a troublesome witness.

[The Chair, Liberal, Ron McKinnon]

Well, it's not you; it's your mike. Let's forge ahead as we are.

Dr. Powlowski, you have one minute left.

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

We had a witness in the previous panel who suggested that the results of these changes to the PMPRB would be like Tesla getting $100,000 for its vehicle in the United States but in Canada only getting $50,000 for the same vehicle, so why is anyone going to want to sell in Canada?

We've also heard, I think on this panel, too, people talking about reductions in profits. These will result in a reduction in their asking price from 90% to 92%.

Professor McCabe, with those particular examples, is this legislation that draconian that it's going to cause such a loss of profits for a pharmaceutical company?

[Dr. Christopher McCabe]

It is a very strong set of regulations, and we need to remember that old saying that “Hard cases make bad law.” There will be extreme cases where the mismatch between the price that is asked and the value that is delivered is very large.

We have to ask ourselves, do we want to pay massively over value? Do we want to sacrifice a lot more of other Canadians' health to avoid these reductions in revenues?

You only get that if actually the expected value, how it impacts on patients' health, is completely out of kilter with the price that the manufacturers are asking to be paid, yet if you are out kilter on your ask, you will see a very large reduction. That's not necessarily a bad thing, because I don't think any of us want taxpayers' money to be paid for low-value technologies, which is what will be the case in that circumstance.

[The Chair, Liberal, Ron McKinnon]

Thank you, Doctor.

Mr. Thériault, you have the floor for six minutes.

[Luc Thériault, Bloc, Montcalm, QC]

Thank you, Mr. Chair.

We have a situation where people are claiming that we need to implement the reforms as they stand and that the pharmaceutical companies are indeed bluffing. They believe that the drug companies are not going to leave, that clinical trials are going to continue and that patients will face no consequences, even though we have no innovation strategy, even though we separate health from innovation and from research and development, and even though we have no really effective rare disease strategy in place. Some people feel that there will be no impact. Some people feel there are risks.

Ms. Fralick, I'd like to know what Canada represents in the global market. We can always target Vertex, but if it simply didn't start clinical trials here, we would have access to those drugs six to eight years down the road, right?

No one is going to be able to single out anyone, because it's a global free market. Am I mistaken?

[Pamela Fralick]

Thank you for the question. I will answer in English, if I may.

[Luc Thériault, Bloc, Montcalm, QC]

We are having interpretation issues. Did you switch to the English channel?

[Pamela Fralick]

I'm going to speak in English. I haven't changed my channel.

[The Chair, Liberal, Ron McKinnon]

I'll stop the clock here, Mr. Thériault.

You can put the interpretation on whatever channel you want to hear, and then you may speak in whichever language you wish. The interpreters will interpret accordingly.

[Pamela Fralick]

It's been fine until now.