Health Committee on June 11th, 2021

[Prof. Jillian Kohler]

Thank you. That's a very good comment.

I'm going to go back. The world has changed since I wrote my op-ed.

I don't think it should be an us or them proposition. I want to stand very clearly on that. Of course, I don't want to be accused of saying that I'm trying to take vaccines away from Canadians. Of course I'm not. I don't think it's us versus them. That's my main argument. We're all in it together. That's a cliché; we're not really all in it together if you look at the inequities, but let's use that as our framework.

While we're working towards getting all Canadians vaccinated, we need to think about what we can contribute, whether it's funding, perhaps providing other medical supplies or, when we're able to, providing the doses, as you said. It just came out in The Globe and Mail. I did see that this morning, as well, which obviously makes me very happy.

I think we need to look at this differently. It's not about us versus them. It's about how we all work on this.

As the head of the WHO has repeatedly said, we're dealing with a global pandemic, so the reality is that even if you don't buy into the need to address other countries' needs, this will never be resolved unless everyone gets access to a vaccine. This is putting the need for more equity in terms of vaccines, medicines and other supplies into the spotlight.

I would say we need to make sure we don't frame it as taking away from us for them. That's not the right approach. I think it's more about how we can help as best we can and when we can.

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

My second question is also for you. You talked about our vaccine supply being erratic and uncertain. I am a Liberal, so obviously I'm going to try to defend our own position, although I don't always do that.

I would suggest, however, that we've been told by vaccine makers that orders were made on a quarterly basis by pretty well every country, and that this is the way it's done. Although we couldn't predict exactly whether we were going to get supplies in February or March, we knew that by the end of March, we were to get so much. Most of the vaccine producers have been pretty good.

The other reason for some uncertainty has been manufacturing difficulties, like when Pfizer had to decrease production in order to revamp its production facilities to increase production, which it really did.

Doesn't this account for at least part of that uncertainty, and things that are kind of beyond our control?

[Prof. Jillian Kohler]

Those are fair points and absolutely true. Vaccines are very complex to manufacture. There are always going to be delays, but this goes back to my main message regarding the lack of transparency.

What Canadians needed to know.... Again, I'm not assuming that every Canadian was going to be interested, or wanted to know, about the nuances or the details of the supply system. However, it just wasn't clearly articulated. There was fear, and there were concerns. If people had been informed that this was not going to be necessarily a smooth process—that we would have to deal with unknowns and, perhaps, with manufacturing glitches, which was what we experienced—that would have been better.

The messaging was that we're all going to get it at certain dates, which was done in order to appease people's concerns, but at the same time the full story was not provided. There wasn't enough about what the government did, or the how and why. Again, keeping Canadians better informed would have led to a lot less anxiety. Speaking just about people I know and my own personal experiences, it was really stressful to understand when and how people would get supplies.

Happily, things are better now, but as Canadians we went through a lot of uncertainty. If we had just been prepared for that, it might have been a little easier. I'm not saying fully easier, but slightly easier.

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

Thank you.

[The Chair, Liberal, Ron McKinnon]

Thank you, Dr. Powlowski.

We now go to Mr. Thériault for six minutes.

[Luc Thériault, Bloc, Montcalm, QC]

Thank you very much, Mr. Chair.

I'd like to thank all the witnesses for their testimony today.

We parliamentarians are here to find solutions and make recommendations. Your remarks are interesting and can help us in that effort.

My question is for Mr. Labrie.

Health Canada boasts on its website of the regulatory relief it has introduced to make Canada an attractive place for research and clinical trials on COVID‑19 vaccines and drugs. It seems to me that contradicts the reform and regulatory tightening the PMPRB is proposing. Many stakeholders have come and told us the contrary: that this tightening will have an impact on new drug launches and clinical trials. I wanted to know if the same regulatory relief would be available for other diseases, and it appears it won't. In addition, the coming into force of the reform, which is scheduled for July 1, will not be postponed.

Consequently, I see a contradiction here in your saying that this reform will have an impact on the life sciences ecosystem, R&D and new drug launches. The PMPRB seems to be flying blind. On the one hand, it tells us these consequences won't occur and that that's just an illusion. On the other hand, witnesses have told us in committee that, in five years, the PMPRB has conducted no studies to determine what the negative effects on the life sciences ecosystem might be.

What do you think of that omission from a methodological standpoint?

[Yanick Labrie]

Thank you for your question, Mr. Thériault.

First, you're entirely right to note the contradiction. It's obvious.

In fact, the PMPRB admits, through its actions and regulatory relief for vaccines, that its reform will indeed cause launch delays and problems. If it were consistent, it would continue this trend and do the same thing, which is to tighten price controls for vaccines as well. You're entirely right in saying that the fact it's currently loosening them is contradictory. That confirms what I'm saying.

You noted that the PMPRB hadn't even conducted an impact study to determine what consequences the regulatory reform might have on the life-sciences ecosystem. You're entirely right. I was able to lay my hands on only one simple—I'd even say simplistic—analysis. It's a correlation analysis involving a few variables and a number of countries, but no confounding factors. However, it's extremely important in science to have this type of study. Economists and other researchers in the social sciences will tell you it's very important, when you conduct this kind of study, to try to assess not only the correlation but also causal links. A study is virtually worthless without them.

Consequently, I'm not surprised there's been no impact study. The study I got my hands on isn't a very rigorous one for a public body such as the PMPRB.

[Luc Thériault, Bloc, Montcalm, QC]

Earlier you said there were 44 studies that demonstrated the opposite of the claims made by the PMPRB, which, in your own words, relies on a simplistic methodology.

I've often heard people cite, as a counterexample, Belgium, a country where there's a lot of R&D and drug prices are low.

Could you explain that counterexample to me? Do you think it's valid?

[Yanick Labrie]

Actually, the PMPRB people cited that example in public debate. It's an example of what you shouldn't do when you want to advance an argument in science. It's anecdotal. They took a suitable country that exhibits in several respects what they wanted to demonstrate, but it's a small, two-country correlation. I'm sure you'll agree the sample is very small. They also disregarded many factors. They may have omitted many factors that are responsible for the fact that there's no more investment in Belgium, for example.

They could have presented a counterexample such as Switzerland, where prices are higher and there's an extremely high level of spending, private pharmaceutical R&D investment and extremely enviable access, for the Swiss, to new medicines.

So this kind of example is of little value in practice because it's anecdotal.

[Luc Thériault, Bloc, Montcalm, QC]

You told us that the growth in spending on prescription drugs was under control in Canada. That's not really what the PMPRB is saying with [Technical difficulty]. Are you questioning its analysis and figures?

[Yanick Labrie]

Absolutely. It really surprised me. When I look at the PMPRB's annual reports, I'm always surprised that it fails to adjust for inflation, for example, in presenting chronological data on changes in drug spending. It's an amateur mistake. In fact, you can't make that kind of mistake when you present data to the general public. You also can't fail to take into account demographic changes and population growth. That's another frequently committed error. You obviously have to conduct rigorous analyses. That's extremely important.

When you carefully consider data from the Canadian Institute for Health Information, which is a parapublic, independent and unbiased body, you see, after adjusting for inflation and population growth, that there hasn't been a sharp increase in spending on prescription medicines. In fact, this is the health expenditure category that has risen the most slowly. It's [Technical difficulty]. In addition, the main reason for this growth in drug expenditure isn't higher prices but rather an increase in consumption. There's a larger quantity of prescription drugs…

[The Chair, Liberal, Ron McKinnon]

Pardon me, but time is already up. Thank you.

[Yanick Labrie]

Thank you.

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Thériault.

We'll go now to Mr. Davies.

Mr. Davies, please go ahead for six minutes.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Dr. Kohler, federal procurement minister Anita Anand has told this committee that Canada's vaccine contracts are subject to confidentiality clauses in their entirety. She even claimed that the confidentiality clauses themselves are confidential.

I just want to make sure I understand your evidence. Is it your evidence that this secretive approach to Canada's vaccine contracts does not serve the public interest?

[Prof. Jillian Kohler]

That is absolutely what I'm saying. As I said, I'm referring to research I did. Canada was a small part of a pool of countries that we looked at, including countries within the European Union, as well as Brazil, the United States, etc. The bottom line is that we should know what are in the clauses—

[The Chair, Liberal, Ron McKinnon]

Dr. Kohler, could you hold your mike up?

[Prof. Jillian Kohler]

Again, I apologize for my lack of technology skills here.

My point is that, yes, we in the public domain should have access to information contained in these reports. As I mentioned earlier, when we did our studies—I'm not just referring to Canada here, just to be clear—we found, interestingly enough, that even public agreements were redacted; they had lots of black lines on them, so that the information was limited. We need to know more.

I'll stop there.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thanks.

In a May 25 article in the Toronto Star, you were quoted as saying, “The government is not being forthcoming with how much it's paying, what it's negotiating and why.” You also said, “There is no barrier in terms of making this public. It's just a political decision to do so.”

Why do you think that's a political decision? Do you see any reason why the government couldn't take a different approach to disclosing this information to Canadians?

[Prof. Jillian Kohler]

I still stand by my quote, happily, and I would say that the government indeed can take a stand. Oftentimes, the argument is made—and I know this happens usually behind closed doors—where the industry will say they're going to give you a better deal, but they don't want others to find out about it, because if they give you a better deal, they're going to have to negotiate the same deal with country X, Y or Z for less, so it's in your best interests to keep this quiet and to keep this confidential.

I don't buy that. I don't think that's a valid reason. Just so you know, but in case you're not aware, I'm sure many of you know that the World Health Assembly in 2019 came out with a resolution demanding pricing “transparency”. It was the beginning of global efforts to demand much more transparency in terms of research and development and in terms of contract negotiations with the industry.

I do believe, still, that it's a political decision. I think that if the government were standing a little more strongly with its suppliers, it could make some of this information public.

[Don Davies, NDP, Vancouver Kingsway, BC]

Let me drill into that. In that same article, you said, “The pharmaceutical industry tends to be a secretive industry and that's because of market dynamics, concerns about their branding, et cetera. But that's an outdated model that doesn't work for building trust.”

Can you explain why that model doesn't work for building trust and perhaps how you would recommend that it be reformed?

[Prof. Jillian Kohler]

We now live in a world that has shifted. The industry is still operating like it did 25 years ago, when it concealed things. Again, though, in terms of information, we have a revolution that's been happening for a long time now. This is nothing new. The public wants to know. The public is much more invested in terms of finding out what drugs cost and how and why we determine, for example, research and development costs, which has always been very murky and can lead to some policies that are favourable to the industry without our really knowing why. I would say we need to turn the industry on its head.

The other point is that the industry is generally working with public institutions in order to do a lot of its work, so we have a vested interest as citizens who contribute to public institutions to find out what these institutions are actually doing. The old model of vertical integration, I would argue, is outdated. It might have allowed for secrecy. I'd say we need to think about who is actually contributing to the research and development and contributing to the outcomes we want. In order to do so, we need to think much more fully about getting full access to information.

[Don Davies, NDP, Vancouver Kingsway, BC]

Dr. Kohler, do you happen to know approximately what percentage of taxpayer dollars went into funding the COVID-19 vaccines? Is there a stronger case to be made for public transparency when the research that goes into producing the product is actually publicly funded?

[Prof. Jillian Kohler]

There absolutely is, and I don't know the exact numbers but we could refer to Operation Warp Speed, which, again, had huge amounts of money invested from the U.S. side. One could argue that this is just for U.S. citizens, but again, I was making the case that I think it's for the global public. I think that if we were to dig deeply—I haven't done the numbers, and I'm sure we could get to them—we would probably find mostly significant funding, even in areas that, again, we weren't aware of.

Given the existence of public engagement, involvement and resources, I would say, yes, we should be getting access to information.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'm going to squeeze in one more question.

There's clearly a disparity in prices. Obviously, the pharmaceutical companies, I will just posit, as the monopoly sellers of the product, have an interest in keeping it secret. I don't know if the customer does.

The analysis you published in Transparency International said that upper middle-income economies, such as South Africa, paid an average 25% more per dose than high-income economies like the European Union. This committee saw in a document, which fortunately was unredacted at first, that there was quite a disparity in what various jurisdictions paid for AstraZeneca. In fact, Canada actually paid among the highest prices, significantly higher than what the EU, South Africa and other countries paid, which kind of belies the argument that we would have been paying a lower price in order to keep it secret.

How do you explain this pricing disparity? Is keeping this whole thing secret just something that benefits the pharmaceutical industry as opposed to customers in the end?