Thank you, Mr. Chair.
I would like to thank members of the Standing Committee on Health for the opportunity to testify today as an individual on the regulatory changes contemplated by the Patent Medicine Prices Review Board, the PMPRB.
Earlier this afternoon, I showed that spending on prescription drugs was not out of control in Canada, despite frequent statements to the contrary. In fact, spending on prescription medicines represents a steadily declining share of Canada's economy and health budget.
I also noted that there is a risk that the tightening of price controls that the PMPRB is considering may force down the number of new drugs launched in Canada or delay their launch, in addition to discouraging pharmaceutical R&D investment.
Now I intend to address the issue of drug prices and value.
In the past two years, the public debate on the regulatory changes the PMPRB is contemplating has largely focused on the launch price of new medicines.
According to one idea that is making the rounds, Canadians pay more for their drugs than citizens of other countries. For example, the most recent annual report published by the PMPRB contains a comparative analysis showing that the average price of all patented drugs in Canada in 2017 was 19% higher than the average of the OECD countries. However, that excludes manufacturer discounts. The PMPRB's data on medicines for treating rare diseases show that current prices in Canada in 2019 were 3% higher than median prices in all OECD countries.
However, you must take care in comparing prices of Canadian pharmaceutical products with those in effect in countries with much lower standards of living, such as Greece, Chile and Turkey, to name only a few. An international comparison of drug prices is a complex undertaking, since many factors must be considered, including differences in products consumed in each country, respective market shares of generic and innovative drugs, distribution costs and retail sales, exchange rate fluctuations and purchasing power of the various currencies.
In addition, information on real prices is limited in most countries. Where available, it paints a misleading picture that fails to reflect the actual prices of medicines as a result of confidential discounts that pharmaceutical companies offer payers. Those discounts or rebates are generally required by public drug insurance plans in Canada under agreements respecting registration on provincial drug plan forms. For example, the Quebec government has received a total rebate of more than $1 billion from innovative drug manufacturers over the past four years.
The situation regarding drug prices also cannot be analyzed in isolation without considering the value attached thereto.
In recent decades, major advances have been made in the treatment of many health problems through the use of innovative medicines. Those new-generation drugs have revolutionized the world and medicine by responding more effectively to patient needs than previous drugs.
In the case of rare diseases, the PMPRB itself has established that 35% of new drugs launched in Canada in 2019 resulted in modest or major improvements and that 27% represented major discoveries relative to existing therapies. The rising influx of these innovative molecules both intensifies competition and affords patients new and better therapeutic options.
For example, researchers at McGill University recently considered the long-term impact of biological treatments for Quebec patients suffering from ulcerative colitis. They showed that the risks of having to undergo a colorectal procedure considerably declined after biological drugs arrived on the market. In the year when those drugs were first used, the mortality rate among Quebec patients requiring colectomies declined by more than half from the previous year. The reduction in the number of surgical procedures and hospital stays thus helped reduce the burden of medical expenses associated with ulcerative colitis in Quebec by 25%.
Similar benefits are observed in cancer cases, which impose a substantial financial burden on patients and society as a whole. Many innovative drugs developed in recent years have completely revolutionized the treatment of cancers and improved patients' quality of life and life expectancy. Drug therapies now more accurately target the genes and proteins responsible for cancerous cell growth, thus vastly improving patients' chances of survival, while reducing the secondary effect generally associated with chemotherapy. By helping to reduce the number of hospital stays and thus work absenteeism and to minimize productivity losses, these innovative drugs thus generate major cost savings to society.
In conclusion, the situation regarding drug costs should not be analyzed in isolation from consideration of related benefits.
Once again, I would like to inform the members of the Standing Committee on Health of the negative impact on the people of Canada that could result from the stricter price controls being envisaged by the PMPRB. This kind of reform would not only reduce the number of new medicines launched in Canada, or slow their launch down, but also discourage research and development investment, which is nevertheless indispensable for the development and availability of new medicines for Canadians in the future.
Thank you for your attention.