Health Committee on Nov. 23rd, 2020

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Can I ask you, then, about those legal challenges that you mentioned, since I see also that Reuters reported that Ontario and Quebec shared that they have concerns about private concerns that they expressed. Now it's in the media about how these PMPRB regulatory changes are coming through. They're worried about pricing, that their rebates will be lower. You're squeezing the balloon on one side, and on the other side, the rebates won't be there.

Because there are these challenges at the Superior Court of Québec, don't you think it would be wise, perhaps, for the federal government to delay them for another six months in light of these legal challenges?

[Douglas Clark]

Well, it's really not for me to pronounce myself on the wisdom of the timing of those regulatory amendments.

As I explained, they are the responsibility of the Minister of Health. I know that the amendments were originally slated to come into force in July 2020 but were delayed an additional six months to January 2021. I do believe there are conversations happening around town. I think this is one of the industry asks—that given the nature of the ongoing pandemic, a further six-month delay be considered.

It's not my decision to make. I don't have authority in that area, so it's not really my place to answer that question.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Clark.

Maybe I'll just return to Trikafta, because the company has now been in application. I have a lot of constituents, as I think we all do, who want to see this drug approved and offered for public reimbursement in Canada. Has PMPRB looked at it already?

You said it was a $12-million cap for revenue. To me it sounds like—

[Douglas Clark]

It's not a cap.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Is it not a cap?

[Douglas Clark]

Gosh, no. It's not a cap. It just means that if you're making $12 million or less on a particular drug, you're not subject to the new and more onerous, let's say, price ceiling. It's a mechanism to provide insulation from the application of the new regime. The new regime is not going to apply in that manner anyway for at least a couple of years, because of this Federal Court decision that I mentioned.

To answer your question specifically on Trikafta, no, we haven't looked at it in a formal way yet. We've had a number of discussions with the company. We've had open channels of communications with Cystic Fibrosis Canada throughout the past year, but until Trikafta is sold at non-zero prices in Canada—it's currently supplied under the special access program for free—or receives its notice of compliance from Health Canada, we won't look at it formally. That's how our regime functions.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

What about drug—

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Kmiec.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

[The Chair, Liberal, Ron McKinnon]

We go now to Ms. Sidhu. Ms. Sidhu, please go ahead for six minutes.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here with us.

As we know, Canada has among the highest drug cost in the world. Health Canada reports that the new PMPRB guidelines will save Canadians billions of dollars, which, of course, is a good thing for all Canadians.

My question is for Mr. Clark. How do Canadians' drug prices compare to other countries around the world? When can Canadians expect to see these changes?

[Douglas Clark]

One thing I should point out, and I did get into this a little bit in my presentation, is that when the regulatory amendments were published, they contained a cost-benefit analysis that projected about $8.9 billion in savings as a result of these changes, in net present value.

I did try to unpack the numbers a little bit for you on how we project the impact of the new regime with both the guidelines and regulations operating in tandem. It is quite a bit lower than that. It's more in the neighbourhood of $6.2 billion. That's probably an overestimate of the impact over the coming 10 years, because that looks at list prices and it doesn't take into account.... We look at list prices and we see how much they are going to come down as a result of these changes, and then we calculate how much less we are going to be spending on pharmaceuticals. However, the reality in the market is that list prices don't represent the true price in the market most of the time.

Let's say you have a drug with a list price of $100. As a result of these changes, the list price would come down 5%, to $95. If the true price in the market is $90—if the pCPA has negotiated a deal for $90—that won't have any real impact on pharmaceutical expenditures in Canada. That $6.2 billion is probably an overestimation of the impact by a considerable margin.

There is a significant gap between what we're projecting today versus what was projected in the cost-benefit analysis, the CBA, because of the impact of that Federal Court decision and our inability to apply new factors in a meaningful way.

To circle back to your original question, Dr. Levine mentioned this in his opening remarks. Canadian prices vacillate between third- and fourth-highest in the OECD, currently, for patented medicines.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you.

One group we frequently hear from in regard to the cost of medicines are advocates for those with rare diseases whose drugs carry a higher price if they are not widely used.

As you are aware, the government is also considering a rare diseases strategy. Can you make any recommendations for this strategy? Can you explain how these new guidelines will bring down these prices and help people presently living with rare diseases?

[Douglas Clark]

Oh boy, that's a complex question. I will let Dr. Levine chime in if he wants to supplement my answer.

We hear a lot from advocates for patients for rare diseases' pharmacoeconomic value. This is a very esoteric topic, but it shouldn't have application in this space because there are unique features of these products that make them not amenable to that type of analysis. When I meet with my counterparts in other countries around the world, and with health technology authorities in particular who do this type of analysis on behalf of payers and governments worldwide, they take issue with that argument.

I will give you an example of the point I'm trying to make. The U.K. sets pharmacoeconomic value thresholds. If a drug costs more than a certain amount for one quality-adjusted life year, the U.K. health authority won't reimburse it unless the price comes down. There are varying thresholds that apply to different drugs. Rare disease drugs have a higher threshold than regular drugs.

At some point, people became very concerned that a lot of the new oncology drugs, for rare diseases in particular, weren't meeting these thresholds—even the more elevated thresholds. The U.K. decided to create a special fund just for cancer drugs and forgo the pharmacoeconomic value assessment for these drugs.

I think the fund started off with $1 billion. It was quickly exhausted. Authorities soon realized that health outcomes for cancer patients hadn't improved an iota over that period. In fact, they probably suffered a lot more side effects as a result of allowing medications on the market that didn't have good clinical data and weren't able to establish significant value in terms of their cost effectiveness.

I'm wary of putting these medications in their own little bucket. I'm very sympathetic to people who are concerned about the impact of these changes on rare disease medications, but that's one of the reasons we introduced that $12-million annual revenue insulatory mechanism that I alluded to earlier.

Dr. Levine has more experience day to day as a clinician dealing with these types of medications. Do you have something you want to add?

[Dr. Mitchell Levine]

The reason we don't want to parse things out at the moment is that as things are unfolding, the future of medicine is that everything is essentially going to become a rare disease.

We used to think that we'd treat all lung cancer the same way. Now, as we go through the biomolecular basis of cancer, you could end up with hundreds of different treatments for that lung cancer, which means that we now have small groups of patients who, in a sense, meet the criteria for a rare disease. If very few people have that kind of lung cancer in Canada, there's that specific treatment.

The future of all of medicine is really going to be very individualized and a “very rare disease per person” approach. We needed a robust approach to deal with all medicines, regardless of how many people are being treated with it, and to make sure that the health care system is going to be sustainable when we move to that environment. We are rapidly moving towards that environment.

[The Chair, Liberal, Ron McKinnon]

Thank you, Ms. Sidhu.

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

[Luc Thériault, Bloc, Montcalm, QC]

Thank you, Mr. Chair.

I also want to thank the witnesses for joining us.

The industry and several patient advocacy groups recognize the importance of modernizing the existing basket of comparator countries to ensure a more standardized and accurate comparison of different categories of drugs. However, there are still concerns about patient access to treatment.

The Collective Oncology Network for Exchange, Cancer Care Innovation, Treatment Access and Education has strong concerns about patient access to innovative cancer treatments. In my view, the most significant criticism is the following: “Moreover, considering only the price without taking into account the treatment's value in terms of the health of patients and their caregivers, and the resulting economic and social benefits, constitutes a false dichotomy.”

In its submission, the network noted that, at the Canadian Agency for Drugs and Technologies in Health, or CADTH, four factors were considered: clinical benefit, cost effectiveness, patient values, and feasibility of adoption. It acknowledged the need for more flexibility and pragmatism in the evaluation.

The national institute of excellence in health and social services, or INESSS, is another organization that takes these values into account in the establishment of prices.

The network noted a shortcoming in the analytical approach to the reform. It stated the following:

This limited analysis does not take into account the overall value of these drugs to the health care system or the positive social and economic impact of having patients recover more quickly and resume their normal daily activities, including getting back to work. It also does not take into account the money saved in terms of care, long-term disability claims, drug claims and the use of the health care system. It overlooks the economic contributions made by individuals recovering from an illness when they resume their active lifestyle, their normal purchasing habits and their contributions to social programs.

Mr. Clark, what do you think about this?

[Douglas Clark]

Your question is quite substantial.

It would be an excellent idea to ask representatives of CADTH and INESSS to appear before the committee. I don't know whether this is on your agenda, but they should be answering these questions.

[Luc Thériault, Bloc, Montcalm, QC]

On that note, one criticism voiced by a number of stakeholders is that the new rules change the Patented Medicine Prices Review Board, or PMPRB, from an excessive price regulator to a price-setting regulator. I understand that your response brings us to this point. They claim that you're taking their place without having the jurisdiction to do so and without establishing parameters to help set a price that aligns better with a comprehensive vision. This is a basic criticism.

The collective network says that it would be necessary to hold further consultations; to carry out the implementation in more gradual stages, starting with the basket of existing comparator countries; to gradually introduce pharmaco-economic factors; and to create a multi-stakeholder evaluation and monitoring committee because the process must be more objective. According to the network, and this surprised me, it's important to maintain the confidentiality of the agreements, which the court seems to still be protecting.

What do you think about this? Would you be open to the idea?

[Douglas Clark]

Several of the measures that you just listed are part of our plan for the future. We agree with a number of these suggestions. The issue is that we're currently involved in two court challenges where the industry is making these types of arguments.

[Luc Thériault, Bloc, Montcalm, QC]

This isn't coming from the industry, but from the collective network, which is dedicated to protecting the rights of cancer patients.

[Douglas Clark]

I understand. However, the industry is making the arguments in the midst of these court challenges. This puts me in a bit of a delicate position to comment.

[Luc Thériault, Bloc, Montcalm, QC]

Okay.

The collective network says that 50% of the most common cancers, namely, skin, breast, lung and colorectal cancer, are involved in this.

There are six innovative drugs related to these cancers. When the network analyzed the first draft of your guidelines, it found that four of these six innovative and life-saving drugs wouldn't have been launched.

Are you aware of this?

[Douglas Clark]

I don't know which four drugs you're talking about, but—

[Luc Thériault, Bloc, Montcalm, QC]

I'm talking about pembrolizumab, atezolizumab, and trastuzumab—it's hard to pronounce and remember—