Evidence of meeting #9 for Health in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was documents.
A recording is available from Parliament.
2:15 p.m.
Liberal
Marcus Powlowski Liberal Thunder Bay—Rainy River, ON
In terms of what that threshold is, in terms of a maximum cost per QALY, is there a limit? Is that $60,000? Is that what the limit is?
2:15 p.m.
Executive Director, Patented Medicine Prices Review Board
No. The November 2019 draft that we initially consulted on had a $60,000 cost-per-QALY maximum. However, following the extensive consultations that we had with our stakeholders over the course of the ensuing three or four months, we opted to raise that threshold to $200,000 per QALY.
The reality is that we have a cap on the extent of the price reduction, so the degree of cap is a function of how good the drug is, the therapeutic benefit of the drug. The maximum cap on the price reduction would be 50%. For a breakthrough drug, it would be 20%, so as a result of the cap, even new high-cost drugs that don't meet that $200,000-per-QALY threshold, which is a very generous threshold, would still be able to pass our price ceiling because the cap has the effect of increasing the cost-per-QALY threshold.
It's a lot of information that I'm throwing at you, but if you look in the guidelines, you'll see a threshold of $200,000 per QALY.
2:15 p.m.
Liberal
Marcus Powlowski Liberal Thunder Bay—Rainy River, ON
Are there many drugs out there that are likely to come before you that are going to exceed the cap?
2:15 p.m.
Executive Director, Patented Medicine Prices Review Board
Yes, probably. That's the phenomenon that Dr. Levine was talking about on Monday. We're just getting more and more of those types of drugs that are extremely high-cost. They can be north of $500,000 per QALY, $1 million per QALY, but that's the entire point of having health technology assessment: to try to ensure that we're getting value for money.
Those drugs typically don't get recommended by.... Well, they never get recommended for reimbursement by the CADTH or INESSS unless they condition it on a major price reduction, sometimes in the order of 90%, 95%, 98%, which is the case with the cystic fibrosis drugs that have come to Canada in recent years.
2:15 p.m.
Liberal
Marcus Powlowski Liberal Thunder Bay—Rainy River, ON
Now, if some of the drugs we're talking about here are obviously life-saving drugs and we're setting a limit on how much we're willing to pay in terms of a cut-off in cost per QALY, aren't we basically putting a price on life as to what price our government considers acceptable? How much are we willing to pay to save a life?
I would ask.... Maybe this is an unfair question, but from a democratic perspective, to put a value on life by regulation seems to me somewhat undemocratic, if it is done by regulation rather than by going through Parliament. Maybe that's an unfair question. I think it's a bit of a philosophical question.
2:15 p.m.
Executive Director, Patented Medicine Prices Review Board
I think it's a fair question, and maybe one that would be better directed to CADTH or INESSS, because that's precisely the type of work they do, along with HTA bodies across the world. They figure out how much we can afford to pay for a quality-adjusted life year. That's the nature of the exercise.
2:20 p.m.
Chairperson, Patented Medicine Prices Review Board
I think one of the things you also have to remember is that the more life-saving, effective or dramatic the improvement of a drug is, the lower the cost per QALY becomes. When you're seeing drugs that are at half a million or a million dollars per quality-adjusted life year, the implication is that either the price is just way off the chart or, in fact, it doesn't deliver on the outcome that one would really hope for.
Really effective drugs, life-saving, life-altering drugs, have lower cost per QALY. That's the way that ratio works.
2:20 p.m.
Executive Director, Patented Medicine Prices Review Board
The other thing to consider is that in the absence of some kind of threshold, ceiling or ultimate cap, what is the alternative? The alternative is.... I think a lot of people would say, “Well, you negotiate.” As Dr. Levine pointed out, in Canada prescription medication isn't covered by our health care system, so at best, public payers are wielding 42% of the national buying power of the country.
I think it's trite, but it's also important and it's true, that it's very difficult to negotiate with a monopolist, especially when you don't have a monopsony—even more so when the monopoly is held over a life-saving drug. The alternative to saying that we have to draw the line somewhere is to basically say we'll take whatever price the company thinks is fair and that's what we'll pay. That's not working out so well.
2:20 p.m.
Liberal
The Chair Liberal Ron McKinnon
Thank you, Dr. Powlowski.
We go now to Mr. Thériault.
You have the floor for six minutes.
2:20 p.m.
Bloc
Luc Thériault Bloc Montcalm, QC
Thank you, Mr. Chair.
When we look at the briefs that we received, it becomes clear that we're dealing with objectively different points of views and interests. I want this study to help us find common ground, to ensure a win-win situation.
I'm advocating for the patients' point of view. I'm not only talking about patients, but about patients with rare diseases, since they're the most vulnerable. I'll play devil's advocate, as I did at the last meeting and as I'll do with all the people who will appear before the committee during this study.
At the last meeting, you told us the following:
... the average annual treatment cost of the top selling patented drugs increased by approximately 1,000% and the proportion of high-cost drugs—that is, drugs costing more than $10,000 per year—rose from 5% to about 40% of overall pharmaceutical spending. Yet less than 1% of the population are using these medicines.
However, the brief submitted by the Canadian Organization for Rare Disorders states the following:
... the PMPRB continues to use alarmist language to convey the idea that Canada is paying too much for rare disease treatments and conflates drug spending categories to support its position. For instance, in the case of drugs for rare diseases, the PMPRB lumps together oncology medicines with those with true orphan indications to generate larger number to help justify the need for the reforms. In reality, in 2019, non-oncology rare disease treatments represented just 1.9% of the total Canadian medications bill.
What do you have to say about this?
2:20 p.m.
Executive Director, Patented Medicine Prices Review Board
Since I don't have the data in front of me, it would be difficult to respond on the spot.
If you want, I can commit to analyzing the data and figures provided by the Canadian Organization for Rare Disorders. I honestly don't know whether this is true or false. I'd need to ask my colleagues to conduct the necessary analysis.
2:20 p.m.
Bloc
Luc Thériault Bloc Montcalm, QC
You don't know that the total cost of orphan drugs is around $228 million?
2:20 p.m.
Executive Director, Patented Medicine Prices Review Board
I don't know whether that's true or false.
I know that very high-cost drugs currently account for 40% of total pharmaceutical spending in Canada.
2:25 p.m.
Bloc
Luc Thériault Bloc Montcalm, QC
I imagine that this organization can prove its case. They claim that you're lumping these drugs together to boost your statistics. If not, why else would you do so?
2:25 p.m.
Executive Director, Patented Medicine Prices Review Board
I don't agree with this claim. It isn't to boost the figures. That's the truth.
2:25 p.m.
Bloc
Luc Thériault Bloc Montcalm, QC
What's the exact proportion associated with rare diseases? That's the question here.
2:25 p.m.
Executive Director, Patented Medicine Prices Review Board
I'll need to give you the answer later, Mr. Thériault. I don't know. I don't have the figures in front of me.
2:25 p.m.
Executive Director, Patented Medicine Prices Review Board
Mitch, did you want to add something?
2:25 p.m.
Chairperson, Patented Medicine Prices Review Board
Yes. I would like to offer a comment here, because I think we're mixing up two things a little bit. One is that we have high-cost drugs and they're not just orphan drugs. Orphan drugs are often high-cost drugs, but that's not particularly the case. Much of what we were worried about in terms of high-cost drugs, drugs costing more than $10,000 per year, are in fact for common diseases now. These are things like rheumatoid arthritis and rheumatological diseases. Cancer is a common problem. The therapies are very, very expensive.
So I wouldn't say this whole focus is about trying to manage the cost of rare disease as much as it is about trying to manage the cost of very expensive therapies.
2:25 p.m.
Bloc
Luc Thériault Bloc Montcalm, QC
Mr. Clark, I'd like a written answer. I can also respond to the written answer that you sent today.
At our last meeting, I asked for your views on several proposals. One of them was the idea of a more gradual implementation of the PMPRB's new guidelines. The first step would be to implement the new basket of comparator countries. The pharmacoeconomic factors should then be applied after a more extensive consultation. In addition, a multi-stakeholder evaluation and monitoring committee should be created to make the process more objective.
You responded that several of the measures that I referred to would be part of your plan for the future. A number of these suggestions don't pose any issues.
I'd now like you to be a little more specific about which of these measures might apply and, if so, whether they would apply as of the January 1 deadline.
2:25 p.m.
Executive Director, Patented Medicine Prices Review Board
I believe that all the measures that you just described will be part of our plan, once the new regime comes into effect in January 2021.
We'll proceed in stages, starting with the implementation of the new price ceilings, which are the result of the new comparator countries.
We'll be able to conduct audits only much later, probably in two or three years. It will depend on the Federal Court of Appeal's decision. The Federal Court of Appeal must determine whether we can obtain the information that we need to check whether patent holders are complying with the new confidential price ceilings.
Right now, that's exactly what we're doing. We're moving forward, one step at a time. First, the new country-specific price ceilings will begin to apply in January 2022. At this time, the confidential price ceiling, or the maximum rebated price, isn't being applied.
In the meantime, we'll mainly be consulting with the patent companies. However, we'll also be working on this issue with other stakeholders, as we move forward.
2:25 p.m.
Bloc
Luc Thériault Bloc Montcalm, QC
What about the multi-stakeholder evaluation and monitoring committee? Some briefs expressed concern about the fact that—
2:25 p.m.
Liberal
2:25 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Thank you.
Mr. Clark, in the PMPRB's most recent annual report, you noted the following:
...the ratio of R&D expenditures to sales revenues for pharmaceutical patentees in Canada has been falling since the late 1990's, and has been under the agreed-upon target of 10% since 2003. In 2018, it was at 4.0% for all patentees and 4.3% for members of Innovative Medicines Canada.
In your view, Mr. Clark, will the PMPRB regulatory changes being proposed result in lower research and development investment in Canada?