Health Committee on May 23rd, 2024

[Mike Bleskie]

I think that a coordinated national approach is really important, because we're starting to see that the international research consensus shows that CGM usage is tied very successfully to better health outcomes. I think the research in Canada shows the same thing.

When it comes to the federal government coming in and being a partner in supplying CGM technology to Canadians, I think it's a very strong step forward, especially given not only its effectiveness for type 1 diabetes, but also in monitoring blood glucose levels in type 2. In fact, there are companies that are coming out with new CGM technologies that are specifically designed for type 2 diabetes, for pre-diabetes, and those with pregnancy, who are monitoring their blood glucose levels.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Bleskie.

Next we have Dr. Ellis, please, for five minutes.

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Thanks very much, Chair, and again, thank you to the witnesses for being here.

Mr. Keon, I think we've heard some testimony that perhaps you could clarify, or a question from Mr. Staples that medication costs might differ across the country.

Could you tell us if that's true, and are there some jurisdictions that have better prices than others in Canada?

[Jim Keon]

Thank you for the question.

I should clarify. I'm here today representing the off-patent industry—the generic and biosimilar industry. We fill 75% of prescriptions for about 20% of the costs, so 80% of the costs don't go through the companies that we represent here today.

However, as I have said twice already, we have a national system on pricing. Quebec participated in the latest round of negotiations for the first time. It is a national system. All provinces pay the same price. All payers in Canada pay the same price for generic medicines. When I say that we don't like bulk buying, I think we already have a national system that's negotiated with experts who run drug programs, leading to low prices, and that's what we want.

We are concerned with terms like “bulk buying” if it implies that there's going to be some attempt to drive pricing down lower. Countries like New Zealand are bulk buying. When we look at the data, we see that fewer drugs are available there than elsewhere, so that's not a system that we recommend. We have worked very hard with the pCPA, with the provinces, and the three federal drug plans to get a system, and we think that system should be respected.

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Thank you very much for that.

Through you, Chair, to the Parliamentary Budget Officer, one of the things that does concern me is the loss of coverage on behalf of all Canadians. If you do some napkin-based math, perhaps this program was based on a million people. If 40 million people are going to have to enter into this program, I can do the math in my head, but I would like to perhaps hear you say it out loud, with your credibility as the PBO. What would be the cost for simply these two classes of medications on the basis of 40 million Canadians?

[Yves Giroux]

That, unfortunately, I don't know off the top of my head.

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Would it not be three times the amount? Is that not the math?

[Yves Giroux]

I'm sorry. Lisa tells me that we have the numbers, so I'll probably let her speak.

[Lisa Barkova]

If you look at the table that we provide in our costing note, you see in the very first line that the cost will amount to approximately $5.7 billion, which would give you an estimation for how much that would cost for these same drugs if the program covered everyone in Canada. Then you can see the cost recovery due to public plans or the private drug coverage. Yes, the cost recovery is pretty much what currently the public and private plans cover.

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Very good. Again, I don't have that table in front of me.

That being said, are you suggesting that public plans would continue to cover these medications, because they're funded by provinces in that estimate, or are you suggesting that this is for all Canadians?

[Yves Giroux]

The numbers that Lisa mentioned are the expenditures that are currently being covered by public, private and out-of-pocket expenditures. For the drugs under Bill C-64— contraceptives and diabetes—it's about $5.7 billion. Assuming that all these expenditures would be covered by the federal government, that's how much it would cost.

Then we don't make any assumptions as to whether provinces would continue. We assume they would continue, because there's no sign that they will withdraw, but if they were to withdraw their coverage, then the federal price would go up, obviously.

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Right. Great. Thanks for that.

When we begin to look at this, we see that it's a small fraction of the medications out there. That's not to say that the medications for diabetes and contraception are not important; certainly they are. As a former family doctor, I wrote lots of prescriptions for both of those medications.

I know you don't have a crystal ball, Monsieur Giroux, but when we look at the costs of other medications that are currently coming down the pipeline, they're significantly more. They're thousands or hundreds of thousands of dollars.

What might that look like? To me, it's a catastrophic number. It's $5.7 billion multiplied by hundreds of thousands. Is that a fair estimate?

[Yves Giroux]

Everybody needs these expensive drugs, unfortunately, but it's true that while generic drugs tend to be a relatively small portion of all prescriptions, they are a much higher portion of total expenditures.

You're right that when new drugs come onto the market, they tend to be much more expensive than generic drugs, as I'm sure Mr. Keon will attest to, so there's a potential for new drugs to push expenditures on drugs upwards.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Giroux and Dr. Ellis.

Next is Dr. Powlowski, please, for five minutes.

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

Mr. Frank, there are private and public drug plans. If you look at private plans like Blue Cross, Canada Life and Manulife, they're all for-profit and run by for-profit companies.

Is that right? Are any of them not-for-profit in the private sector?

[Stephen Frank]

Thank you for that question. That's a common misunderstanding.

In fact, the majority of the companies operating in this space are not-for-profits. Medavie is a not-for-profit company, as are GreenShield, the Blue Crosses and Beneva.

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

Which ones are not-for-profits?

[Stephen Frank]

Those are all of the Blue Crosses across the country. Beneva, which is a large player in Quebec, and GreenShield are all not-for-profits.

If you look at the number of carriers in the country, you see that probably over half are actually not-for-profits, and they reinvest everything they make back into their communities.

There are certainly large players that are for-profit as well. It's a mix.

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

Do you know the percentage of employer plans that are not-for-profits and the percentage that are for-profits?

[Stephen Frank]

I don't have that number in front of me. I apologize.

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

Why would an employer not get a not-for-profit insurer right away?

[Stephen Frank]

The for-profit companies provide a very compelling solution to clients, and so do the not-for-profits. It's a very competitive market. There are over 20 insurers that compete for business, and employers will make decisions based on what's best for them.

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

Do you think for-profit insurers can provide the same sort of plan at the same cost as a not-for-profit one? Are they that competitive?

I would have thought the concern with any private insurer in a private, for-profit company is that a percentage of what would otherwise be its employees' benefits and income instead goes to the profit of the corporation. Therefore, unless they can be so efficient that they can actually provide the service cheaper than a not-for-profit, why would anyone have a for-profit insurer?

[Stephen Frank]

You know, that's a case-by-case thing. You'd have to look at the situation of each employer and what they're looking for in their benefits plan, but it is a very competitive space. The majority are not-for-profits, as I mentioned, and I think you can infer that the profit being made in this space is quite low, even for the for-profit companies.

It's very important. We offer incredible value to Canadians. We're very proud of that, and as an industry, we compete really hard to make sure that we're doing the best we can for them and ensure that they have the ability to access what they're entitled to.

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

Can I assume that for-profit companies would argue they provide broader and better coverage than the not-for-profit ones?