International Trade Committee on May 31st, 2016

[Dr. Carolyn Pullen]

I don't remember specifically.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Maybe you could get that, too. I appreciate your concerns about pharmaceuticals, but I think we should also put as much focus on the other costs as well.

Maybe you could get that information back to us.

[Dr. Carolyn Pullen]

Yes.

I would add that the three combined account for over 60% of health care expenditures in Canada each year, but I'm afraid I can't give you the specific breakdown.

[The Chair, Liberal, Mark Eyking]

I'll pick up on that point. Panellists, if you have a point to make and you didn't get it across today, we'll welcome anything more you can present to us and we'll enter it into our report.

We'll now move back to the Liberals. Ms. Ludwig, you have the floor for five minutes.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you, Mr. Chair.

Thank you for the excellent presentations.

My first question is for Madam Pullen regarding NCLEX. You mentioned that it's an American-based exam system that doesn't fairly or adequately measure the competencies needed for the Canadian health care environment.

Regardless of whether the TPP is ratified or not, should the NCLEX as a measurement be reviewed?

[Dr. Carolyn Pullen]

Both the implementation of NCLEX in Canada and the reliability and validity of NCLEX in testing nursing competencies relevant in Canada are questionable.

What is unclear right now is whether or not the Canadian regulators will find that to be problematic enough to make a decision to revert to a Canadian entry-to-practice system. I can't say for sure whether or not that decision will be taken in the future, but our concern is that there is enough evidence that this is an avenue worth exploring and the TPP could be a barrier to reversing a decision taken across regulators in Canada to having a made-in-Canada solution.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

My second question is for you as well.

Could you please explain the social determinants of health and how they impact on the quality of life and health outcomes and how the social determinants of health may influence the use or the application of drugs?

[Dr. Carolyn Pullen]

The determinants of health are multivariate. They are related to physical health, genetics, the environment, and other social factors such as housing, income, employment, education, etc. To say that the cost of pharmaceuticals, as an example relevant to this conversation, is the only or the most important determinant of health would be giving undue weight to that particular dimension of health.

However, where we have the greatest challenge is with the TPP, and you look at all the determinants of health and pharmaceuticals as a part of that. They play a very important role in helping people maintain health, all other determinants of health being equal. To introduce additional layers of barriers to that one mechanism for maintaining health or managing chronic disease just makes a very important piece of the health of Canadians that much more challenging. I guess that's the challenge that this committee has to weigh.

I have no doubt that there are business benefits for agriculture, for the pharmaceutical industry, and for the auto industry with this trade agreement, but whether there are intended or unintended consequences that affect other sectors and more Canadians than just those involved in those sectors is really the challenge that you have to weigh. Do the benefits for the few outweigh the benefits for the many? The Canadian Nurses Association would stand strongly on the side that this agreement is balanced against the benefits for all Canadians.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

If you were presenting before the health committee, would you make recommendations in terms of policy for looking at the social determinants of health outcomes? My daughter is a fourth year nursing student, and so I've read many of the papers and edited most of them, but looking at the social determinants, how would you present to the health committee in terms of making improvements for policy, changes to policy for improvements to health that may prevent the use of drugs in the future?

[The Chair, Liberal, Mark Eyking]

You might not have noticed, but Mr. Ruckert also wants to make a few comments. Could you make it quick so then he can follow?

[Dr. Carolyn Pullen]

Actually, I'd like to process your question, so I'll let him make his comments first.

[Arne Ruckert, Senior Research Associate, Globalization and Health Research Unit, University of Ottawa, Canada Research Chairs Program]

I just want to highlight that we actually did look at some of the social determinants of health pathways that connect the TPP to population health results in Canada. We particularly looked at income and employment as two central social determinants of health. Of course, as you are well aware, most of the econometric studies have not found a significant economic impact. They have found pretty much in the realm of zero or minus 0.2% to plus 0.2% as an impact, which is of course negligible.

At the same time, though, employment impacts have been found to be negative. That's a very important aspect of the health impacts because employment is a central determinant of health. The TPP will lead to approximately 60,000 lost jobs in Canada, according to the Tufts University study, and various other studies also found negative employment impacts.

There are concerns about how actually, through these social determinants of health pathways, the population could also be undermined through the TPP.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, and that's your time, Ms. Ludwig.

We're going to move to the Conservatives now. Mr. Shipley, you have five minutes.

Go ahead, sir.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair.

Thank you, witnesses.

Mr. Fleming, you mentioned the regime to set and approve the price of drugs. Actually, it likely isn't what most Canadians would think, that there's actually a regime. When you do the research and development beyond the amount to develop the product how does that...? Can you just help me with that?

Then I want to go to Mr. Keon to see how they develop it for generic drugs. Just run down that again for clarification. Do you actually establish it or is it a regime that helps to establish the price of the drugs, and what influence do you have as a manufacturer on that final decision?

[Mark Fleming]

Thank you.

Medicine pricing is a global decision by our organizations. We bring innovative medicines to 160 countries around the world, so we need to consider global issues when it comes to medicine pricing.

Here in Canada the pricing of medicines is significantly controlled, and has been since the early 1990s. The Patented Medicine Prices Review Board here in Ottawa is a federal agency operating under legislation that uses very specific and controlled rules to set prices. They compare Canadian prices versus a basket of seven other international countries, European countries and the United States.

From that point the medicine goes to a health technology assessment agency, primarily under the common drug review. There's a different body in Quebec called INESSS. There, what they are looking at is value for money. They are determining whether the medicine will bring value to the health care system compared to what is currently available to treat illness. Finally, or almost finally, from there it moves on to a provincial process. All 10 provinces are involved. That's called the pan-Canadian Pharmaceutical Alliance where they will negotiate significant price discounts. In fact, in the past 24 months the pCPA has saved $500 million for the Canadian health care system.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Is it somewhat similar, Mr. Keon?

[Jim Keon]

No, the generic pharmaceutical companies are not subject directly to the Patented Medicine Prices Review Board. However, we have negotiated over the last number of years with the pan-Canadian Pharmaceutical Alliance, which is now a very forceful organization representing all the provinces.

Our prices are tied to the price of the equivalent brand, and they're set at a per cent of that. For example, on the top 18 selling generics, the price is capped at 18%. If you want to go on the formularies, you can't sell it for any more than that. The provinces control our prices.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

Mr. Prouse, we've continually heard that these negotiations are all done in secret, which is quite untrue. Can you tell me not only with the organizations that you represent but the commodity organizations that rely on your organization to become effective and efficient in the production of this, would you say that they were or were not involved in terms of having access to the discussions through the commodity organizations?

[Dennis Prouse]

They were all extremely involved. You're talking about groups like the Canadian Agri-Food Trade Alliance, CAFTA, the Canola Council of Canada, the Canadian Canola Growers Association, the Grain Growers of Canada, the Canadian Horticultural Council, Canada Grains Council, and no doubt I'm missing a few, but all of these groups were directly involved. Many of them were on the same trips and were probably drinking the same coffee that Jody was drinking when they were in all those same meetings.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Okay, thank you.

What we're talking about is basically health care. Many don't relate agriculture to the significance of health care and being able to take the science and the innovative part that we have in agriculture to produce actually some of the safest, if not the best and safest food in the world. If we do not get involved and ratify the TPP, does that put us behind the eight ball in terms of being effective and efficient with regard to our research to be able to give our agriculture community.... Quite honestly, folks, I think we all understand that one of the most, if not the most, significant large industries is agriculture, because it is the one that all foundations of trade agreements are built on because everybody wants safe, secure food. That's what it's about.

Dennis, I'm wondering—

[The Chair, Liberal, Mark Eyking]

Mr. Shipley, your time is up.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I know, but can we get an answer?

[The Chair, Liberal, Mark Eyking]

You're going to have to wait. It's not like the agriculture committee. We run a tight ship.

[Some hon. members]

Oh, oh!