Public Accounts Committee on June 9th, 2016

[The Chair, Conservative, Kevin Sorenson]

Good morning everyone. This is meeting number 19 of the Standing Committee on Public Accounts, Thursday, June 9, 2016.

Today we are conducting a hearing on “Report 4—Drug Benefits—Veterans Affairs Canada” from the spring 2016 reports of the Auditor General of Canada.

Appearing before us today from the Office of the Auditor General of Canada are Mr. Michael Ferguson, the Auditor General of Canada, and Casey Thomas, principal. From the Department of Veterans Affairs, we welcome Walter Natynczyk, deputy minister; Michel Doiron, assistant deputy minister, service delivery branch; and Cyd Courchesne, director general, health professionals, and chief medical officer.

We will have an opening statement from our Auditor General, and then a brief statement from Deputy Minister Natynczyk.

We welcome you again here today. Thank you for appearing.

[Michael Ferguson, Auditor General of Canada, Office of the Auditor General of Canada]

Mr. Chair, thank you for this opportunity to discuss our 2016 spring report on drug benefits for veterans. Joining me today is Casey Thomas, the principal responsible for the audit.

In our audit, we examined three areas. First, we examined the process that Veterans Affairs Canada used to add, remove, or limit access to drug benefits. Second, we looked at the department's cost-effectiveness strategies. And finally, we examined how the department monitored the utilization of drugs by veterans.

We found that decisions about which drugs to cover were poorly documented and not clearly based on evidence such as veterans' needs and clinical research. We also found that timelines had not been established for the implementation of decisions. In one case, a decision to limit access to a narcotic was still not implemented two years after the decision had been made.

We recommended that Veterans Affairs Canada implement a decision-making framework that specifies the type of evidence required and how the evidence should be considered. The department should use this framework in deciding which drugs to pay for and to what extent it would pay for them. We also recommended that the framework contain a requirement for the department to update the drug benefits list on a timely basis.

We found that Veterans Affairs Canada used some cost-effectiveness strategies, such as substituting generics for brand name drugs and negotiating reduced dispensing fees with pharmacies. However, the department did not assess whether these strategies achieved the expected results. The department had also not implemented strategies related to expensive new drugs entering the market.

We recommended that Veterans Affairs Canada periodically review its cost-effectiveness strategies to assess whether they were up to date and leading to reduced costs for drugs and pharmacy services. In addition, we recommended that the department identify other potential cost-effectiveness strategies to pursue on its own or in collaboration with other federal departments.

We found that although the department monitored some high-risk drugs, it had not adequately monitored drug use trends that were important to veterans' health and the management of its program.

We recommended that Veterans Affairs Canada develop a well-defined approach to monitoring drug utilization. This approach should serve the needs of veterans and help the department manage its drug benefits program.

With respect to marijuana for medical purposes, we found that the decision to cover marijuana for medical purposes was made at the senior management level rather than by the department's formulary review committee. We were unable to determine why this decision did not go through the committee's normal review process.

We also found that Veterans Affairs Canada had identified the need to contain the rising cost of marijuana for medical purposes and had therefore limited the coverage to 10 grams per day. This amount, however, was double what was identified as appropriate in the department's consultations with external health professionals and more than three times what Health Canada reported to be the amount most commonly utilized by individuals for medical purposes.

The veterans' primary care physician was not always the physician who authorized the veteran to utilize marijuana for medical purposes. Although the department had concerns about such situations, it had not systematically monitored authorization trends to determine whether they were of concern. In addition, the department had not monitored whether veterans using marijuana were also using drugs prescribed to treat conditions such as depression.

We note that Veterans Affairs Canada agreed with our recommendations and committed to taking corrective action.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Ferguson.

We'll now turn to Deputy Minister Natynczyk.

[General, Retired) Walter Natynczyk (Deputy Minister, Department of Veterans Affairs]

Mr. Chair, members of the committee, Auditor General, ladies and gentlemen, I'm pleased to be here today on behalf of Veterans Affairs Canada. Joining me today is Michel Doiron, the assistant deputy minister for our service delivery branch, and Retired Captain Dr. Cyd Courchesne, our chief medical officer.

I wish to thank the Auditor General and his staff for their ongoing contribution to assist the department in achieving effectiveness, efficiency, and accountability as we support the well-being of our veterans and their families.

As the Veterans Affairs Minister, the Honourable Kent Hehr, indicated, immediately following the tabling of the Auditor General's report, we accept all of the report's recommendations. We are taking immediate action to ensure the health care benefits program is efficient, valued, and supports the needs of our veterans.

To give you an idea of its size, in fiscal year 2014-15 the Veterans Affairs drug benefits program supported the costs for drugs for approximately 51,000 veterans in the order of $80 million. While the report found that most of the 2004 Auditor General recommendations related to the program were implemented, it did highlight areas for improvement with corresponding recommendations.

The media coverage is concentrated on the cost of marijuana for the Government of Canada and on maximum doses, which risks diverting attention from the fact that the report discusses all drug benefits.

We find as well that sometimes the department's role in the payment of drug benefits could be misunderstood. To clarify, it is Health Canada that is responsible for the regulation of medications for all Canadians, including our veterans. Veterans Affairs Canada does not prescribe medication; rather, it pays for medical treatments authorized by the veteran's physician or health professional.

To review, the Auditor General's report found the following key four points.

First, we do not have an adequate process in place to make evidence-based decisions related to our drug benefits list. Second, we should review our cost-effectiveness and program efficiency strategies. Third, we need to contain the rising costs of marijuana for medical purposes. Finally, we have not analyzed the use of drugs that are not on our drug list but are accessible, on a case-by-case basis, to eligible veterans.

Implementing the Auditor General's recommendations will help us to better achieve our goal of supporting the health and well-being of our veterans in an efficient and effective manner.

I will now briefly discuss VAC's current or planned activity in relation to each of these priority areas.

First and foremost, we need to ensure that systematic evidence-based reviews support our decisions with regard to the drug benefit list. To determine which drug should be included on our list, we look to the expertise of the Canadian Agency for Drugs and Technology for Health. Once Health Canada has approved a drug for use in Canada, this independent agency relies on an advisory body to review clinical cost-effectiveness and patient evidence, and makes recommendations about listing it on provincially-based, publicly-funded drug plans.

A Veterans Affairs national pharmacist was hired last year and is working now with public health plan counterparts to identify best practices in formulary management. An enhanced drug benefit management team is now reviewing the program and developing a strengthened decision-making framework which will identify the types of evidence to be considered, when to consider them, and how they will be assessed to make formulary decisions.

We're also improving timely access to a pharmaceutical support program for those men and women being released from the Canadian Armed Forces. For example, last year in April we implemented changes to ensure that retiring sailors, soldiers, airmen and women continue to receive the same drug benefits from Veterans Affairs that they were receiving from the military based upon drug history and their eligibility for Veterans Affairs programming.

Veterans Affairs Canada will examine and assess the cost effectiveness of its drug list with its federal partners and the Pan-Canadian Pharmaceutical Alliance in order to improve cost effectiveness by May 2017.

The department will leverage its partnerships with Health Canada and other federal drug plans and jurisdictions, and consult with private industry to identify opportunities to implement cost-effective strategies for our program.

Further, Veterans Affairs Canada will regularly assess and review its drug benefits list and claims data. This analysis will inform program changes to help reduce the administrative burden for veterans and lower the costs for delivering the program.

With regard to marijuana for medical purposes, it would be worthwhile to review the context of providing access for marijuana for medical purposes to our veterans.

In 2001, Health Canada began providing controlled access to marijuana for medical purposes to Canadians. It controlled the adjudication of requests, product distribution and costs, as well as setting consumption limits. Supporting regulations outlined which health conditions marijuana could be approved for and which specialists could prescribe marijuana for medical use.

In the Canadian health care system, as I mentioned, the veteran's primary care physician is responsible to determine the appropriate health care treatments to meet his or her patient's needs.

In 2007, based on the approval of a senior manager, the department approved the payment for marijuana for medical purposes on an exceptional basis for one client for compassionate reasons. Starting in 2008, Veterans Affairs allowed for coverage of costs related to marijuana for medical purposes for eligible veterans who were approved by Health Canada. In fiscal year 2008-09, five clients were reimbursed, with expenditures in the order of $19,000. By 2013, these numbers rose to 112 approved clients with expenditures in the order of $400,000.

In 2014, Health Canada introduced regulatory changes that reduced its role to regulate and licence private producers. Restrictions were removed on the quantity of marijuana that could be authorized by physicians and the price was established by private producers licensed by Health Canada.

Based on these changes, Veterans Affairs Canada instituted a practice to approve requests from eligible veterans for up to 10 grams per day if authorized by their physician or health care practitioner, and if they are registered with a Health Canada licensed producer. The Veterans Affairs director general of health professionals, who is also Dr. Courchesne, reviews any requests that exceed the 10 grams per day. While six such requests were approved previously and now grandfathered, no amounts greater than 10 grams per day have been approved under the current guidelines.

Since 2014, the number of veterans using marijuana for medical purposes and the associated expenditures have increased significantly.

Earlier this year, the Minister of Veterans Affairs, the Hon. Kent Hehr, requested a departmental review to assess how we provide marijuana for medical purposes as a benefit to veterans.

This departmental review, including various consultations, was launched in order to assess the current approach to providing marijuana for medical purposes to veterans as a medication. We will be able to take stock of the review in the coming months.

Departmental representatives are consulting medical specialists, suppliers and veterans who have been prescribed medical marijuana in order to learn more about the issue. These consultations are intended to help devise an effective monitoring approach to ensure veterans' well-being.

With respect to monitoring drug utilization, I wish to assure veterans and their families that there are existing alerts in our drug benefits system, as well as at the pharmacy and provincial health care system levels. Nevertheless, we absolutely agree that we need a clearer approach to monitoring drug utilization and detecting trends.

We will ensure that our monitoring practices are systematically reviewed to ensure optimal efficiency, while taking advantage of the best practices of other departments and jurisdictions. Strengthened processes will include regular and documented reporting to our formulary review committee.

All changes to monitoring by VAC of medication use will respect the fact that veterans' health care is mainly the responsibility of their physicians or the accredited health professionals and the health care system.

Mr. Chairman, ladies and gentlemen, I want to assure you that the work is under way now to address our shortcomings, and we will have completely addressed each of the recommendations in the Auditor General's report by the spring of 2017.

Again, I wish to thank the Auditor General and his staff for their work and assistance in supporting the well-being of our veterans, and I thank you for your attention.

Merci.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, deputy minister. We want to thank you for coming today and for your testimony.

We'll now move to the first round of questioning. We will go to Ms. Shanahan, please, for seven minutes.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

My question is for the deputy minister. I thank you for clarifying the role of Veterans Affairs in the administration of the drug benefits. Of course, our concern here is to assess not only the use of public funds, but also how those funds are used for the health and well-being of our citizens, particularly those who have served our country.

What I'm concerned about is how this problem came to blossom to this extent before the Auditor General made his report.

I would like to understand much more the role of the new hire you have, the pharmacist who has come in and whether this person is enough to do the job that he or she faces. I would also like to understand the development of the decision-making framework, and in particular why in your action plan the target dates are simply Q1, Q2, Q3. For a problem that has reached this degree of urgency, I want to know why those target dates are, frankly, loosey-goosey.

[Gen Walter Natynczyk]

Madame, thanks very much for the question.

I guess I would say that over time, in the effort to find efficiencies throughout the department and to structure.... There used to be a pharmaceutical team. That team was decentralized throughout the department and involved a reduction overall in the number of folks with expertise in pharmaceuticals within the department.

That's why last year we recreated this team and brought aboard the expertise to address and really create the leadership, the management, and the structure for us to put together a decision-making framework and move forward with a very deliberate plan, while also recognizing as we move forward that we're working in partnership with our key partners, the Canadian Armed Forces, the Department of National Defence, and Health Canada to make sure we are moving forward in lockstep with them.

I'll just ask whether Dr. Courchesne could expand on parts of your question.

[Dr. Cyd Courchesne, Director General, Health Professionals and Chief Medical Officer, Department of Veterans Affairs]

Thank you, sir.

As was mentioned, when I arrived at the department 18 months ago, there was no pharmacist. I saw that as a gap to the good functioning of the formulary review committee.

We hired a very experienced pharmacist from the Canadian Forces and started right away to put in some procedures to tighten the decision-making that was identified by the Auditor General. We had identified that even before the report came out. Ms. Vesterfelt sits on the Canadian drug review committee of the Canadian Agency for Drugs and Technology in Health. She also sits on several other committees that are all pan-provincial and federal. Her role mainly is to provide analysis and advice to the department, but also to the formulary review committee.

Everything that is presented now needs to be analyzed before it's presented for consideration, and we've established guiding principles. Before, I would say the decisions that were made at the formulary review committee were not made willy-nilly, but the process could have been more rigorous. One of the recommendations from the OAG noted that there was a lack of documentation. Now we have written analysis of items that are presented to the committee for consideration, and they are part now of the records of decisions of the committee so that we have a trail showing how we came to consider this. Among the guiding principles is the principle of cost-effectiveness, so an economic analysis is done for every new item that's brought to committee.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Doctor.

I don't see this as a problem with data collection, because the applications have to be made for the drugs and the payments have to be made, but indeed one of analysis.

I'll get back to the deadlines that you have in your action plan, and I think my colleagues will have further questions on that as well.

Why do we not have tighter deadlines in achieving that decision-making framework? It's at a decision-making point, and frankly it's too far out, I would venture to say.

[Dr. Cyd Courchesne]

I think we gave those deadlines, because although we do have a new national pharmacist and we are hiring staff, implementing new procedures takes time.

I don't think we're going to wait until that date to get things done. Things are under way, and we've given ourselves until next May to complete them, knowing that implementing change can take time to organize, especially when I have just the one pharmacist working with new staff who have been hired to support the drug formulary.

[Michel Doiron, Assistant Deputy Minister, Service Delivery Branch, Department of Veterans Affairs]

Could I add something to that?

The point I would add is that we also want to make sure our decisions are based on evidence in some of these cases, and to actually do the analysis. It does take some time to get it right.

The procedure may not be that complex to write, but do we have the right evidence to make those decisions? As Dr. Courchesne said, we're working diligently to get there. We have to do that analysis and get the information from our partners, whether it is Medavie Blue Cross, who is our big supplier, or Health Canada or the various jurisdictions.

[Gen Walter Natynczyk]

I hear your impatience. I want it solved yesterday.

Again, the point that Dr. Courchesne mentioned in terms of no later than...really pushing on this team to get on with it. Again, it's getting the people into the position, setting up the overall doctrine to make these decisions, but then to get it done like tomorrow.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Because this is blossoming.

[Gen Walter Natynczyk]

Absolutely, ma'am.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Ms. Shanahan.

We'll now move over to the opposition side and to Monsieur Godin.

You have seven minutes.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Mr. Chair.

Ladies and gentlemen, I thank you for being here today and for participating in this exercise which we consider very important.

As parliamentarians, it is our responsibility to try to improve the efficiency of many practices in the different departments, and that is what we are trying to do this morning. I will not speak about the recommendations of the Auditor General nor of the replies that you have provided to them, as these are intentions.

To begin, I have a rather philosophical question for you. We are aware of the scope of the problem affecting the valiant and courageous military men and women who serve our nation, and then suffer from post-traumatic stress when they return from military activities. At the Department of Veterans Affairs, are you sure that the solutions you implement daily are the best?

I'm going to put my question differently. Would it not be relevant to revise the entire medical treatment system for veterans, setting aside the one that is in place and establishing a new one? Needs are growing exponentially. Sick people are consuming marijuana, the costs involved in reimbursing marijuana are exploding, and drugs are not monitored. Moreover, the decisions are taken by public servants without being validated by the committee. This concerns me.

Could you, this morning, give us a real picture of the current situation? Would it not be advisable to re-evaluate the whole situation?

[Gen Walter Natynczyk]

Thank you, Mr. Godin, for your question.

The ministers' priority is the well-being of veterans. Ministers define their mission as treating veterans and their families with empathy, compassion and respect. That is clear. We are the partners of the Canadian Forces, especially as concerns the transition of all soldiers, sailors and members of the Air Force. When these people leave the forces, we have to know what their needs are during the transition period, which is difficult for many of them. Approximately a quarter of them were injured and leave the forces for medical reasons. When they do so, it is important for us to work with their physician so that they and their family receive good care. We also work with the Canadian Forces to improve the transition and be aware of what health care services exist in the city or region where they reside.

It is important to remember that the veteran must recognize his needs and work with his doctor to receive the necessary support. Those who have asked for marijuana for medical purposes did so in order to manage their pain and even their injuries. It is the physician's responsibility to ensure the veteran's health. It's important to remember that.

I'll turn it over to Michel and Cyd.

[Michel Doiron]

Thank you.

As the deputy minister mentioned, the primary responsibility for the veteran's daily care belongs to his attending physician. Our role is to support the process and ensure that appropriate care is available. We try to be stakeholders, but the physician is responsible for the veteran's primary care. When the doctor prescribes medications, we reimburse them and we ensure that they are appropriate. We don't prescribe medication and we don't make diagnoses. That is the role of medical committees in Canada, in the provinces. It is certain that everything we do derives from the empathy, compassion and respect due to our veterans, whether they are grappling with mental health issues or other ones.

There is a lot of talk about post-traumatic stress but there are a lot of other mental health issues. A lot of veterans live in suffering and pain. Those are the two dominant elements. Following the recommendations of the Auditor General and other suggestions, we are modernizing our programs so as to ensure that the care will be given in a timely manner, whether veterans resort to an arbitration process or not.

Dr. Courchesne intervenes a great deal in communities, in the provinces, and with the medical community to ensure that veterans have access to a physician. We know that in certain provinces, it is not always easy to find one. Consequently, we ensure that the veterans are under a physician's care.

[Dr. Cyd Courchesne]

I don't want to give anyone any history lessons, but I want to remind you that the Canada Health Act excludes military persons from the Canadian health care system. When a member of the military leaves the Canadian Forces and returns to civilian life, at that point, the provinces are responsible for their health care.

As you mentioned, there is a problem with regard to operational stress injuries. The department has acknowledged that there are deficiencies in that regard in the health care system.

In 2001, we established a network of clinics specifically to treat these mental health issues. This network includes 10 clinics that work in partnership with the seven clinics of the Canadian Forces, so there are in total 17 clinics. The clinics have recognized that people who live in remote areas do not always have access to these services. Consequently, they set up remote service points away from the main clinics. So there is a network of 27 service points dedicated to responding to the needs of veterans, military members, and RCMP officers who are eligible for these services.

That is what the department has put in place. It reflects 15 years of expertise in mental health care for military members and veterans; this is not found at this time in the public health care system.

I simply wanted to remind the members of the committee that we have indeed taken steps to respond to the needs of this vulnerable population.

[The Chair, Conservative, Kevin Sorenson]

We will now move to the opposition again, to Mr. Christopherson, please.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you all for coming, Deputy and General—you have so many titles. It's good to see you again, sir.

It's fair to say that Canadians have been very unhappy with the way veterans have been treated in Canada. One of the things that the new government promised was that there would be a change. I'm hoping that the answers we hear today indicate that there's going to be a change. That it's not good enough anymore to just say nice things and platitudes about veterans and then ignore them once they come home, especially if they're broken and need help. I'm hoping that we begin to turn the corner, and we hear that today from the answers that we're getting. Because quite frankly, it's been disgraceful. That change needs to happen.

Chair, before I move to my detailed question, in looking at the action plan, which is a key part of what we do, I've already suggested that maybe we need to also look at this in terms of our own self improvement. I know you're interested in keeping us state of the art, pushing the envelope. We do as good a job as possible. We've already talked about having a little more analysis of the action plans, even asking the AG for comments around time frames and such.

May I also suggest to our analysts when we're looking at this, that maybe we need a template. It would be a lot easier and more efficient for us to focus on what we need if all the action plans were always laid out the same, rather than our having to go through each one to figure out how they have been laid out and having to do that work. These are small things or details that the public is not all that interested in, but they are important to us, and I would hope that at some point we can refine our efforts in this area.

The Auditor General would know, and Deputy, I think you would know from your past role, that one of the things this committee takes incredibly seriously is the recommendations in previous audits, especially when the ministry has said, “We agree with the findings” and then the Auditor General goes back and finds out that what had been suggested didn't get done. Let me say to you, Deputy, we've had occasions where there have been multiple audits and the department is still saying they agree and all of the nice flowery things that we want to hear, but then nothing happens. This really launches us. It certainly launches me when I see that.

We have some elements of that here again today. I reference page 14 in the English document, paragraph 4.59 on pharmacy alerts, which states:

In response to observations from our 2004 audit, Veterans Affairs Canada strengthened its alerts for the potential overuse of narcotics and benzodiazepines, which are sedatives, so that alerts are issued regardless of where the veteran filled the prescription. The Department also partly addressed our recommendation to monitor instances in which pharmacists dispense drugs to veterans in spite of a pharmacy alert. These instances are monitored when they involve potential abuse or overuse of narcotics and benzodiazepines, or when a veteran tries to obtain the same prescription from the same pharmacy within a seven-day period. However, all other instances in which a pharmacist dispenses a drug in spite of an alert, such as those related to a potential drug interaction, were not monitored.

I can ask the AG to explain further, but it sounds relatively self-explanatory. Can you please give us an answer why something that was uncovered in 2004 and needed to be fixed was only partly fixed? There are some parts of that audit and the commitments this department made that have not been honoured. Please, it's time for accountability. Why is that?

[Gen Walter Natynczyk]

I'd like to say a couple of things right upfront, then ask Dr. Courchesne to pile on.

The first is the department's culture. You talked about the need for change in the department. I have to tell you, I speak to a lot of veterans. There are a lot of veterans who, unfortunately, don't come to us soon enough. We are changing our practices so they come to us as soon as they're ready—it's part of dealing with the stigma of mental health—so that those veterans feel safe coming forward, that their families and their battle buddies support them in coming forward, and that when they do come forward, the department then supports them. That's why we've put in place the idea of care, compassion, and respect and are empowering our employees so they have the opportunity and the authority to say yes when, indeed, a veteran needs support.

We're changing that culture. I just want to make sure you realize that. Part of that culture is also including support for the families, because again, without the support of families these veterans will not come forward.

With regard to the 2004 audit, I want to again say that we have made some progress in putting the right trip flares and indicators in place, but I'm going to ask Dr. Courchesne to pile on at this point and go into a bit more detail and better pronunciation of some of the drugs you were mentioning.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, I appreciate that.

[The Chair, Conservative, Kevin Sorenson]

Dr. Courchesne.

[Dr. Cyd Courchesne]

I want to say upfront, and I don't want this to sound like an excuse, but we are not a health care system. We don't prescribe. We don't provide the care directly. We manage a drug formulary. We make available and accessible the drugs that our population needs, and at the best price for the government.

There are alerts in the system. I don't want to leave the impression that everything is reimbursed and that there are no alerts. What was not happening in 2004 was that we were not asking for regular reports of Blue Cross Medavie, who administer the program for us, to give us those reports. But they do send us reports of people who are exceeding the limits, and we do scrutinize those send them back to their care providers. We send letters to their care providers saying, “Did you know that we've been asked for two prescriptions?”

But things have changed in Canada with pharmacy. Pharmacists and pharmacies in every province are all connected now. There used to be a time when you could go doctor shopping for prescriptions and to three different pharmacies and nobody would know. Well, now they know. Now these alerts for drug interactions and for shopping around are done at the point of service, so we don't need to monitor that because it happens right there. If a pharmacist sees that someone went around somewhere else, at another Shoppers Drug Mart, to ask for a prescription for benzodiazepines, they will contact that pharmacist and the prescriber and it will stop right there.

It's the same for drug interactions. Because we are not the care providers, we don't monitor those. The pharmacists will say right away, “This drug is not good to take with this drug. You're taking this for your hypertension and this drug should not be prescribed to you.” Then they contact the prescriber immediately.

There are redundancies in the system and we don't need to be monitoring that now.