There may be people who share a different opinion, but in our view the regulations under the PMPRB are strict. The prices of existing patented drugs cannot increase by more than the consumer price index. Introductory prices for new drugs are limited to the range of prices for other drugs which treat the same disease, unless the new drug represents a breakthrough or a substantial improvement. In that case, its price cannot exceed the median of prices charged for those drugs in other industrialized countries.
The evidence, notwithstanding the objections opposite, indicates that the PMPRB is doing its job in controlling patented drug prices. I ask members to consider some of the facts.
The member for Regina-Lumsden will note that in 1995 patented drug prices actually decreased by 1.75 per cent. That was the second year in a row that prices actually declined. By comparison, in that year the consumer price index actually rose by 2.14 per cent. My colleague may not be impressed with that but the fact is that there was a decrease.
Price increases for patented drugs have consistently been below the consumer price index ever since the PMPRB was created in 1987. Before that the member will know that drug prices were increasing at rates well above the consumer price index. As I said
earlier, I want to address the element of this bill that takes issue with health expenditures and drug costs.
In 1994 for the first time, patented drug prices in Canada were on average below the median international price. In 1994 the prices of new breakthrough drugs in Canada were on average 11 per cent lower than the median international price.
The reason I highlight these facts is to show first, that even in the absence of compulsory licensing, patented drug prices have remained under control and second, to show that influencing patented drug prices will not necessarily lead to reduced expenditures on drugs. The reason for this is not that difficult to see.
Overall drug prices and overall drug expenditures are influenced by additional factors such as the price of non-patented drugs, pharmacy dispensing fees, and the rate of utilization. All of these are factors which provincial governments are finding much to their dismay are contributing to a very large extent to the overall health costs. No matter how low prices are, the more drugs people take, the more drug expenditures will increase.
Federal, provincial and territorial ministers of health have recognized that action on drug costs can and must occur on many fronts. In April 1996 they directed deputy ministers of health to review and to report back on six pharmaceutical issues: price; utilization; marketing; consumer education; research and development; and waste.
Current estimates of wastage would astonish even the members opposite. They are well over 10 per cent of the overall costs. I am confident the work by the deputy ministers will lead to collaborative initiatives that will have a real impact on drug costs, the effective use of medicines and the health of Canadians. Working together with provinces and territories to discover and address the root causes of increasing drug costs is the way to achieve results.
We need to encourage pharmaceutical investment and research and development in Canada. It is in these kinds of jobs and these kinds of job creation opportunities that we can bring Canada's economy into the 21st century and make substantial contributions to the health and well-being of Canadians.
The factors that have helped Canada to attract this investment in R and D, and I refer to our excellent university structure, a competitive tax regime, and a supply of eminent scientists, would not be able to overcome the negative impacts of this bill. I refer back to Bill C-91 because what the member's bill does is it pre-empts what is required by Bill C-91 and that is a parliamentary review four years after royal assent, i.e., in 1997.
As I said in my opening remarks, it is one thing to propose an item of legislation and it is another one to pre-empt a process that is already in place and to try to predict and influence its outcome when it is going to be open for all members of this House.
Only when that review is completed and only when we have struck the appropriate balance between industrial objectives and health issues in Canada can we look at the patent policy to examine how it should be adjusted.
As I said earlier, this bill would pre-empt the process of that parliamentary review and presumes that change is needed without giving stakeholders a chance to participate and without allowing the evidence to be considered.
My minister has already indicated an openness and a willingness to ensure that the process works and works properly. In fact, he has already asked the national forum to speed up its work and to produce the work on its consultations for the benefit not only of that review but for the benefit of other reviews on health.