Health committee  If you want an innovation strategy on R and D in the pharmaceutical sector, you have to improve the productivity of the R and D itself. Manufacturers locate their research and development investments based on science. If you want good scientific research conducted in Canada, invest in Canadian science, invest in data platforms, invest in clinical trial networks, those kinds of things.

Health committee  Thanks. That's a great question. There are a few things under way. The federal government is consulting to try to develop something of an actual strategy around rare diseases. Canada has lacked that to date. I think that's very promising. There's funding for the medicines when patients need them, but there are also the various mechanisms that need to be put in place for the assessment of medicines as they come to market, and to support both manufacturers and patients in navigating often complex and uncertain information about whether the medicines are going to work or not.

Health committee  I don't have the number off the top of my head. I know that Chris McCabe will be speaking later with this committee. He might have that number. It's a significant percentage, particularly if you include tax expenditure subsidies, which we provide for the private investment, in addition to government grants and non-profit organizations sponsoring research itself.

Health committee  I don't want to give you a number without having the statistics in front of me.

Health committee  Yes. In comparison with international comparators, most notably those in Europe and Australasia, there's no question that we pay higher prices. In comparison with what private insurance companies in the United States pay and what national agencies like the Veterans Health Administration pay in the United States, unquestionably our prices are excessive in Canada.

Health committee  Yes, approximately. In fact, that's an account of list prices. If you looked at comparator countries, high-income countries with universal health care systems, Canada is probably one of the highest price-paying markets for pharmaceuticals even after you account for the negotiations that our provinces undertake.

Health committee  That's a great question. People throw out these statistics and these stories, frankly, about drugs that don't come to market in Canada. The fact is that drugs go to market in a few places in the world in very large numbers, and then in other markets around the world, they go to market basically on the basis of whether the drug is truly a breakthrough that will earn market share.

Health committee  No. One only needs to look at, for instance, the United Kingdom, a country that pays less than us, gets more medicines on its market and actually has higher research and development in the pharmaceutical sector, so there you go.

Health committee  I'm not particularly clear on what you mean by models based on fixed costs. Actually, some of the other witnesses have mentioned.... I think everybody is opposed to excessive pricing of medicines, pricing that can't be defended on the basis of value for money in the health care system.

Health committee  The new PMPRB guidelines will affect prices to some degree in Canada, but it is important to recognize that if you bring down the list prices of medicines in Canada you may not have as dramatic an effect on the final net-of-rebate prices. For example, let's just pretend the list price of a medicine is $100 and the manufacturers and provincial drug plans have negotiated that a price of $70 is actually value for money, which is about right in terms of the average rebate that they negotiate on behalf of public health systems in Canada.

Health committee  Thank you very much. I appreciate the opportunity to speak to you today. By way of introduction, I am an economist by training, and I am a full professor of health policy at the University of British Columbia. I think it's important to note, for instance, that I've published over 150 peer-reviewed research papers on pharmaceutical policy.

Health committee  I think the best estimates are that we'd save about 30% of what we're spending at that time, and at the time we did the Canadian Medical Association Journal study, that was about $7 billion of the drugs eligible for coverage. By the time Canada rolls such a program out, it will be a different number.

Health committee  I think, particularly under an essential medicines list, you could realize it within a year, because it's inherently feasible to start running a program of that kind, and then it will take a couple of years to move forward on a larger formulary. Just bear in mind that our comparator model in North America might be the USVA.

Health committee  The estimates that are available for Canada are not great. We don't have gold standard science at present, so they range from $1 billion to $9 billion, depending on which study you look at. In using studies that have been done in the United States about the effect of getting access to preventative medicines for patients insured in the U.S., they actually find that you save as much money in the rest of the system as you spend on the coverage.

Health committee  I think it's safe to say we do have a fairly good idea of people who can't access medicines. It is people with lower income, and not having coverage is the most significant determinant of whether or not you are going to fill a prescription. In fact, a high-income person without insurance is more likely to not fill a prescription than a low-income person with insurance.