NEW DRUG PRICING RULES ARE CAUSING CONCERN AMONG INDUSTRY AND PATIENT ADVOCACY GROUPS WHO WORRY THAT THE CHANGES COULD REDUCE CANADIANS’ ACCESS TO NEW DRUGS AND CAUSE SHORTAGES.
OTTAWA • Industry groups and patient advocates are raising concerns about the federal government’s new drug-pricing rules, claiming they will limit access to much-needed drugs and discourage drug companies from investing in Canada.
But drug policy experts say the changes, which the government estimates will yield savings of $13.2 billion over the next decade, are long overdue, and argue that pharmaceutical companies are simply fearmongering to protect their bottom line.
Canadians currently pay among the highest patented drug prices in the world, behind only the United States and Switzerland. On Friday, Ottawa unveiled a suite of regulatory changes intended to help the Patented Medicine Prices Review Board (PMPRB), a quasi-judicial body intended to shield Canadians from excessive drug prices, to make patented medicines more affordable.
“Today, we take the biggest step to lower drug prices in a generation,” Health Minister Ginette Petitpas Taylor said in a statement. “These bold reforms will both make prescription drugs more affordable and accessible for all Canadians.”
One of the major changes announced Friday would remove the U.S. and Switzerland from the list of countries Canada looks at when determining the maximum price drug companies can charge for a given medication. The government has added several other countries to the list that have similar economic conditions to Canada’s, but lower drug prices, including Australia, Belgium and Japan.
The new regulations will also require drug companies to reveal the real prices they charge insurers. Currently, the PMPRB can only regulate the list prices drug companies provide, despite the fact that the companies often offer insurers significant rebates.
The government is also adding new factors the PMPRB must consider in evaluating whether drug prices are excessive, including the health benefit a medication provides relative to its cost, the size of the demand, and GDP.
Together, Ottawa estimates the changes will result in savings of $8.8 billion in 2019 dollars over the next 10 years, or $13.2 billion with inflation and other factors included. The new regulations are set to come into force on July 1, 2020.
On Friday, Innovative Medicines Canada (IMC), which represents the pharmaceutical industry, warned the changes could reduce investment in research and development and make companies less likely to launch their drugs in Canada. “Given what we have heard to date, our fear is that patients will be worse off,” IMC president Pamela Fralick said in a statement. The organization said the new regulations could lower drug ceiling prices by up to 70 per cent.
Patient advocacy groups, which often receive funding from the pharmaceutical industry, are raising similar concerns about what the changes will mean for prescription drug availability in Canada. “There are patients dying today and suffering today because there is no good therapy for their health condition,” said John Adams, the volunteer chairman of the Best Medicines Coalition. “I’m not satisfied that the government has done an adequate study of what this could do to patients in the future in terms of getting access to new therapies.”
The government claims that most existing patented drugs are already priced low enough that they won’t be affected by lower price ceilings, and the new rules will largely affect only the most overpriced medicines
Steve Morgan, a health economist at the University of British Columbia, said the United Kingdom spends 40 per cent less on prescription drugs than Canada does, but has five times the investment in research and development per capita. He also said evidence from other countries casts doubt on a link between high drug prices and reduced access to new medicines.
“Those countries have the drugs that we would think of as innovative, but they’re paying a lot less than we are,” he said. “We’ve got to ask ourselves, ‘Is it a credible threat?’ ”
The regulatory changes come as the government considers how to move forward on a national pharmacare program to provide prescription drug coverage for all Canadians.
In June, an advisory council led by former Ontario health minister Eric Hoskins recommended the establishment of a universal, single-payer pharmacare system.
But the Liberals have yet to say whether they will embrace that recommendation or move ahead with a less costly model that would merely fill the gaps in coverage, leaving existing private insurance plans in place.