Quitting the fight on drug prices

Contrary to the Ottawa buzz, our prime minister isn’t too woke; he’s too weak. Politicians can be judged by how well they stand up to powerful interests — that is, how tough they are in defending the public against weighty forces trying to enrich themselves at public expense.

Some politicians clearly don’t stand up to powerful interests. Premier Doug Ford, for instance, is too busy partying with them, serving them up juicy chunks of farmland for development.

But Justin Trudeau purports to defend the public interest and manages to win over lots of progressive voters by appearing to do so.

Out of the limelight, however, he’s weak standing up to the powerful — as we can see in the sad case of his feeble attempt to control spiralling drug prices.

This is a hugely important file — drug prices in Canada are among the highest in the developed world, contributing to inflation and rising health care costs. But correcting the problem means taking on the multinational drug industry which, through its patent monopolies, controls access to vital, often life-saving drugs.

Ottawa used to protect Canadians from Big Pharma’s monopoly power through “compulsory licensing” — which allowed generic versions of brand-name drugs to be produced under licence.

This highly effective system was scrapped by the Mulroney government due to pressure from Washington during free trade negotiations in the 1980s. Washington was championing the interests of the big U.S. brand-name drug companies, which always hated compulsory licensing. They preferred outright monopoly.

Bowing to U.S. demands, Mulroney replaced compulsory licensing with a regulatory body called the Patent Medicine Prices Review Board (PMPRB).

But the new system never worked very well for Canadians. Without compulsory licensing, the brand-name companies got to enjoy a longer monopoly period before the patent on a new drug expired and generic versions were allowed on the market.

Drug prices rose incessantly, with a year’s supply of insulin, for instance, reaching $2,500 — five times the 1985 inflation-adjusted cost.

The brand-name companies also failed to deliver on their promise that, without compulsory licensing, they’d increase their R&D spending in Canada; their spending (as a ratio of sales) has actually fallen by more than 70 per cent since 1995.

So, in 2017, proclaiming his intention to protect Canadians from “excessive drug prices,” Trudeau introduced reforms to make the PMPRB more muscular in order to save Canadians about a billion dollars a year in drug costs.

But the highly organized drug companies swung into action, determined to prevent the PMPRB from setting an international precedent for taking on Big Pharma.

The industry was able to draw on support from right-wing media commentators and patients’ rights groups — some of which are industry-funded — that blamed government for the drug delays.

In response, the Trudeau government kept limply retreating, setting a date to implement its reforms and then timorously backing off at the last minute. After years of retreats, and with only part of the original reforms still intact, the Trudeau government has quietly folded its tent, letting the industry have its way.

As documented in a recent investigative piece by Kelly Crowe in The Breach, Health Minister Jean-Yves Duclos wrote confidentially to the head of the PMPRB last November urging the board to suspend its reform process. The PMPRB chair resigned and has been replaced by an industry-friendly lawyer.

Big Pharma is an intimidating force that fights relentlessly, publicly and privately, to protect the interests of its shareholders. But is it too much to expect the Trudeau government to fight with similar zeal, to protect the interests of its citizens?