After a 5-year battle to cut drug prices, Ottawa’s promise is quietly falling apart

The first clue was the timing – late afternoon before a long weekend.

It’s a classic move for governments to make controversial announcements when fewer people are paying attention.

So when an innocent sounding press release from Health Canada on “continuing changes to Patented Medicines Regulations” appeared on April 14 at 5pm, the eve of the Easter holidays, there were few headlines.

But it was breaking news as the Trudeau administration announced the end of a five-year battle with the pharmaceutical industry over regulations to lower drug prices.

When the federal health minister explained nearly a week later why his government was abandoning reforms that could have saved billions in drug costs, Jean-Yves Duclos called the industry’s needs “for research, development and manufacturing capacity.”

So what started with a promise to protect Canadians ended up with a commitment to support pharmaceutical companies.

The battle exposed the rifts between Canada and the global pharmaceutical industry — and drug advocates believe it could foreshadow the backlash that may await a national pharmaceutical plan.

Some of the most passionate opponents were patients, who fought on the side of industry and lobbied for the right to pay some of the highest drug prices in the world.

Health Minister Jean-Yves Duclos makes a funding announcement in Ottawa on May 11, 2022. In April, when explaining why his government waived reforms that could have saved billions in drug costs, he cited the industry’s needs for research, development and manufacturing capacity. .’ (Sean Kilpatrick/The Canadian Press)

And the world watched. Canada tried something new to control drug prices, and the outcome is said to have set an international precedent. That put the global pharmaceutical giants on edge, experts note.

“Canada would be the first country to introduce some regulation to ensure you can’t abuse your pricing power by enacting regulations based on market size,” said Marc-André Gagnon, a political economist with Carleton University’s School of Public. . Policy and administration.

“This was something super interesting for other countries, but threatening to the global drug industry.”

‘Without a doubt’ policy would cut drug costs

The saga began with a speech to the Economic Club of Canada in 2017, when then-Health Secretary Jane Philpott outlined a series of regulatory reforms to Canada’s drug pricing agency – the Patented Medicine Prices Review Board (PMPRB).

“It will undoubtedly have a significant impact on the lives of Canadians. It will reduce unacceptably high drug costs,” Philpott told the diners, who paid $100 for a seat at the sold-out event.

VIEW | Ottawa promised that tweaks to patent drugs would save billions:

Ottawa says Canadians will save billions with changes to patent drug system

The federal government is making changes to how it will evaluate the prices of new drugs, an adjustment it says will save Canadians billions over the next 10 years. 2:00

With those new tools, Canada would become one of the first countries in the world to need proof that the pharmaceutical industry’s most expensive new drugs are value for money.

The new policy would also force pharmaceutical companies to tell the truth about their prices. The final prices are only decided after negotiations behind closed doors – increasingly closely guarded business secrets. That means the Canadian drug pricing agency doesn’t know the actual prices it needs to evaluate.

And finally, the new rules would change the list of countries used to determine if Canada’s price is excessive, drop the US and Switzerland, and add six new countries with markets similar to Canada’s.

Overall, it was a formula that would work to bring prices down, according to both industry and government assessments.

The pharmaceutical lobby hit back with a constitutional challenge, two federal courts and a range of threats, including trade disputes, job cuts and a warning that they would delay the launch of new drugs in Canada.

That mobilized an angry coalition of patient groups — many with financial ties to the pharmaceutical industry — who insisted that the threat of withholding new drugs would create a dystopia that would gain access to drugs.

“Millions of lives are at stake,tweeted the Canadian Organization for Rare Disorders. The federal government’s new policy would force “prices so low that life-saving drugs are no longer coming to CanadaThe Canadian Society of Intestinal Research said in a tweet.

“It was a bit apocalyptic in terms of the wording used,” Gagnon said. “People don’t understand the real dynamics that are going on in the pharmaceutical industry right now and why we absolutely need to change the way we regulate the prices of patented drugs.”

Surprising support for high drug prices

Canada already has a problem with access to drugs caused by high prices. Every year, global drug prices reach new levels and Canadians pay some of the highest prices in the world.

One in four Canadians⁠ report that they cannot afford to fill prescriptions, according to a 2020 study by the Angus Reid Institute. studies have shown that Canadians are give up food and heat to try to cover the cost of their prescription drugs.

With what medicines cost over $500,000 per patient per year, counties and private drug plans often impose restrictions — such as requiring a patient to wait until they are sick enough to qualify for expensive therapy. Some drugs are so expensive that they are not covered at all,⁠ forcing patients to launch fundraising campaigns to someone to pay

But as the federal government tried to bring the situation under control, the slump showed surprising support for high drug prices.

Groups that speak against the policy included pharmacy chainsI, doctors and Research groups⁠—all concerned that Canada could not afford to pay less for drugs. Their argument hinged on the dangers to Canada of creating a hostile environment for the drug industry.

But even in a friendly environment, the pharmaceutical industry didn’t to deliver on his promises to Canada.

More than 30 years ago, under pressure from the US drug lobby, Canada extended drug patent protection to 20 years. In exchange for two decades of monopoly power, Canada was promised more pharmaceutical research and development (R&D). But R&D investments in Canada have: steadily fallen, to one of the lowest of the industrialized countries.

‘Rolling in front of pharmaceutical companies’

From the outset, there were indications that the new policy was not successful.

“I want new rules to be in place by the end of 2018,” Philpott told the lunchroom when she announced the new rules.

Former Health Secretary Jane Philpott discusses the high cost of drugs during a speech to the Economic Club of Canada in Ottawa, May 16, 2017. (Fred Chartrand/The Canadian Press)

But that first deadline passed quietly as backroom bureaucrats struggled to consult with industry and patient groups on how to implement the policy. At the time, the PMPRB’s executive director, Douglas Clark, described the negotiations as “like pulling teeth

The federal government has delayed regulation four more times over the next two years, putting Canada at an uneasy moment at odds with the international pharmaceutical industry — in the midst of a pandemic, competing with the world for vaccines.

“I think Canada could have moved on with this if we hadn’t had the pandemic,” Gagnon said. “We’re kind of creeping up on the pharmaceutical companies to have supply agreements on vaccines that aren’t produced here. In short, Canada was in a very precarious position.”

The industry dragged Canada through the courts, including launching a constitutional challenge in Quebec, arguing that drug pricing rules enter provincial authority.

Quebec Court of Appeal knocked down two of the three regulations in February, giving only Canada the right to use a list of countries for price comparison. The federal government decided not to appeal the decision to the Supreme Court of Canada.

Instead, Duclos withdrew the two most controversial amendments on the eve of the Easter weekend. Ultimately, Canada would not ask the pharmaceutical industry to disclose its actual prices or justify it being value for money.

The only remaining policy – the list of 11 comparators – is expected to come into effect on July 1, five years, four delays and three legal proceedings later. Estimated drug price savings have been reduced to about $3 billion in 10 years, a third of the original estimates.

Explaining his reasons, Duclos said, “we are aware that we need to have a strong pharmaceutical industry in Canada, especially given the lesson we have seen from COVID-19.”

Two weeks later, the federal government announced that Moderna was building a new factory for the production of COVID-19 vaccines in Quebec.

Prime Minister Justin Trudeau speaks during an announcement about the opening of a Moderna vaccine production and research facility in Montreal, April 29, 2022, as ministers Francois-Philippe Champagne, left, and Duclos look on. (Graham Hughes/The Canadian Press)

Another chance to fight drug prices

Canada has another chance to challenge the pharmaceutical industry over exorbitant drug prices.

The Trudeau government has said in an agreement with the NDP that it will… finally deliver on a long-standing promise “of national pharmaceutical concern” – a policy that would give Canada strong purchasing power to get a better deal. But experienced pharma watchers expect the pharma lobby to retreat.

“Is this government too friendly with industry? Are they too concerned about profits and jobs in pharma? This is the ultimate test,” said Steve Morgan, a health economist at the University of British Columbia and an expert on international pricing. of medicines.

The financial stakes for the pharmaceutical industry could be even greater this time around, as the collective purchasing power generated by a national pharmaceutical plan expected to cut the cost of drugs by $5 billion a year.

But this time, Canada is no longer at the forefront of drug price reform. As the only country with a national health care program that does not give access difficult international precedents have already been set for prescription medicines.

Leave a Comment