After a 5-year battle to lower drug prices, Ottawa’s pledge is quietly collapsing

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

It is a classic move for governments to make controversial advertisements when fewer people are paying attention to them.

So when it seems harmless new version From Health Canada on ‘Progressing Amendments to Registered Medicines Regulations’ released at 5pm on April 14, the eve of the Easter holiday, there were few headlines.

But it was breaking news, because the Trudeau government was announcing the end of a five-year battle with the drug 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 cited industry needs – “for research and development and production capacity”.

So what started with Promise to protect Canadians ended their commitment to support drug companies.

The battle has exposed fault lines between Canada and the global pharmaceutical industry — and pharma advocates believe it may be a harbinger of the resistance that may await a national pharmaceutical plan.

Some of the most ardent opponents have been patients, who are fighting alongside the industry, pushing for the right to pay some of the world’s highest drug prices.

Health Minister Jean-Yves Duclos made an announcement about funding in Ottawa on May 11, 2022. In April, when he explained why his government was abandoning reforms that could have saved billions in drug costs, he noted the industry’s needs for research and development and production capacity.’ (Shawn Kilpatrick/The Canadian Press)

And the world was watching. Canada was trying something new to control drug prices, and the result may have set an international precedent. Experts pointed out that this put international pharmaceutical companies on high alert.

“Canada will be the first country to put in place some regulation to make sure you can’t abuse your pricing power by putting in place regulations based on market size,” said Marc-Andre Gagnon, a political economist at Carleton University’s School of Public Sciences. Politics and administration.

“This was something very interesting for other countries, but it threatens the global pharmaceutical industries.”

‘Undoubtedly’ policy that will reduce drug costs

The saga began with a speech to the Canadian Economic Club in 2017, when then-Minister of Health Jane Philpott outlined A set of regulatory reforms To the Canadian Medicines Price Agency – Patented Medicines Price Review Board (PMPRB).

“Without a doubt, it will have a huge impact on the lives of Canadians,” Philpott told diners who paid $100 for a seat at the completely sold-out event. “It will bring down unacceptably high drug costs.”

Watch | Ottawa promised to overhaul the patent system that would save billions:

Ottawa says Canadians will save billions through changes to the patent system

The federal government is making changes to how it will set prices for new drugs, an adjustment it says will save Canadians billions over the next 10 years.

With these new tools, Canada will become one of the first countries in the world to require proof that new, more expensive drugs in the pharmaceutical industry provide value for money.

The new policy will also force drug companies to tell the truth about their prices. Final prices are determined only after closed negotiations – they become under heavy guard Corporate secrets. This means that the CMPA does not know the actual prices it is evaluating.

Finally, the new rules will change the list of countries used to determine whether Canada is overpriced, bringing down the US and Switzerland, and adding six new countries with markets similar to Canada.

Altogether, it was a formula that would bring down prices, according to industry and government estimates.

The pharmaceutical lobby responded with a constitutional challenge, two federal court challenges and a series of threats, including trade disputes, job losses and a warning that they would delay the release of new drugs in Canada.

This mobilized an angry coalition of patient groups – many with funding links to the drug industry – who insisted that the threat of withholding new drugs would create a drug-access dystopia.

Millions of lives are at risk,“Canadian Organization for Rare Disorders tweeted. Federal government new policy to be enforced”Prices are so low that life-saving medicines are no longer coming to CanadaThe Canadian Association for Gut Research said in a tweet.

“It was kind of a visionary in terms of the wording used,” Gagnon said. “People don’t understand the real dynamics at work in the pharmaceutical sector right now and why we absolutely need to change the way we regulate prices for patented drugs.”

Sudden support for high drug prices

Canada already has a problem with drug access due to high prices. every year, International drug prices Reach new levels and Canadians pay Some of the highest prices in the world.

One in four Canadians Report They can’t afford prescriptions, according to a 2020 Angus Reid Institute survey. studies Canadians have shown themselves Give up food and heat To try to cover the cost of their prescribed medications.

With some medicines it costs Over $500,000 For each patient per year, counties and private drug plans often set restrictions — such as requiring a patient to wait until they are sick enough to qualify for expensive treatment. Some drugs are very expensive and not covered at all, leaving patients to launch fundraising campaigns to get them someone to pay.

But when the federal government tried to control the situation, this opposition revealed surprising support for high drug prices.

It included groups that spoke out against politics pharmacy chains⁠ , the doctors And Research Groups ⁠— all concerned that Canada cannot pay less for drugs. Their argument hinged on the dangers to Canada of creating a climate hostile to the drug industry.

But even in the friendly climate, the pharmaceutical industry has not to hand in On its promises to Canada.

More than 30 years ago, after pressure from the US anti-drug lobby, Canada extended drug patent protection to 20 years. In exchange for two decades of monopoly power, Canada received promises of more pharmaceutical research and development (R&D). But investing in research and development in Canada has fell steadily, to one of the lowest among industrialized countries.

grovel in front of pharmaceutical companies

From the start, there were indications that the new policy was inauspicious.

“I want to have new regulations in place no later than the end of 2018,” Philpott told the lunch crowd when the new regulations were announced.

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

But the first deadline passed quietly, as backroom bureaucrats struggled to consult with industry and patient groups on how to implement the policy. At the time, PMPRB CEO Douglas Clark described the negotiations as “like tooth extraction. “

The federal government has postponed regulations four more times over the next two years, putting Canada at odds with the international drug industry at a critical time — amid a pandemic, the world has competed over vaccines.

“I think Canada would have been able to move forward with this if we didn’t have the pandemic,” said Georgette Gagnon. “We kind of cringe for pharmaceutical companies to make agreements to supply vaccines that weren’t produced here. Basically, Canada was in a very precarious position.”

Industry has dragged Canada into the courts, including launching a constitutional challenge in Quebec, arguing that drug pricing regulations were treading on the authority of the province.

Quebec Court of Appeal subtracted Two of the three regulations are in February, allowing only Canada the right to use the list of countries to compare prices. The federal government decided not to appeal the decision to the Supreme Court of Canada.

Instead, on the eve of the Easter holiday, Duclos withdrew the two most controversial amendments. Ultimately, Canada will not require the pharmaceutical industry to reveal its true prices or justify that it is offering value for money.

The only remaining policy – a list of 11 comparable countries – is scheduled to go into effect on July 1, five years, four delays, and three court appeals later. Estimated drug price savings have been reduced to about $3 billion over 10 years, a third of the original estimate.

As he outlined his reasons, Duclos said, “We recognize that we need a strong pharmaceutical industry in Canada, especially given the lesson we’ve seen through COVID-19.”

Two weeks later, the federal government announce that Moderna was building a new factory to manufacture COVID-19 vaccines in Quebec.

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

Another opportunity to fight drug prices

Canada has another opportunity to challenge the pharmaceutical industry over excessive drug prices.

Trudeau’s government, in arrangement with the NDP, has said it will do so Finally delivery Building on a longstanding “national pharmacy” promise – a policy that would give Canada strong purchasing power for a better deal. But seasoned drug watchdogs expect the drug lobby to back down.

“Is this government very comfortable with the industry? Are they so concerned about profits and jobs in pharmaceuticals? This is the ultimate acid test,” said Steve Morgan, a health economist at the University of British Columbia and an expert in international drug pricing.

The financial risks of the pharmaceutical industry may be higher this time, because the collective purchasing power generated by a national plan for the pharmaceutical industry is is expected To cut drug costs by $5 billion a year.

But this time Canada is no longer leading drug price reform. As the only country with a national medical program do not provide access For prescription drugs, difficult international precedents have already been set.

Leave a Reply

Your email address will not be published.