A conversation on Big Pharma’s expenditures — with the facts

Posted on February 15, 2017

The Globe and Mail
Wed., Feb. 15, 2017
Section: Report on Business

Byline: Declan Hamill, Vice-president, legal, regulatory and policy at Innovative Medicines Canada

We are deeply disappointed by the misleadingly titled “Big Pharma vs. Everyone” article published in the November issue of Report on Business Magazine. The headline implies that pharmaceutical companies are attacking or opposed to everyone, but that is simply not the case. We believe that the article is unbalanced and does not accurately reflect the innovative medicines industry and the true value that it brings to our country, which are more comprehensively documented on our website, innovativemedicines.ca.

Expenditures on drugs in Canada are significant but need to be placed into context. A study by the Canadian Health Policy Institute shows that innovative medicines account for 6.4 per cent of the total Canadian healthcare budget, a decrease from 8.4 per cent in 2005.

Patented drug prices are regulated in Canada by the Patented Medicine Prices Review Board (PMPRB), which sets a price ceiling that must fall within Consumer Price Index (CPI) measures. According to the PMPRB’s own data, patented drug prices have, in fact, increased at less than the CPI for the past 10 years on average.

For 30 recently launched innovative medicines, the price in Canada was second lowest among the seven PMPRB comparator countries, including the Hepatitis C products that are referred to in the article, according to data by IMS Brogan. For all patented medicines, prices in Canada are, on average, 13 per cent below the median international price, according to the PMPRB’s 2014 annual report.

The article also fails to mention that this new generation of innovative Hepatitis C drugs is curative. That is, they eradicate the Hepatitis C virus from a patient’s system.

Their prices should be considered in light of the risky and invasive alternative treatments – liver transplants – that are no longer needed when patients have access to these medicines.

These medicines also yield significant savings for other elements of our healthcare system by eliminating the need for expensive surgical procedures and by reducing hospital stays for patients. The article references fines paid in the United States by companies, but cites no fines or evidence that similar issues exist in Canada.

Tarring all companies with the same brush is unfair and leaves the impression that the same issues must exist in Canada, without providing any evidence to support the insinuation. Since 1988, Innovative Medicines Canada has had a strong and robust code of ethical practices. It forbids member companies from offering payments or inducements that are unlawful or improper inducements.

Adherence to the code is a condition of membership of Innovative Medicines Canada.

We also take issue with the article’s statement that Innovative Medicines Canada’s then interim president “complained” about cost containment. The “complaint” referred to is a blog posting titled “Cost, Effectiveness and the Value of Innovation” discussing the ways that drugs provide value to healthcare systems above and beyond treating patients. It discusses how the value of curing a patient can be captured by the healthcare system in more than just dollars.

A real-world example is the innovative medicines that cure Hepatitis C, instead of having a liver transplant and a lifetime regimen of anti-rejection drugs.

Canada’s innovative pharmaceutical companies invest more than $1-billion every year in research and development to create new innovative medicines and vaccines that save or improve the lives of Canadian patients. The conversation regarding the need for better value for and increased access to innovative medicines within Canada’s healthcare system is indeed important, but it is a discussion that needs to be informed by the facts.

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