Remarks before the House of Commons Standing Committee on Health – Study on Pharmacare

Posted on June 6, 2016

Thank you, Mr. Chair

I am Glenn Monteith, Vice President, Innovation and Health Sustainability, for Innovative Medicines Canada, the association representing Canada’s innovative pharmaceutical industry. With me is Brett Skinner, Executive Director of Health and Economic Policy at Innovative Medicines Canada.

Innovative Medicines Canada represents more than 50 innovative pharmaceutical companies. Our membership includes startups, through to well-established international pharmaceutical companies. Our association advocates for policies that support a strong and robust life sciences economy in Canada and that ensure access to innovative medicines for Canadian patients.

Our sector is an important partner in Canada’s healthcare system. We interact every day with public and private health plans. In addition, we are at the table at pCPA as a trusted partner in the sustainability of Canada’s health care system.

This sustainability is fundamental to Canadians.

As a principle, we believe all Canadians should have fair, equitable and affordable access to the medicines they need when they need them. We are therefore pleased to be here to speak on the topic of pharmacare.

I want to begin with some preliminary facts about the role of our member companies within Canada’s current health care system.

  • Spending on patented medicines has declined from 8.4% to 6.4% of total health care spending in Canada between 2004 and 2014.
  • According to the PMPRB’s most recent data, in 2014 the prices of patented medicines in Canada were on average 13% lower than median international prices and 31% below average international prices at market exchange rates (19% below median prices and 45% below average prices at Purchasing Power Parities.)
  • Adjusted for inflation, per capita spending on patented medicines was lower in 2014 than it was in 2003.
    For 25 of 27 years under PMPRB regulation, price increases were less than the Consumer Price Index (CPI). What that means is that medicines have become more affordable over time, relative to inflation.
  • According to the PMPRB’s Annual Report, in 2014 Canada actually ranked 3rd of 8 countries in a comparison of average prices for patented medicines at Market Exchange Rates. If the same comparison is done using Purchasing Power Parities, Canada ranks 4th.

Rather than being a cost-driver in the health care system, innovative medicines contribute significantly to its sustainability, from avoided hospitalizations and shorter hospital stays, to fewer invasive surgical procedures and the avoidance of what can sometimes be a lifetime of chronic illness or disability.

Without access to medicines, these healthcare costs would be much greater and health outcomes poorer.

Innovative medicines also lead to reductions in health system costs. Here in Ontario, in 2012, we know that out of the 1.2 billion dollars that was spent on 6 classes of innovative medicines, this expense was offset by 2.4 billion dollars in savings and productivity gains.

Today in Canada, all hospital-administered medications are publicly funded. Outside of the hospital setting, the majority of Canadians have financial coverage for innovative medicines under a collection of private drug plans, designed for the working population, and public drug plans, run by provinces and territories and focused on vulnerable populations such as seniors and those on social security. This system works well for most Canadians.

If pharmacare is only about saving money, there is a belief that the only way to do this is by severely restricting access to innovative medicines. I do not believe Canadians want this.

However, we do believe a program (or programs) could be developed to focus on the following challenges in the current system:

  1. The Uninsured and Underinsured: Despite the strength of our system, there are Canadians who do not qualify for either public or private drug coverage or who qualify but still struggle financially to fill their prescriptions.
  2. Quality of Public Drug Plan Coverage: There is an issue with the number of drugs covered in public drug programs: In a study we conducted, we found that of the 121 new medicines approved by Health Canada from 2010 through 2014, only 37 percent received public reimbursement as of December 31, 2015, across provinces accounting for at least 80 percent of the eligible national public drug plan population, ranking Canada 18th of 20 countries.
  3. Time to Listing in Public Plans: Canadians in public plans also wait inordinately long to access innovative medicines. On average, it takes, 449 days to list a medicine in a public drug plan even after it has been approved by Health Canada, ranking Canada 15th out of 20 countries, in our comparative study.
  4. Data from another study suggests that coverage in Canada’s private drug plans is much better than in its public plans:, of the 464 new drugs approved for sale by Health Canada between 2004 to 2013, 89% (413) were covered by at least one private drug plan compared to 50% (231) that were covered by at least one public plan as of January 31, 2015.

Our industry has defined a set of principles to guide discussions on the development of a pharmacare program.

  1. Our first priority is patient access to necessary medicines to meet diverse patient needs.
  2. We believe that maintaining the prescriber-patient relationship and choice are both critical and fundamental rights.
  3. We must address the gaps in care and access to treatment for the uninsured and those who cannot afford it.
  4. We believe in direct public funding for those most in need.
  5. The economic and societal benefits of medicines and vaccines must be considered.
  6. Canada’s healthcare system must support innovation and the adoption of groundbreaking science and technologies to improve health outcomes.
  7. Any program must provide the best standard of care for all Canadians, not simply cost-containment driven solutions. Programs focused on cost-containment often mean reduced access to medicines – the exact opposite of what we would hope for Canadians.

I passionately believe we should build systems that will facilitate greater, more timely access to innovative medicines, improving health outcomes and securing the future of our Canadian healthcare system.

Thank you for your attention, and I look forward to your questions and comments.

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