Is Ottawa prepared to call Big Pharma’s bluff?

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When officials at the Patented Medicine Prices Review Board were brainstorming a while back about how to sell the Trudeau government’s proposed new drug-price regulations, they could hardly contain their contempt for the pharmaceutical companies they counted as adversaries.

“Industry has been sucking Canada for decades,” Tanya Potashnik, the PMPRB’s director of policy and economic analysis, wrote in a late 2019 e-mail to colleagues recently obtained through an Access to Information request by Conservative MP Tom Kmiec.

The e-mail chain and other PMPRB documents posted to social media in recent days by Mr. Kmiec portray a regulatory agency that appears bent on sticking it to Big Pharma and obsessed with discrediting the board’s perceived adversaries, including some patient advocates.

Why is Justin Trudeau cutting off his nose to spite Big Pharma?

One such advocate was so incensed by what he saw that he wrote last week to MPs on the House of Commons health committee studying the drug-price proposals to express his indignation: “The PMPRB is a quasi-judicial body that needs to be impartial and objective,” wrote Chris MacLeod, chair of the Canadian Cystic Fibrosis Treatment Society. “It is not the voice to be challenging patient groups. Its role is to administer regulations that are developed and promulgated by government, not to undertake lobbying and advocacy strategies.”

With only days to go before the new regulations are to take effect, the battle has reached a climax as opponents of the reforms seek to derail Ottawa’s plan to lower the maximum price that drug companies can charge for new medicines. The pharmaceutical industry and advocacy groups for sufferers of rare diseases warn the new rules will lead to fewer new drug launches and less research and development in this country. Supporters of the reforms accuse the industry of blowing smoke in order to protect juicy profit margins. But is Ottawa really prepared to call Big Pharma’s bluff?

The Trudeau government unveiled the proposed rules in 2019, just as it began laying the groundwork for the national pharmacare program that was part of its election platform that year. Forcing pharmaceutical companies to slash prices for prescription drugs was a critical part of the plan to reduce the tab for pharmacare. But critics accused the government of failing to conduct a thorough analysis of the potential consequences of the new price regulations.

The COVID-19 pandemic drove home their concerns. Burdensome regulations and an unattractive investment climate had already led multinational drug companies to reduce their activities in this country in the two decades leading up to the pandemic. Canada has found itself entirely reliant on COVID-19 vaccines manufactured abroad. And the hostile relationship between Big Pharma and the Trudeau government was one reason Ottawa was in such a weak bargaining position as it negotiated vaccine deliveries early this year. It has taken a lot grovelling since then to change that.

The pandemic led Ottawa to twice defer implementation of the new drug price regulations, which are now slated to take effect on July 1. But the absence from April’s federal budget of any firm commitment to implementing universal pharmacare suggested the Trudeau government was having second thoughts about the new pricing rules. The budget included $2.2-billion in funding to boost Canada’s life-sciences sector, a goal Innovation Minister François-Philippe Champagne has made a top priority. He has also made it a mission to rebuild bridges with Big Pharma.

Mr. Champagne is from Quebec, whose government has historically relied on the pharmaceutical industry as a major driver of R&D in the province. Quebec’s provincial drug plan has also traditionally favoured brand-name drugs over generics.

The Quebec government has joined Big Pharma in challenging Ottawa’s new rules in court, arguing that the federal government cannot use its power over patent law to regulate drug prices. “Federal jurisdiction over patents cannot be used as a Trojan horse to regulate a particular industry or to interfere with the management of public services under provincial jurisdiction,” the province’s lawyers wrote in a May 14 submission to the Quebec Court of Appeal, where the case is being heard.

Ontario Health Minister Christine Elliott also called on Ottawa to back off. “As the pandemic has helped us all identify gaps in Canada’s biomanufacturing sector, we are even more concerned that [the new price regulations] may be at cross purposes with our collective efforts to secure domestic capacity in the face of potential future pandemic threats,” Ms. Elliott wrote in a May 31 letter to Mr. Champagne and federal Health Minister Patty Hajdu, asking them to “consider pausing” the new regulations.

Whatever the outcome of this battle, relations between the pharmaceutical industry and the agency that regulates drug prices will have been sufficiently poisoned to warrant an overhaul at the PMPRB. The credibility of Canada’s public service hinges on the neutrality and professionalism of the bureaucrats in its employ. The folks at the PMPRB obviously never got that memo.

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