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

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Last month, as delivery delays plagued Canada’s COVID-19 vaccination efforts, Prime Minister Justin Trudeau was asked if he had contacted the chief executive officer of Pfizer Inc. to express his dismay or offer solutions to speed up supplies. His non-answer spoke volumes about his own government’s improvisation concerning a file that should be its all-consuming priority.

Mr. Trudeau put out a tweet the following week, saying he had (finally) spoken with Pfizer CEO Albert Bourla, though the PM only repeated his line about the company’s commitment to delivering four million doses of the COVID-19 vaccine by the end of March. That will still leave Canada well behind several peer countries in inoculating its citizens. Pfizer is obviously not going out of its way to extricate Mr. Trudeau from a political problem of his own making.

Why would it? Even before the pandemic struck, relations between Ottawa and the global pharmaceutical industry had reached new lows for any Canadian government as the Liberals pressed ahead with cumbersome new patented drug pricing regulations. Twice in 2018, and again in 2019 and early 2020, the global CEOs of more than two dozen major multinational pharmaceutical companies wrote to Mr. Trudeau requesting a face-to-face meeting to discuss the new regulations. The CEOs described meetings with heads of government as “normal practice” in most countries in which they operate. Each time, the PMO ignored their entreaties.

This is no way to treat the leaders of any major industry, much less one that provides highly skilled STEM jobs to thousands of Canadians and develops drugs that save lives and reduce suffering. They deserved Mr. Trudeau’s time of day. They did not even get a polite refusal.

In pushing ahead with new patented drug price regulations without so much as hearing the industry out, the Trudeau government is risking the health of millions of Canadians who need access to new and better drugs. Canada has a much slower approval process for new drugs than most developed countries as authorities here can take years to weigh the cost-effectiveness of new treatments, compared with only weeks or months in the United States.

Yes, some prescription drugs come with eye-popping price tags, earning Big Pharma the ire of those who accuse it of earning exorbitant profits. But the profit motive has proved its worth in ensuring the risk-taking and innovation that leads to life-changing new discoveries. That is how capitalism works. For every investment in new drugs that pays off, several more do not.

One of the main reasons for the lag in introducing new drugs here is the time it takes for Canada’s Patented Medicine Prices Review Board, or PMPRB, to determine the upper limit that companies can charge for their treatments. The new regulations, which are set to take effect on July 1 after being twice delayed, will make the approval process even longer.

The drug industry says the rules will lead companies to hold off launching new drugs in Canada until development costs are recouped in countries that provide more favourable treatment to the industry. A reduction in pharmaceutical research and development conducted in Canada is also expected, as companies shift investment to friendlier jurisdictions.

In November, the head of the PMPRB, Douglas Clark, dismissed the industry’s concerns as “just the nature of the game” in testimony before the House of Commons standing committee on health, saying: “You can consult until the cows come home, but you’re never going to get industry to back changes to a regulatory regime that are going to result in less revenue for them.”

The adversarial relationship between the PMPRB and the industry it regulates seems to suit the Trudeau government, which is seeking to wring billions of dollars in savings out of prescription drug costs in order to fund a national pharmacare program. But neither the PMPRB nor Health Canada has done its homework and the new price regulations could deprive Canadians of access to life-saving drugs and gut a high-tech industry that provides more than 13,000 well-paying jobs across the country. The industry says it is willing to invest more in Canadian-based research, provided it is treated fairly by Ottawa.

Research has shown that bulk purchasing and centralized procurement remain the most effective ways to reduce prescription-drug costs. The pan-Canadian Pharmaceutical Alliance, which negotiates bulk-purchase prices on behalf of provincial and federal drug plans, has helped. But its membership should be expanded to include private insurance companies to maximize economies of scale before Ottawa relies any further on the heavy hand of price regulation, which could lead to unintended consequences no one wants.

Mr. Trudeau should at least sit down with the global drug-company executives. It would not hurt him to be on speaking terms with people whose help he could really use right now.

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