Former Health minister Jane Philpott introduced the government’s drug price reform agenda on May 16, 2017, but none of it has been implemented yet.Cole Burston/The Globe and Mail
To say that Ottawa’s reforms to the regulation of drug pricing are delayed is a bit like saying the Titanic’s journey to New York is running behind schedule.
The federal government launched its once-ambitious attempt to rein in drug pricing in 2017. That package soon crashed into industry opposition and has now sunk to the depths of the Liberals’ policy agenda.
The federal government still has a chance to embark on a rescue mission, but it will have to do so by rebuilding what remains of the pricing regulator and then stepping back to let it do its job.
The latest examination of the disaster came from the House of Commons health committee, which tabled a long-awaited report last week. It came after members of Parliament heard testimony last year from Health Minister Jean-Yves Duclos and departed members of the Patented Medicine Prices Review Board (PMPRB), which is the federal body that oversees drug pricing.
Witnesses described tension that boiled over at the regulator in 2022 and 2023 as it attempted to institute a watered-down package of pricing reforms.
Those reforms included a change to which countries Canada compared its drug prices, dropping the United States and Switzerland, which have the most expensive prices in the world. (Canada is No. 3.)
That package was far less ambitious than the one first proposed by the Liberals years earlier. That had been whittled down by opposition from the pharmaceutical industry.
The tactics from pharmaceutical companies included aggressive lobbying campaigns, a mostly successful court challenge and the threat of withholding life-saving drugs from Canadians, including COVID-19 vaccines and one to treat cystic fibrosis patients.
The breaking point for some members of the PMPRB came in late 2022. As the regulator was preparing to wrap up yet one more round of consultations to bring the new measures into force (they had been announced that April), Mr. Duclos wrote to request the work be paused to allow industry even more time to “understand fully how the new guidelines will be implemented.”
In the weeks that followed, two members of the PMPRB’s expert board quit, as did its long-time executive director. The director and one board member resigned because of what they said was undue industry influence; the other board member left because they said the industry was not consulted enough.
All agreed the situation was dysfunctional.
Last week’s committee report recommends clear protocols for communication between the minister and the regulator to prevent undue political influence. And it recommends the government review its interactions with the pharmaceutical industry. All should be good for bolstering the PMPRB’s independence.
But where the report stops short and does not make the most obvious and important recommendation: to get on with the job of controlling drug costs.
Then-minister Jane Philpott introduced the government’s reform agenda seven years ago this week, on May 16, 2017. None of it has been implemented yet. The drama at the PMPRB ensured that even the weakened reform measures announced in the spring of 2022 have yet to be enacted.
Meanwhile, drug prices continue to rise. The Canadian Institute for Health Information reported last year that public health insurance plans spent $17-billion on drugs in 2022, up 6.4 per cent from the year before. (Public health plans make up around 40 per cent of the market for drugs, with the rest coming from private plans or patients paying out of pocket.)
A quarter of the new public spending in 2022 was just for Trikafta, the cystic fibrosis drug that became a bargaining chip in the price-reform battle. It has proven to significantly improve the health of patients, at a cost of $300,000 per person per year. But according to an estimate in a research paper, it costs only about US$6,000 to manufacture one person’s annual supply.
As Canada’s population ages, drug spending will continue to go up. And that’s not even including the increasing public spending on drugs that will come from the new pharmacare plan, estimated to start at $1.5-billion over five years.
If the government is serious about broadening access to medicine, it must start by tackling the price of drugs.
Editor’s note: An earlier version of this editorial incorrectly reported the estimated cost of the new national pharmacare plan as $1.5-billion a year. This version has been corrected.