New Regulations for Medicines are Arbitrary and Dangerous
Imagine being asked to play baseball but the umpire could change the rules at any time for any reason.
Would you play?
As long as you trust the umpire to be fair and reasonable, you might, and it could be a field of dreams. But if the umpire is unpredictable, the scale tips.
That’s the situation being faced now by innovative research companies trying to bring their latest medicines and vaccines to Canada. The federal drug price regulator has become that offside umpire, ready to tear up the rulebook of predictability, reasonableness, and fairness to ensure its vision of the game is the one played. Even the Federal Court of Appeal unanimously ruled recently that the federal regulator – the Patented Medicine Prices Review Board or PMPRB – is offside.¹ It’s impossible to forecast how the rules will be applied to new medicines and vaccines, and Canadians are paying the price.
In this amazingly promising era of new treatments for many serious diseases, what should be a field of dreams for Canadians going to bat against major illness threatens to become a medical nightmare. Canadians lack access to new treatments for cutting-edge antibiotics, cancer medicines and rare disease treatments. A survey of sector leaders earlier this year showed that research and pharmaceutical company jobs are leaving the country, just as we realized during the pandemic how valuable this industry is.²
Canada’s federal drug pricing regulator doesn’t appear to care about any of that. It is fixated on ensuring Canada pays less for medicines and vaccines than countries such as Mexico and Chile,³ rather than on making sure Canadians get timely access to the latest and best treatments, ensuring adequate supply and timely delivery of medicines. It is determined to change the rules, demanding excessive price cuts for new and existing medicines.
The new rules are scheduled to come into effect on January 1, 2022. The goal is to cut the prices by around 20 per cent for many treatments and impose greater price decreases of over 50 per cent for some of the most innovative and specialty medicines. There is no rationale for this objective, especially when we know that Canadian drug prices are already aligned with other countries. A recent study shows that Canada’s drug pricing is right in the middle of 13 other comparable countries.⁴
In fact, patented medicines account for less than seven percent of total healthcare spending in Canada,⁵ a fraction of what we spend on doctors and other health professionals, hospitals and other main health spending categories. Total drug spending in Canada as a percentage of total healthcare costs is already in line with other countries,⁶ right in the middle of the pack for developed nations – exactly where the federal government claims it wants Canada to be.
“Canadians will feel the impact of the new price regulations with surprise, even in the short term, because our whole drug distribution system is already strained with many restrictions and price cuts meaning lower revenues for wholesalers, distributors and pharmacies,” said Dr. Alan Low, Executive Director of the MedAccess BC, a coalition of 30 chronic disease organizations and other groups representing 2 million constituents. “Since the income of the drug distribution system is set as a percentage of the prices of medicines, a drop in price will likely mean a sudden change, likely resulting in major cutbacks to inventories, delivery frequency and service levels at pharmacies very quickly as they struggle to keep up with rising costs of wages and expenses.”
A C.A.R.P. Survey released earlier this year garnered over 3,600 responses from members.⁷ Most older Canadians who responded (81%) believe ensuring rapid access to medicines and vaccines is more important than lowering their cost. The same proportion of respondents believe the federal government should reconsider the new drug pricing regulations to ensure they don’t block or delay access to new medicines and vaccines. We shouldn’t be worsening our access to existing treatments either.
The pandemic highlighted the importance of medicines and vaccines for Canadians. The federal government recognized this by lifting its own pricing restrictions for COVID vaccines and treatments to ensure timely access. However, forced price cuts continue to threaten access to other treatments and vaccines.
As the film said, “If you build it, they will come.” That’s still possible, but not if the federal government is turning the “field of dreams” of healthcare progress into a system with no clear rules.
To learn more and take action, visit WhenYourTimeComes.ca
¹ Alexion Pharmaceuticals Inc. v. Canada (Attorney General), FCA 2021;
² Research Etc. Health Canada Pricing Reform Research Report, January 2021;
³ PMPRB Notice and Comment, July 15, 2021 and Annual Report 2019;
⁴ Canadian Health Policy, Prices for Patented Medicines in Canada and 13 Other Countries, August 2021;
⁵ Canadian Health Policy, Patented Medicines Expenditure in Canada 1990-2019, June 2021;
⁶ OECD, Pharmaceutical Spending Report, 2020;
⁷ C.A.R.P. Survey 2021