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 Those industry offers did not impress federal officials, coming last
year as Canada prepared to expand the powers of a little-known
federal watchdog called the Patented Medicine Prices Review Board (PMPRB)
to reduce the cost of prescription drugs.
The government proposals would change the countries Canada compares
its prices to, dropping the United States where they are highest,
and set a formula to assess cost-effectiveness of medicines.
Announced in 2017, the new rules were scheduled to come into effect
last month but have been delayed as the government reviews feedback,
which has some wondering if they will ever be implemented.
The delay is a setback for supporters of the changes. But documents
detailing counter offers from lobby groups Innovative Medicines
Canada and BIOTECanada show an industry struggling to win over
federal officials.
Unlike other countries with universal healthcare, Canada's
government-funded healthcare system does not cover prescription
drugs. Most Canadians rely on an expensive patchwork of public and
private insurance plans for that. Among industrialized nations, only
the United States and Switzerland spend more on prescriptions per
capita.
Declan Hamill, a vice president at Innovative Medicines Canada, said
the proposed regulations go too far and could hurt patient access to
new drugs in Canada. But his group recognizes that the Canadian
government wants to make drugs more affordable, he said.
"We'd like to help the government out with that, and we've been
trying to have discussions with them," Hamill said.
Lower prices in Canada could eventually hit drugmakers in the most
lucrative U.S. market, as Washington evaluates a proposal to base
drug prices paid under the government's Medicare program on the cost
of medicines in other developed nations, including Canada.
Global drugmakers, including Johnson & Johnson, Merck & Co, Amgen
Inc and others, have argued against the Canadian proposal. They
referred questions back to Innovative Medicines Canada.
'WOULD NOT ACHIEVE THE GOAL'
With major drugmakers united in their condemnation of proposed
regulations to rein in prices, Health Canada hired former Bank of
Canada governor David Dodge and health economist Åke Blomqvist to
assess the government proposal. Their review, completed in August
2018, broadly endorsed the government's plan, documents seen by
Reuters showed.
Prime Minister Justin Trudeau's senior ministers will eventually
decide how to proceed. PMPRB Executive Director Douglas Clark told
Reuters the new regime could be running by early 2020.
"People have a tendency to presume that the sky is falling," Clark
said. "I think it's a little early for people to panic and lament
the demise of this policy initiative."
Health Canada said the industry's offers do not address drug price
problems created by outdated rules.
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"The non-regulatory counter-proposals that Innovative Medicines
Canada and BIOTECanada jointly submitted to the government would not
achieve the goal of ensuring appropriate consumer protection in
these circumstances," the ministry said in an emailed statement.
One offer was to "secure a price reduction target of C$8.6 billion"
in net present value terms, according to a letter from officials
seen by Reuters.
Hamill said the C$8.6 billion figure was borrowed from a government
estimate of how much the PMPRB reforms would reduce revenue and
would have been spread over 10 years. He did not say exactly how it
would have worked. Total patented medicine sales were C$16.8 billion
($12.8 billion) in 2017, according to the PMPRB.
Health Canada also rejected an offer to freeze prescription drug
prices, saying it would not meet its objective of lowering prices.
Health Canada said the industry had also committed to improving
access for patients with rare diseases, but that proposal would not
help those who have drug plans.
Meanwhile, ahead of a fall election, Trudeau's government is
preparing to announce a limited expansion of the nation's universal
healthcare system to cover part of the cost of prescription
medicines, as drug plans grapple with the extremely high cost of
newer specialty drugs.
'WE DON'T WANT TO SHUT THAT DOOR'
The PMPRB caps prices of drugs still under patent protection. If new
regulations are adopted, it would change the list of countries whose
drug pricing it uses to decide whether costs are excessive, dropping
the United States and adding countries with lower prices.
The regulator would also consider for the first time a type of
value-based pricing, measuring how cost-effective drugs are in terms
of quality-adjusted life years, and force drug companies to
privately disclose some confidential discounts.
It is not entirely clear how the PMPRB would use its new powers. In
documents posted online, the agency said it could apply new rules to
drugs already on the market. But Health Canada said the regime would
not apply to those.
Andrew Casey, president of BIOTECanada, would like "a more rigorous
sit-down" with the government.
"I fear the consequences when you do something without really
working with industry," he said. "We don't want to shut that door."
(Additional reporting by Fergal Smith in Toronto; editing by Denny
Thomas and Bill Berkrot)
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