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 Drugmakers have argued that new regulations should only apply to
newly approved drugs. The Health Canada clarification comes after
draft rules published in 2017 sowed confusion over how the
government would implement its plan.
The new features of the government's proposed regulations, which
would take into account cost-effectiveness of medicines and their
likely impact on government budgets, would be limited to new drugs,
Health Canada told Innovative Medicines Canada (IMC) and BIOTECanada,
the patented drug industry's main lobby groups, in a letter dated
April 8, 2019.
It added that other parts of the same draft regulation, changing the
list of countries Canadian officials use as a basis for comparison
when setting maximum prices, would apply to all drugs.
Health Canada described the contents of the letter in response to
questions, but Reuters has not seen the letter.
Canada, like governments around the world, is grappling with the
rising cost of drugs, particularly expensive new specialty medicines
for cancer and rare diseases. A new national prescription drug
program is one of Prime Minister Justin Trudeau's key promises ahead
of an October federal election, making tackling prices a priority.
"The overall intent of the regulatory proposal is prospective
application to new drugs," Health Canada said in a statement. "There
is some scope for this information to affect the prices of drugs
already in the marketplace," it added.
The department acknowledged that as originally written, the draft
regulation would have involved all prescription drugs, new and old,
but said that is not its intention.
Global drugmakers have campaigned against the Canadian plan, which
would change the way a little-known federal agency called the
Patented Medicine Prices Review Board decides whether high drug
prices are legal. Canada's patented drug prices are among the
highest in the world.
PLAN DELAYED
The regulations, originally expected to go into effect in January,
were delayed so the government could spend more time reviewing
comments. The plan could still be softened or even scrapped. But
earlier this month, Minister of Health Ginette Petitpas Taylor said
final regulations would be ready soon.
IMC, whose members include Merck & Co, Johnson & Johnson, Pfizer Inc
and others, was not satisfied by assurances in the letter.
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"We remain concerned that changes to the group of comparator
countries and other aspects of the amendments may be applied to both
new and existing products," the organization said in a statement.
Applying any new rules to already marketed drugs would create
"significant uncertainty" for companies whose business planning is
based on existing prices, it added.
The industry has said it believes the reforms duplicate processes
that already exist, and could hurt Canadians' access to new drugs as
well as spending on research and development.
"We remain committed to working with the government to find
alternative solutions that balance the need for more affordable
medicines with a competitive regulatory environment for health
research," IMC said.
Health Canada described the letter as "re-confirming" details it had
stated publicly before. Asked where those details had been
disclosed, a spokesman pointed to a cost-benefit analysis cited in
the 2017 draft regulations, and an expert review of that analysis
that was not made public until Reuters reported on it in February.
Patented drug sales in Canada were C$16.8 billion ($12.4 billion) in
2017, according to government data.
The original cost-benefit analysis estimated the new regulations
would cost drugmakers C$8.6 billion ($6.4 billion) over 10 years. As
an alternative to the proposed changes, drugmakers offered to
voluntarily give up C$8.6 billion in revenue over the same period,
Reuters reported in February.
Exactly how much the new rules will reduce prices depends on
implementation details that have not yet been decided.
Lower prices in Canada could have a ripple effect on drugmakers'
most lucrative market - the United States - given recent proposals
there to lower medical costs for U.S. consumers.
The United States is mulling basing drug prices paid under its
government Medicare health program on the cost of medicines in other
countries, including Canada. And some U.S. lawmakers and states are
looking into allowing importation of less expensive prescription
drugs from Canada.
(Reporting by Allison Martell; Editing by Denny Thomas and Bill
Berkrot)
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