HEAL Committee Meeting

STANDING COMMITTEE ON HEALTH

COMITÉ PERMANENT DE LA SANTÉ

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 28, 1998

• 0904

[English]

The Vice-Chair (Ms. Elinor Caplan (Thornhill, Lib.)): I call this meeting to order.

I'd like to welcome an old friend and our presenters this morning.

• 0905

I'd ask that you begin your presentation. I'm sure other members will come, but we don't want to waste your time. Everything that you say, of course, will be on the record. So please begin now.

Dr. Robert Goldwin Elgie (Chairperson, Patented Medicine Prices Review Board): I can't imagine anything being a waste of time at this committee level.

It's nice to see you again, Elinor. We may have sat on opposite sides of the House, but I'm pleased we're still friends and always were.

I welcome the opportunity to appear before the committee today. With me today are Monsieur Réal Sureau, who's vice-chair of the board; Dr. Judith Glennie, who's a member of the board; and the executive director, Mr. Wayne Critchley.

At the conclusion of our presentation I'd be pleased to answer any questions that committee members may wish to raise.

This represents the second time I've been formally invited to appear before this committee. In fact the timing is very appropriate. In recent months the board has been involved in a major consultative process with our stakeholders, and this has included public information sessions in every province and territory throughout the country. It has provided our board members with a uniquely invaluable opportunity to hear firsthand about the issues and concerns of consumers and other stakeholders.

In a few minutes I'd like to speak further about these consultations and about their potential impact on the work and future direction of our board. However, before doing so, I feel it would be useful for me to provide a bit of context, starting with a brief overview of the mandate of the board, as this committee suggested.

The board was created in 1987 as an independent quasi-judicial agency. Its fundamental role is to protect Canadian consumers by ensuring that the prices charged by manufacturers for their patented medicines are not excessive. The board's mandate extends to all patented drugs, whether or not they're sold by prescription and whether or not they have a notice of compliance, so long as they're patented.

In addition to this regulatory authority, the board is charged with gathering data on prices and trends in the industry. It reports this information annually to Parliament, along with information on the research and development expenditures by the patent-protected pharmaceutical manufacturers.

In fulfilling its role and mandate, the board operates according to a clear set of detailed price guidelines developed through public consultations and accessible to all. These guidelines are based on factors set out in the Patent Act.

The board looks at changes in the consumer price index, the price of other drugs that treat the same disease, and the prices of drugs in specific comparator countries, among other factors. They limit price increases for existing patented drugs to the consumer price index and they limit the introductory prices of most new drugs so that the cost of therapy is no greater than the cost of drugs currently on the market that treat the same disease.

In the case of breakthrough and substantial-improvement drugs, the guidelines ensure that the price in Canada does not exceed the median of prices in seven other industrialized countries, as set out in the patented medicine regulations. In addition, as an overarching guideline, the price of a patented drug in Canada cannot be the highest relative to those in other countries.

These guidelines were developed in consultation with all stakeholders, consumers, provincial ministers of health, various health care associations, and the pharmaceutical industry. They are critical to the operations of the board and to our ability to protect consumers from excessive prices. But the board must also be prepared to take action as necessary to ensure compliance with those guidelines. Since 1987 we have obtained more than 100 undertakings from patentees to lower their prices.

Other key roles for the board include information-gathering and analysis on drug price trends and on research and development expenditures. In this context, we've endeavoured to ensure that the results of the work we do are disseminated as widely as possible. Over the years, copies of our annual reports, outlook documents, studies, and reports have been made available and provided to our different stakeholders. We are looking at new and more effective means of communicating, such as our recently announced newsletter, our recently announced web site, and a toll-free telephone line, to be more accessible and to share current information on drug prices and issues related to our mandate.

• 0910

Last year the Standing Committee on Industry reviewed the drug patent legislation, Bill C-91. Although the main issues of that review were the so-called linkage regulations, patent terms, pharmacare, and related matters, the mandate and activities of the board were also examined and debated.

Such an examination and debate is healthy. It's essential, however, for some distinctions to be drawn in terms of the issues raised during last year's review relative to the mandate of the board. The board is not responsible for issues such as patent terms, linkage regulations, other aspects of the debates between the brand name and generic sectors of the drug industry, or the pharmacare issue.

The board's mandate flows directly from policy established by Parliament through the legislation. It's focused by that statute on protecting consumer interests by ensuring that prices for patented drugs are not excessive.

In its report, the standing committee noted that witnesses tended to give only limited recognition of the board's success to date in controlling prices. Consequently, the committee, in its report, recommended that the government consider changes to strengthen the mandate of the board.

In addition, the committee recommended that the board undertake to consult with consumers, health care professionals, other experts, and the provinces to assess our current statistical reporting and determine what other information might be gathered and shared with the public.

In the wake of the committee report, I initiated an internal review focusing on the board's role, function, and methods. A major element of this review involved work by my associate, Dr. Judith Glennie, and members of the staff who were seeking advice on an informal basis from some of our stakeholders who traditionally had not been closely involved with the work of the board.

The purpose of this advice-gathering was to determine how the board might enhance its consultation process, and the results of that initiative were used to help shape the consultation process that has followed during the past year.

In November 1997 we commenced a public consultation process through the publication of a discussion paper. The first step in this process centred on the role, function, and methods of the board, and on questions relating to the board's role in disseminating information, strengthening its pubic accountability, as well as price guidelines and price review methodology.

From the start, our goal in undertaking these consultations was to ensure that the process would be as broad and inclusive as possible. Toward this end, the paper was circulated to people on our regular mailing list, which is approximately 900 recipients. As other parties were identified or came forward to request a copy, we eventually reached the point of having sent out about 2,000 copies of the paper into circulation.

We also recognized the importance of ensuring the opportunity for face-to-face contact to encourage a two-way communication process. So during February and March, the board held a series of public information sessions across Canada. These sessions were preceded by notifying people on our mailing list, media advisories, and notices in major regional newspapers, which were all designed to encourage public involvement in the review. A session was held in every province and territory.

In total, some 13 meetings took place, which were conducted by board members and staff. I'm pleased to report that close to 300 Canadians attended these public meetings.

To further support this consultative process, we invited written submissions to be filed. The board has received 58 substantive submissions from interested organizations and individuals. In total, these submissions run to more than several hundred pages of text.

In two days' time, the board will be holding a policy hearing at which 24 organizations or individuals will make presentations to the board in support of those written submissions. The purpose of this hearing is to ensure that interested stakeholders are afforded every opportunity to clarify and, as appropriate, elaborate on the information contained in their submissions. This is an important next step in the consultation process to ensure that the board is accessible, seen to be accessible, and open as possible in its relations with consumers and other stakeholders.

We invested a substantial amount of time and effort into reviewing the way we do business. We will carefully re-examine how we interact with Canadians. Through this process, we want to identify ways in which we might build upon what has already been accomplished in order that we might be even more effective. We are determined to be as accountable and responsive as possible to Canadians and to Parliament.

• 0915

As I've indicated, this process is moving forward, and it's our intention to produce a report in late summer that may set out revised or new policy proposals or raise other matters that require further consultation depending on the feedback and analysis of our submissions. In the meantime, we continue to carry out the job for which we were established, namely, limiting the prices charged by drug manufacturers for patented medicines to ensure that these are not excessive.

At the end of May, the board's tenth annual report for the calendar year 1997 will be submitted to the minister of Health. This report will cover the review of prices on new patented drugs in 1997, as well as the other activities of the board last year.

In 1996, the last year for which complete information is published, the board reported that the prices of patented drugs declined by 2.1% from that of the previous year while the CPI increased by 1.6% over the same period. These overall price trends for patented drugs compare favourably to the situation prior to 1987, before the creation of this board, when drug prices were increasing at a rate much faster than the CPI.

By way of international comparison, there has been a 30% decline since 1987 in Canadian prices for patented medicines relative to foreign prices. When the board was established, Canadian prices for patented drugs were 23% above the median of the foreign prices. This calculation is based on a comparison with the basket of countries set out in the patented medicines regulations. In fact, at that time, Canadian prices were higher than all of those comparative countries, with the exception of the United States.

If we fast-forward to 1996, we see that the situation has changed dramatically. Canada's prices, almost a decade after the creation of the board, stood at 10% below the median. We've dropped now to the middle of the pack.

The impact of the board's regulatory activities has been documented in reports and studies that have been published and made available to the public. We have achieved these important results in the fulfilment of our mandate, which in combination with provincial measures, has resulted in substantial savings to Canadian consumers.

But echoing the testimony of many of the witnesses who appeared before the Standing Committee on Industry one year ago, and as we heard in our public sessions, Canadians remain concerned about the cost of drugs. They are concerned as well about the increases in expenditures on pharmaceutical products. They are concerned about having access to medically necessary drugs.

In 1996 Canadians spent some $10.8 billion on drugs, which represented 14.4% of the total health expenditures of $75.2 billion. That total drug bill of $10.8 billion is dividend between patented drugs and non-patented drugs. Non-patented drugs include both brand name and generic drugs.

Of the total health expenditure, patented product factory-gate sales, which is sales at the manufacturer, accounted for $3 billion, or 4%, of overall health expenditures. That is the portion of the market that comes under the board's jurisdiction. When converted to the retail level, patented product sales accounted for about $4.8 billion, or 6.4% of overall health expenditures.

It's also instructive to look at drug-related expenditures in the context of other major categories of expenditures. The percentage of expenditures for drugs in 1996 was the same as that for physicians, at 14.4%. For hospitals, the figure was 34.2%.

From the perspective of Canadian consumers, absorbing and making sense of the statistical data and trends surrounding drug prices and costs represents a daunting challenge. It's undoubtedly difficult for the public to reconcile the fact that while the board says prices are going down on average, the government and others say the costs are going up. Quite logically, this has given rise to public concern about the direction of this cost trend and the related implications for Canada's health care.

The board understands these concerns. Our expenditures are going up because as a society we are using more drugs and we are quick to switch from an existing cheaper drug to a more expensive one.

• 0920

The board is responsible for limiting the maximum prices charged by manufacturers of patented drugs, which represents 45% of total drug sales in Canada. We are committed to doing the best possible job operating within the context of our mandate and within the budget allocated to us. We work with provincial governments, Health Canada, and others in studying issues related to drug expenditures. We are an active member of the federal-provincial-territorial pricing task force established by federal, provincial, and territorial ministers of health two years ago.

Through our own current consultations, we are asking stakeholders to help us identify how we can add value within our mandate to our various functions and responsibilities. Where we can identify ways of improving our effectiveness, but remaining fair in our adjudicative process, we are doing so and we will continue to do so. This is what the standing committee has recommended and it's what Canadians expect.

We recognize the need to remain relevant to the needs of consumers and other stakeholders. That's the object of our current consultations. And we look forward to the results of this important process and to identifying ways of ensuring that the board may continue to serve the interests and meet the needs of Canadians.

Thanks very much. I'd be pleased to answer any questions you may have.

The Vice-Chair (Ms. Elinor Caplan): Thank you very much for a very interesting presentation.

I'm sure there are a lot of questions that members have. I'll start with Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you very much, Dr. Elgie and all the presenters this morning, for granting this request from the committee to include us in your consultation process. Some of us thought it was only appropriate that given your cross-country tour and consultations in every major centre of this country, your final report should include some input feedback questions from committee members. I wish there were more.

I know there are other big issues that are taking up today's agenda, but I think this is a very important issue for the health committee as we deal with the rising costs in the health care system, of which of course high drug costs are a key factor.

I have a whole series of questions, and I assume you'll allow me at least five minutes to start and then we'll go back and forth. What happened yesterday was that before I got started time was up.

The Vice-Chair (Ms. Elinor Caplan): I thought we would rotate approximately five minutes each.

Ms. Judy Wasylycia-Leis: Okay.

Since I've used up a bit of my time already, let me use my first block of time just to talk about the purpose of your consultations and concerns that I have certainly heard raised pertaining to the agenda you're operating from.

It seems to me, in having glanced through the report that came out of the Bill C-91 hearings last spring, both the draft report and the final report, because I think both have to be considered in terms of acknowledging the positions of many Canadians, that what was really required was a major review of the PMPRB, not just within the existing mandate, as you've described, but to go beyond, actually to review the mandate. Should it be expanded? How is it actually operating? Was there transparency, public scrutiny and public accountability?

Over and over again, and you've no doubt heard this on the road as well, concerns have been raised about the mandate. It seems to me from the document that you've used as part of the consultation process, and based on your comments today, that you've limited your consultation process in terms of the existing mandate. I know that Parliament is the body that determines what the mandate of the PMPRB is, but my question is, given the tenor of the Bill C-91 hearings, why didn't you decide to go beyond your existing mandate and explore some of these questions that have been raised by many organizations and many individuals over the last couple of years?

• 0925

Dr. Robert Elgie: I think that is an important question, and it goes to the very heart of what the obligations and the duties of this board are and what the obligations and the duties of this Parliament are. As you quite properly say, there were many who appeared and had many suggestions and complaints to make. By and large, most or many of them were about policy in this area, policy as set out in the Patent Act and the regulations that flowed from it.

The position the former members of the board take, and which unless I'm persuaded otherwise I would take, is that our job is to fulfil the mandate given to us by Parliament in the broadest and fairest way we can, recognizing that we do have an overriding obligation to protect consumers. I think if you read the statute you'll see that the government very clearly says when the board may consider matters and give advice to the government. That section says that the minister may, on any occasion, ask the board to look into any matter and provide a report to it.

I'm aware there are other statutes that give other boards wider powers to hold hearings on issues and make recommendations to government, but by and large they're not quasi-judicial agencies that walk a very narrow line. That's not to say there may not be members who have opinions and views on these things, but if there are, then we like to think the federal-provincial-territorial task force that's looking at a number of issues related to pricing, utilization, prescription practices and other things...that any views there may be will flow from evidence that flows from the studies of those committees and not just from opinions that persons may have, which in my view go beyond the mandate given to us by the statute.

Ms. Judy Wasylycia-Leis: Given that you've acknowledged this, perhaps what I'm asking—

The Vice-Chair (Ms. Elinor Caplan): Could you hold off until the next round? That was just about five minutes.

Mr. Myers first and then Mr. Volpe.

Mr. Lynn Myers (Waterloo—Wellington, Lib.): Thank you, Madam Chair.

Good morning. I noted your report will be out in late summer, I believe you said, or maybe around that time. I think you've already had some public hearings to date.

Dr. Robert Elgie: Yes.

Mr. Lynn Myers: What are some of the main comments and issues coming out? Are people giving you some feedback as to recommendations or what should happen, what should change?

Dr. Robert Elgie: As I said to Mrs. Wasylycia-Leis, many of the comments that are being made by those who would like to see the system changed from their perspective have been to toughen up the regulations, broaden the mandate and change the package of comparator countries that are used. On the other hand, we have those who say we are too strict and that we should be more generous and more relaxed with the guidelines that deal with the introduction of category two or breakthrough drugs. There are some who say that we are difficult to deal with if there's a pricing disagreement.

So on the one hand there are complaints about the fact that we may be too tough on certain things, and from the other side there are those who say that our mandate, generally, should be broadened, including moving to.... But interestingly enough, even those who are critical of some aspects of the board always suggest that we should be asked to include generic drugs and non-patented drugs. Even if they're critical, they still say that.

Some persons, particularly some ministers who appeared before the standing committee last year, suggested that single-source drugs, as a very minimum, should be part of the mandate of this board. Those are matters that will have to be considered, and I'm certain that the Minister of Health is looking at them through his federal-provincial pricing task force.

In terms of those who may have come up with specific things we might do within our mandate, there were a few of those, and some of them relate to issues we're looking at internally. For example, is the international median for breakthrough drugs an appropriate one today? Is the role that Canada shall not have the highest prices in the world the appropriate one today? What does one do in circumstances where there are only one or two countries in the group of comparator countries that we're to look at? How do you seek the median in those circumstances, and how do you achieve in the long run fairness in the system, having in mind the intent of the act, which was to look at those countries and try to put us in some sense where the government thought we should be? Those are the kinds of issues we're looking at, along with others.

• 0930

Mr. Lynn Myers: Madam Chair, on the non-patent issue, are there consultations going on with respect to you as a board becoming involved with non-patent?

Dr. Robert Elgie: We are not involved specifically, except for the role we've been asked to play in the federal-provincial-territorial task force of the Minister of Health. They are looking at those issues, including single-source drugs, as they're being examined through the provincial drug plans—particularly Ontario and B.C., and other provinces are being included in those considerations—as well as multiple-source drugs.

Mr. Lynn Myers: You mentioned pricing. How did you come up with what is excessive pricing? I think there's another term too—maximum non-excessive price. Where is that guideline given? Is that your own guideline? How do you determine what those are?

Dr. Robert Elgie: The statute specifically advises and instructs the board that its role is to make certain that prices are not excessive, and in making that determination it sets out the variety of things the board shall consider.

First, it shall consider the consumer price index. We do that in terms of the pricing of existing drugs by saying that existing drugs may not increase at more than the consumer price index. In fact, they've increased by less than half the consumer price index.

It also says you shall look at the price of other drugs that treat the same disease. So we look at those and we try to form a reasonable relationship with category one, and we try to form a therapeutic class comparison relationship with what's called a category three drug.

In terms of breakthrough drugs, the statute says that we shall look at the prices of drugs in certain foreign countries, and the regulations set out which foreign countries those are. They name the seven. Those are the things we look at to determine whether something is in excess of the guidelines the government has given us in the statute, and we have put that into price guidelines of our own.

Mr. Lynn Myers: Thank you.

The Vice-Chair (Ms. Elinor Caplan): Mr. Volpe.

Mr. Joseph Volpe (Eglinton—Lawrence, Lib.): I have a very brief question. Welcome back, Dr. Elgie. Thank you very much.

Dr. Robert Elgie: Thank you.

Mr. Joseph Volpe: You've brought reinforcements along this time. It's a much friendlier environment than the last time we met.

Dr. Robert Elgie: I always look on every occasion as a friendly environment.... I was going to say for intercourse, but that would be a dangerous comment to make.

Mr. Joseph Volpe: The last time we were in the same kind of environment it was an industry committee. The issues were related to cost, but they were also related to research and development.

Some of the issues don't come under the mandate under which you operate, but I noticed through your report that the amount of moneys or funds expended for basic research by the companies captured by your study is gradually declining. The trend has not been interrupted, and it's a downward trend. For this last reported year I think it's at around 22%.

First, to what do you attribute that, if anything? Is it a concern to the board? Second, what recommendations or suggestions would you have for a government that's concerned about research and development expenditures, specifically in the areas having to do with health and health care, including pharmaceuticals and other instruments used in an effort to maintain a healthy population?

Dr. Robert Elgie: Let us look for a moment at the research and development issue. Although it's true that as a package, basic science research and development has remained static or has declined slightly, the dollar numbers have gone up over the years. The dollar numbers have continued to increase, even though as a percentage of the whole package they've stabilized or gone down in recent years, as you say, and you're quite right.

One can only speculate on the reason for that, and you're as good at speculating as I am about whether research and development dollars that are into clinical trials and other activities are more fixed and permanent in the country, or whether basic science activities are more fixed and permanent in the country. Those are matters you'll have to consider.

• 0935

In terms of research and development internationally, you were provided with a report we did about a year ago that looked at research and development in seven comparative countries. It showed that Canada is tied with Italy at the bottom of the heap in terms of research and development to revenue. You, as members of Parliament, will have to take into consideration whether that means you should be looking at other policy changes.

Mr. Joseph Volpe: I'm glad you introduced that last comparison. While that report indicated that in absolute dollars or percentages we were tied with Italy at the bottom of the heap, in terms of breakthrough drugs being brought into the market as a result of the research and development done in comparative countries, we were first over the period covered, which I think was 20 years. Italy was 83rd. Since all comparisons have a particular value, and since you came up with the data for us, how do you interpret the kinds of results that one sees under that comparison—equivalent amounts, but obviously very poor results?

Dr. Robert Elgie: We're a much smaller market than the market in Italy. We're something like 2% of the global market in drug products.

Mr. Joseph Volpe: I was just referring to the two countries you mentioned.

Dr. Robert Elgie: I know. It's R and D to sales revenue, but that is in a smaller market. I suppose those who want to look at this from the perspective of why there aren't more breakthroughs in Canada.... There are some: photofrin in Vancouver Quadralogic Technologies is one example, and AZT in Montreal is another example. Some might say that in the past we have not had a thriving biotech industry, but it is now starting to grow and they would hope that we'll see more breakthroughs from them.

I really can't give you an answer other than that. We don't see many breakthroughs from the global multinationals in the country, but we certainly hope the biotech companies that are developing and increasing their activities will develop something that will be important to Canada and to the world.

The Vice-Chair (Ms. Elinor Caplan): Thank you, Mr. Volpe.

Before I move on, I would like to ask a question. I would like to know more about the consultation. I'm particularly interested in knowing whether the people you're meeting with are from stakeholder groups, consumers—how knowledgeable are the people who are coming forward? Are they real people, or people with vested interests?

Dr. Robert Elgie: It will be no surprise to you that persons with a special interest tend to have a greater interest in these processes, but that would be unfair to a number of seniors groups and others representing a broad range of the community who brought their views. I think it would also be unfair to a number of pharmacists, pharmaceutical groups and other groups that came out of interest in the topic, because they may be involved in one way or another. But by and large I would have to say that most of the people had a special interest in being here.

The Vice-Chair (Ms. Elinor Caplan): As part of the consultation—

Dr. Robert Elgie: The important message we wanted to give is that there's nothing secret going on. We're out in the streets ready to talk to people; we're publishing that we're going to be there, so if you have anything to say to us, come and say it.

The Vice-Chair (Ms. Elinor Caplan): Did you find the people who came had a realistic understanding of the role of the board? Were they surprised by the reports you gave on the trend with drug costs in Canada?

Dr. Robert Elgie: I don't think most of the people, except those who had a special interest in understanding, understood the functioning, role and methodologies of the board.

• 0940

I think the main concern of many of them was that drugs cost too much—it's that simple—and what are we going to do about it. They fail to see that this board acts at the provider level, whereas their concerns are with the purchasing level and whether or not the controls at the purchasing level, the buyers, might achieve at that end. I think they find it difficult to distinguish between the two.

The Vice-Chair (Ms. Elinor Caplan): Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: To return to the question of the purpose of the hearings and the broader issue of opening up the whole area of the mandate of the PMPRB, as you know, the Auditor General is investigating the PMPRB currently. I believe that investigation is the result of a number of concerns raised throughout the Bill C-91 hearings, concerns about how the framework is established in terms of setting introductory prices, concerns about “me too” drugs, concerns about links between the PMPRB and the Pharmaceutical Manufacturers Association of Canada, and concerns about PMPRB operating more in the interests of industry than of the public good.

I don't want to be contradicting myself, because I think the PMPRB needs to have its whole mandate on the table and public input included, but my question is about the timing of your consultation process, given the investigation by the Auditor General. Why did you choose to begin the consultations in the face of this Auditor General investigation? Given some of the concerns raised, would it not have made more sense for another body, an independent group, to actually review the mandate of the PMPRB?

Finally, given your earlier comments about the limits you have in terms of Parliament's mandate for the PMPRB, would it make sense for this health committee to take on the whole issue and have an independent review of the mandate and purpose of the PMPRB?

Dr. Robert Elgie: Going to your last question first, that will be a matter for this committee and this House to determine. It has nothing to do with any recommendations we may have.

Let's deal first with the issue of the Auditor General and the investigation he's carrying out. I made it very clear when we met with the auditor that he had our full cooperation, and he has confirmed to me in writing that they have had nothing but our full cooperation. That's been the message we've heard internally from the auditors from his office that are attending. There's nothing they're not learning about, no information they're not hearing about and no documents they're not seeing.

As to the timing of it all, I would hope that whenever the Auditor General examines any area of government, they don't see themselves as being in trusteeship and stop doing business.

We started a consideration of our role and the appropriateness and effectiveness of our role immediately after the Standing Committee on Industry issued its report. I called for an internal review, and Dr. Glennie was asked to carry out the documents leading to that.

It was sometime in September or October when the Auditor General indicated that he would be carrying out the audit, and whatever his recommendations may be, we'll have to take them very seriously, because I have a great deal of regard for the Auditor General and the office he holds. But I think we would be remiss in our duties and would give the wrong impression if we were to stop functioning as we are simply because the Auditor General was carrying out an audit, and I hope you would agree with that.

Dr. Glennie, do you want to comment?

Dr. Judith L. Glennie (Clinical Pharmacist, Patented Medicine Prices Review Board): I want to add one comment. You have to remember what the fundamental purpose of these consultations is, and that is and always has been to find out from people what they like and don't like about what we're doing now. That has always been the scope. If the issue is to look at what our mandate is, as Dr. Elgie has said and as you've said yourself, it is the job of Parliament to decide what the board's mandate should be.

Our purpose, which has been very clear from the beginning, is to get feedback from people on what they like and don't like about what we're doing, and to have them tell us how we should change and how we should do things better within the scope of what we do now.

• 0945

Dr. Robert Elgie: Let me comment on two other remarks you made.

You referred to some links between the PMPRB and the Pharmaceutical Manufacturers Association. I'd like to hear more about that, because I don't hear of those links, nor do I take part in any such linkages. If they're occurring, then I'd want to hear about it and I would expect to hear about it from those who make those accusations.

The Vice-Chair (Ms. Elinor Caplan): Thank you very much.

Mr. Myers, you're next, but I do think it is important in the language of this committee, particularly since we are being heard across the country by anyone who's interested in this topic, to know that the provincial auditor does audits on a regular basis of all arms of government, and that the term audit is an appropriate one, as opposed to investigation. There's no suggestion of any wrongdoing; the auditor is just doing his job.

Mr. Joseph Volpe: Would that be the federal auditor?

The Vice-Chair (Ms. Elinor Caplan): Did I say the provincial auditor? I meant the Auditor General. I looked at Dr. Elgie, and my past life passed before my eyes. The provincial auditor has nothing whatever to do with what we were just saying. It is the Auditor General, and he is conducting an audit.

Dr. Robert Elgie: I'm sure your listeners will take comfort in that.

The Vice-Chair (Ms. Elinor Caplan): That's right.

Mr. Myers.

Mr. Lynn Myers: On that point, I sit on the public accounts committee with the Auditor General, and what you point out, Dr. Elgie, in terms of what's going to happen through that process, is in fact accurate. It's a normal course of events, and as we do in many departments, we will review and take a look at what has happened. But as you pointed out, your committee proceeds and proceeds accordingly. That's the way it is.

I was interested, though, in the drug expenditures as a percentage of total health expenditure, going back to the 14.4% and the kind of confusion that reigns in the minds of individuals. I've had seniors, for example, and others say we really need a pharmacare program because drug pricing is going through the roof. I think you alluded to and touched on the fact that there is this kind of confusion.

On page 13 of your report, at least the one I was reading, you said maybe it's a question of terminology and clarification of terminology. Maybe it's a question of information and getting perhaps better information out.

I wonder if you could highlight how you try to correct some of those misconceptions or try to change some of the thinking people have, or can you?

Dr. Robert Elgie: It's very difficult to change the price-cost to have any definitive explanation that people understand regarding the price-cost issue.

We say prices are going down, and yet in 1996, for example, the price of drugs went up by 2.7% while patented medicine prices went down by 2.1%. It's difficult for people to understand that dichotomy. But as I tried to say in my statement to you, and as we say in this document, there is more than just the price that goes into the cost of a prescription. There's a movement of a higher cost item into the prescription basket and therefore the movement out of a less expensive item. There's an increase in the number of prescriptions, and there's an increase in the quantity of drugs that are being prescribed. Both of those latter two may be related to the changing demography of our nation, with an increasing proportion of our population aging and with the medical needs they have requiring medications, for example for high blood pressure and for other things that occur with those of us who at this stage of life are still aging.

Mr. Lynn Myers: I understand what you're saying, and I think it's very important for us and others to fully understand what you're saying. What I'm saying, though, is most people don't understand the finer points.

Dr. Robert Elgie: No, they don't.

Mr. Lynn Myers: So how do you get the message across, or can you? Is it a matter of educating people? Is it a matter of marketing ourselves differently in a way that people understand, easier terminology? I don't know; I'm searching for answers.

Dr. Robert Elgie: I think that's an important point. That's something we're going to be looking at as we review our reporting process.

For example, the annual report that you will have in your possession shows that in 1995 the quantity of patented medicine sold went up by 14%, and in 1996 the quantity sold went up by 9%. On average, since 1987, quantities have gone up by 9%, and yet in the past three years prices have gone down. Surely there's a clear message there, but perhaps we need to take those facts and put them together in some package that helps people to understand what the cost really means.

• 0950

Dr. Judith Glennie: I wouldn't mind adding something. The kinds of questions you are asking are exactly what we were asking particularly our consumer participants in our public sections. We said “You sat through our presentation and you may have learned something. How can we present this information in a better way to you and get it to you as a front-line consumer?”

We've had offers actually from professional organizations to help us to try to get that communication going by working with us and developing material that can then be brought to people at the consumer level. That's what the consultations were really all about: if you don't understand what we're doing or if this issue is an area of confusion, how would you like to see us address that, and what are your ideas? That certainly has come through in a lot of the written submissions as well as the verbal submissions at the presentations.

Mr. Lynn Myers: I would really encourage that, because I think that if you put it in a streamlined, easy-to-read kind of format, you'd cut down on a terrible, terrible amount of confusion that ordinary people have with respect to this issue. It just makes sense, and I think it would help us all in terms of having people understand better exactly what's going on.

Dr. Robert Elgie: At last week's meeting of our executive committee, one of the issues I raised was that we should be exploring the feasibility of having plain-language issues documents, so that every time there's a phone call, a letter or a request of any sort, an issues document trying to set out the response in plain language is there and available.

The Vice-Chair (Ms. Elinor Caplan): Thank you very much.

I think one of the other things people often don't realize is that many of the drugs are replacing invasive surgeries. So part of the challenge—and again, I'm wearing a hat from a former life—is understanding how things shift and change in the delivery of services. One of the reasons we are so interested in research and development is to see if we can find drugs that will not only help people and not necessarily cure, but replace high-risk and dangerous procedures. Today, for example, you have the choice between heart surgery and drugs, and as I remember, I think they've pretty much stopped doing stomach surgeries now, as there is a drug that deals with the old ulcer problem.

Dr. Robert Elgie: Yes, there are several drugs that deal with this. As a physician, I can tell you that in my training days, every day I was in the operating room assisting a surgeon on surgery on the stomach, for a variety of types of surgery for ulcer problems, and it's rare for interns today to see that kind of surgery.

The Vice-Chair (Ms. Elinor Caplan): That's the sort of thing I think people don't know. Most of the time, when we talk about contact with health care, the only thing people want to know is am I going to get the care I need when I need it?

I think your public information role is a very important one—to help people understand how things have changed and also how our costs shift, if you will. Sometimes it's not a shift because of the different silos, I guess is the word, but because of not having any kind of integration that would allow for appropriate reallocation of resources.

Ms. Judy Wasylycia-Leis: Let me just ask a few questions on the pricing issues, and maybe come back, if we have time, to the question of perceptions in terms of the industry being very close to P and P or the government as a whole.

You've pointed to Canada in terms of its current record in terms of prices falling below the international median, and talked about the non-patented drug prices increasing at a faster rate than the actual patented drug price. Many people have raised questions about what it really means, whether we couldn't do better, and how you actually arrive at those kinds of statements.

My first question, and I'm sure you've heard this over and over again, is the question of how we set the price for new patent drugs, and the question of the international comparison. In the hearings on Bill C-91, people said time and time again, why are you limiting your comparison to seven of the 24 OECD countries? Why not all 24 countries? And of those seven, why is it the case, as people have said, that often the price is based on a manufacturer submitting prices from two or three of those seven countries?

• 0955

So my questions are have you looked at the framework you use for comparison purposes, and why not all 24 countries? Why those particular seven countries?

Some of the data suggests that the prices in that group of seven, which would include France, Germany, Italy, Switzerland, the United Kingdom, the United States, and Sweden, tends to be, on average, higher than another group, but that might include Australia, Belgium, Finland, Greece, the Netherlands and New Zealand. So are you looking at the why this group of countries, where did it come from? And is it not within your mandate now to actually revisit that issue?

Secondly, when it comes to comparing the increase of non-patented drugs on average over patented drugs, how do you construct the index to make that determination? Many people have said, in fact, and it's tied into the issue of access to the information you use, and they believe it's not public and it should be.... That's a related question. Do you in fact eliminate certain data to make that case?

Some very strong statements were made throughout the Bill C-91 hearings, and there are real concerns about how you construct the index. In fact, you could construct the index in a way that would show patent drugs going up faster than non-patented drugs. That has been documented in some studies.

So those questions are around the question of the international comparisons and the question of how you construct your index for comparing non-patent and patent drugs.

Dr. Robert Elgie: On the issue of the comparative countries, I hope there's no misunderstanding about this. We do not have any say in which countries we are required to compare our prices to internationally. Those countries are set out in the statute or its regulation. If those are to be changed—Mr. Volpe will recall quite well that this was an issue before the committee on industry last year—those are matters the ministry and the government will have to change.

In terms of the way we construct our indexes, I don't think we construct them. First of all, let's start with our patented medicine price index. It follows the same methodology as Statistics Canada does, and we provided the industry committee with a paper last year on how we construct our patented medicine prices index. So that's no mystery.

The only difference between the result we get and what Statistics Canada gets is that we have the actual transaction data for every transaction that takes place. We don't go out and take samples and develop a database and statistics based on those samples. Our data is real. It relates to every transaction that has occurred in the country.

How did we construct, as you call it, the non-patented medicine price index? We simply took what Statistics Canada had said was the overall price index for drugs and deducted the patented medicine price index, which is a real transaction index. There's no mystery about it.

We've had discussions with Statistics Canada. We're in the process of trying to see if there can't be some revision of the way they deal with this matter in light of the fact that we have real data with respect to patented medicine in the price index. So there's no mystery about it all.

If Statistics Canada were to show proof to us that we're wrong, we'd have to change it, but they aren't proving that we're wrong. We're quite right. We have better data with respect to patented medicines, and nobody argues that, including the persons, I'm sure, you've talked to.

The Vice-Chair (Ms. Elinor Caplan): Thank you very much, Dr. Elgie.

Are there further questions? Ms. Wasylycia-Leis, please continue.

• 1000

Ms. Judy Wasylycia-Leis: First of all, with respect to the international comparison, you mentioned that those seven countries are set in legislation and that's not part of your mandate. But my question is, if you're hearing that concern over and over again and if the research validates those concerns, would you consider including recommendations in your own report that flow from the consultation process around such an issue?

Dr. Robert Elgie: We've told persons who have appeared before us throughout the country that those matters that are not within our mandate but relate to government policy are matters we'll transmit to the minister as information we've received during the course of our consultations.

But more importantly, I think what I had hoped to hear from people is what we might do in those circumstances I mentioned earlier, where there is only one comparative country, or two comparative countries. How does a board truly try to deal with the price issue when it's clear what the government meant and what the price guidelines meant? It finds a median. It's difficult to find a median when there is only one comparative country, or only two comparative countries, and we're exploring ways we might deal with that now.

For instance, if we're seeing this.... And I have no reason to believe it's true, but there are accusations that it's company strategy to do these things, global strategy. I have no reason to believe that's true, but the fact is there are some drugs for which we have only one or two or three comparative countries, and we're exploring whether there's anything we can do to more accurately express the will of Parliament as it was put in the statute and its regulations.

Ms. Judy Wasylycia-Leis: Looking within your current mandate and the seven countries that are used for comparative purposes, statements and allegations have been made that the PMPRB will accept the data from two or three countries provided by a manufacturer of a new drug, as opposed to even all seven.

Have you reviewed that situation? Have you taken measures to independently verify the international drug prices and to make the distinction between the list price and the selling price, and to take into account discounts available in countries to which you are comparing?

Dr. Robert Elgie: There are many questions there. Forgive me if I missed one; you can raise it again for me.

When we look at the issue of prices in other countries, we have to understand that the act and the law require under significant penalty that companies provide us with the publicly available information about the market gate or manufacturer's price in each of those countries. The statute says that they shall provide that by class of customer, namely hospitals, wholesalers, pharmacists, or whatever. So they are required by law to do it, and failure to do so would result in a significant allegation of negligence or more than that.

What do we do to try to verify that? The statute says we may look to a price that's negotiated with the company that's in a government formulary and look on that as a publicly available manufacturer's or factory-gate price.

When we were worried about the matter when it was raised in committee, we had Deloitte & Touche, an accounting firm, review the whole matter for us, and they came back with a conclusion that it's a very difficult thing to try to verify what the actual factory-gate or manufacturer's price is, but in general they had found that the prices that were being filed by companies for the top 25 drugs were between 4% and 40% lower than the figures that were in the formularies in those countries.

How do we go about further verification of that? It's not easy to do. In the U.S., for example, we've just now obtained information that the U.S. Department of Veterans Affairs is publishing a formulary of drugs, in which there will be some significant discounts from prices that are in other books in the country. We're now trying to make a determination as to whether or not that formulary complies with the legislation, namely that it's a formulary that has been agreed upon between the government and a supplier.

• 1005

But we haven't stopped at that. In light of what Deloitte & Touche said, namely that it might be possible to back up from the retail price, following legislative rules in each country about what the wholesale mark-up shall be and what the retail mark-up shall be, and verify the price a company gives us by backtracking through publicly available information and requirements of statutes, that's what we're working on now. We expect to be able to release a paper on that in the very near future to outline what we're prepared to do wherever we think it's feasible and necessary to do so.

The Vice-Chair (Ms. Elinor Caplan): Could you share with the committee what you're hearing at your consultations on the issue of inclusion of both generic and single-source drugs, and perhaps for the people listening, explain a little bit about what that issue is about and how that's seen through your consultations as a concern?

Dr. Robert Elgie: I think it's fair to say that throughout the consultation process, persons or organizations appearing out of consumer interest universally felt there should be some power on the board to look at the prices of generic drugs.

A distinction is made by some between single-source and multiple-source drugs, on the grounds that in multiple-source there's a competition taking place and in single-source there isn't. Universally they raised the example of drugs such as Mestinon, a drug used for a neuromuscular disease, the price of which was quadrupled in one year, as soon as the patent expired. That's a single-source drug and that's an example of a drug for which there's nothing else available. The market is relatively small. It might be called, in the U.S., an orphan drug, and therefore no competition is going to occur in it. Certainly some ministers have written suggesting that that type of drug should be included in our mandate, and this is an issue that the ministers' federal-provincial-territorial task force is looking at.

So single-source drugs are drugs where there's no competition in the generic market, usually because there's too small a market, and multiple-source is where competition is taking place.

The Vice-Chair (Ms. Elinor Caplan): Have you looked at the impact of reference-based pricing on drug prices? Is that part of your mandate?

Dr. Robert Elgie: No, that's not part of our mandate, but we have followed the development of that issue in British Columbia.

The Vice-Chair (Ms. Elinor Caplan): Do you have another question?

Ms. Judy Wasylycia-Leis: Sure, I have lots more.

The Vice-Chair (Ms. Elinor Caplan): We have another hour, don't we? Is that part of Murphy's Law?

Ms. Judy Wasylycia-Leis: I'll never get this opportunity again.

The Vice-Chair (Ms. Elinor Caplan): This is true.

Dr. Robert Elgie: You can have the opportunity any day; come on over.

Ms. Judy Wasylycia-Leis: I might just do that.

Back to your response to my earlier questions about the international comparisons, are you saying, as some have indicated, that it is not the case that it is sometimes the practice of the PMPRB to accept data submitted by drug manufacturers based on data for only two or three of the highest-priced countries in the Group of Seven?

Dr. Robert Elgie: No, no. If it's being sold in any of the Group of Seven countries, they must submit data to us. If they don't, we will require it.

Ms. Judy Wasylycia-Leis: You're saying if the drug is available and being sold in all of those seven countries, then they must include the data of all seven countries?

Dr. Robert Elgie: Yes.

Ms. Judy Wasylycia-Leis: So it would only be the case that two or three countries are used for comparison purposes because the drug is only available in those two or three countries?

Dr. Robert Elgie: Yes.

Ms. Judy Wasylycia-Leis: Okay.

Dr. Robert Elgie: But let me just add one thing. There are several presentations of some drugs. For example, one drug may be available in vials and available in cartridges, and a company may only sell the cartridges in one country and in another country sell only the vials. Then you get into difficulty.

Ms. Judy Wasylycia-Leis: Are you equipped to do the kind of investigative work to determine those distinctions and to still make a legitimate comparison, even if the form of the drug is different?

Dr. Robert Elgie: If we weren't satisfied there was legitimacy to what was happening, we would go further and investigate.

Ms. Judy Wasylycia-Leis: Do you actually send investigators into some of these other countries?

Dr. Robert Elgie: No. We require them to appear and present their books. The statute gives us that power.

Mr. Critchley, do you have a comment?

• 1010

Mr. Wayne D. Critchley (Executive Director, Patented Medicine Prices Review Board): Perhaps I could just add a couple of things.

You will remember that the international price comparison is significant for breakthrough drugs. There are only a handful of breakthrough drugs a year, so the foreign prices are really only significant for price review purposes in a small number of cases. In most cases it's the domestic prices of comparative drugs that are relevant.

In those cases where the foreign prices are relevant to the price review process we do a lot of work to verify the prices—they're filed with us—including going into those foreign formularies that Dr. Elgie mentioned, backing out the prices from there to verify that the prices filed are correct.

It's even more important that we have contacts in all those countries in the government regulatory agencies. We can contact those people by telephone and by fax. We don't go to see them. We have very good contacts in those countries. They help us to verify that the information we're working with is correct. There have been a couple of cases where we found the information was not 100% correct and we had it corrected.

Ms. Judy Wasylycia-Leis: As you said, there are very few new breakthrough drugs, but there are, as I understand it, many “me too” drugs, and the same system and framework is being applied to “me too” drugs. They are under the guise of new drugs, but in effect their therapeutic value—

Dr. Robert Elgie: Price comparison, yes.

Ms. Judy Wasylycia-Leis: —is limited in terms of existing drugs on the market. Your system allows for the introductory price based on your international comparisons for these “me too” drugs. Is that not the case?

Dr. Robert Elgie: No, that's not true.

Ms. Judy Wasylycia-Leis: Can you explain that?

Dr. Robert Elgie: The category three, which is the so-called “me too” drug, which means a new chemical or a new form of presentation, is based upon a therapeutic class comparison, which means the existing drugs that are within this country. And the price shall not be higher than the highest price of an existing drug in the country. It has nothing to do with the international comparison.

Ms. Judy Wasylycia-Leis: When a company comes forward with approval for a new drug...with a lot of research it's discovered that it really is another “me too” drug. Do you know that at the beginning, at the outset, or do you judge it on the basis of it being a new drug? And don't we allow many new patents and prices based on international comparisons for these “me too” drugs?

Dr. Robert Elgie: A very small number of new active substances achieves a category two or breakthrough status. A few might be in category one, but by and large the majority is in category three. We don't give a special status to a drug simply because it may be a new chemical. It has to be a breakthrough drug or a substantial improvement drug. And that determination will be made after consultation with an external human drug advisory panel. We may end up with outside persons who give us recommendations regarding whether a drug is a breakthrough drug or not.

The Vice-Chair (Ms. Elinor Caplan): Thank you.

Ms. Judy Wasylycia-Leis: Could I just have one follow-up on that one?

Some studies do suggest that at least between 1991 and 1995—and I don't know if there's more current data—92% of new patent drugs did not involve any improvement in terms of therapeutic guidelines. If that's the case, doesn't that account for what you've just said in terms of the role of the PMPRB in this area?

Dr. Robert Elgie: No, not at all. I think it supports what we're saying. There are very few breakthrough or substantial drugs and it's only breakthrough or substantial drugs that receive the median price range of the international community. In other words, about 90 new drugs come out a year, and the number of breakthrough drugs may vary from two to seven. So it will continue to be true that the great majority of drugs will either be category one, which is just line extensions of the same drug, or category three, which are new chemicals, or new presentations or forms of an existing drug. There the prices are determined based on existing drugs in this country. It has nothing to do with the international price.

Ms. Judy Wasylycia-Leis: Thank you.

The Vice-Chair (Ms. Elinor Caplan): Mr. Myers, do you have a question?

Mr. Lynn Myers: No.

The Vice-Chair (Ms. Elinor Caplan): I have a question if you don't.

We hear about non-patent drugs being the responsibility of the provinces. Is that the jurisdictional problem you have?

• 1015

Dr. Robert Elgie: It's a jurisdictional problem. The authority for this Parliament to legislate with respect to drugs flows from the Patent Act. Therefore, drugs that are patented come within the jurisdiction of the federal government.

The Vice-Chair (Ms. Elinor Caplan): So any suggestion of generics or non-patented drugs or that kind of thing raises some jurisdictional questions, and you'd have to have the support and agreement of the provinces in order to change your mandate in that direction. Is that correct?

Dr. Robert Elgie: Yes, provinces would have to delegate that authority to this board, and we believe that under the present act there's a section that would allow it.

The Vice-Chair (Ms. Elinor Caplan): Thank you very much. This has been very helpful.

Ms. Judy Wasylycia-Leis: Madam Chair, I have a few more questions.

Back to the question of the “me too” drugs, you say there are overall about 90 new drugs introduced each year. If you applied the statistics—you said this already—only two to seven of those would be actual breakthrough drugs.

Dr. Robert Elgie: They're rare here.

Ms. Judy Wasylycia-Leis: The rest are “me too” drugs, presumably.

Dr. Robert Elgie: No, the rest are line extensions or “me too” drugs, or moderate improvement.

Ms. Judy Wasylycia-Leis: As I understand it, “me too” drugs come in at the highest price in the same therapeutic class. If this is the 16th drug in a group of previously 15 drugs, it comes in at the highest price, and that's something you regulate, that's something under your mandate, is it not?

Many people have recommended that we should in fact limit the protection of “me too” drugs and discount their introductory price. Is that something you've heard, and is that something you're prepared to recommend?

Dr. Robert Elgie: That's one of the issues before us to consider, but it's also one of the issues the minister's federal-provincial-territorial task force is looking at. The preliminary information we're hearing is that the market works. The drugs are being sold at lower prices than the introductory price that's approved. However, whether or not we think it's justifiable to change our guidelines regarding category threes is a matter we'll have to think about over the next few months after we hear the presentations this week. I take it you think they should be changed.

Ms. Judy Wasylycia-Leis: Based on what I've heard, it seems to be a very legitimate concern, and I'd be very interested in hearing the evidence. Time and time again, whether it's part of our hearings on natural health products, we keep hearing about pharmaceutical products and the price advantage. We keep hearing the questions about the therapeutic value, about so many pharmaceutical products on the market when there are alternatives in the natural health product area.

It is an issue we have to try to come to grips with. If in fact you can deal with that situation through price regulations, then we should be doing that. If it's beyond your mandate, then it's certainly something the health committee or perhaps an independent body set up to do such a thing should be looking at.

You were telling me that the evidence suggests we don't have a problem.

Dr. Robert Elgie: Under the same preliminary evidence, that information will be provided to the ministers in the fall. It's not information that's in a complete form and it hasn't been submitted to me formally.

That issue has been raised by some people as we have carried out our consultation processes, and it's an issue we'll be looking at. What we'll do about it will be a matter that follows the discussion and the determination by the board and a proposal that's put out for comment, if there is to be a change.

Ms. Judy Wasylycia-Leis: On this whole area of the framework that allows for setting a maximum price for introductory new drugs, do you find companies take advantage of that provision? Do they take advantage of the fact that the prices are set, that a new patented drug comes in at the highest price in that therapeutic class? Do companies take advantage of this, or do you find there are other factors involved?

Dr. Robert Elgie: Do you mean the category three comparison?

Ms. Judy Wasylycia-Leis: Yes.

• 1020

Dr. Robert Elgie: We don't have data on that, but, as I've said, that kind of data is being accumulated by the federal-provincial-territorial task force and we look forward to seeing it to see if there really is a problem in the category three.

Mr. Lynn Myers: I think if there are further questions perhaps Ms. Wasylycia-Leis can discuss them privately with Dr. Elgie.

Ms. Judy Wasylycia-Leis: If I could just finish up two or three, then I'll be finished.

The Vice-Chair (Ms. Elinor Caplan): One last question. This is it. Last question.

Ms. Judy Wasylycia-Leis: Let me try to throw out a number. There are questions around the international developments. You've hinted at them in your presentation. There is a move towards establishing a single introductory price around the world. I'm wondering what that means in terms of Canadian policy, how that will affect us, what the long-term ramifications are. There's a question I've asked Judith before about the impact of the MAI on any drug pricing policy we undertake in this country, which is still a big one.

My last point has to do with a point I raised earlier, since you asked for verification or evidence pertaining to the perception of links between the PMPRB and PMAC. It's an issue I raised in the House before, and I hope you could investigate and look into it: the revolving door between the PMPRB and the PMAC.

I raised the question of two researchers or two staff of the PMPRB who left to work for PMAC and were heavily involved in the production of a national study that called for the rejection of any notion of a national pharmacare plan. It would appear even from our research that in fact conflict of interest guidelines were not met. I wouldn't mind if you could find the facts of the situation and deal with this perception that there is a revolving door between government and the drug industry and that too many times the interests of the industry come first before the public good.

Dr. Robert Elgie: First of all, I'm unable to deal with any relationship the government may have with industry, nor do I have any reason to believe there is any unusual relationship. But in terms of this agency, let's set the record clear.

There are public service conflict of interest guidelines, and I've never been advised as someone who must investigate it that there is evidence or an allegation of a conflict of interest with respect to the public service rules. For more senior executives who leave there's also a post-employment rule, and for members of this board, or part-time members, we're covered by the general principles, but we've seen fit to adopt even stricter codes of conduct for ourselves and our activities.

I've never heard of any complaint. I've never had a complaint registered that there's been some inappropriate activity by a former staff member that contravenes the public service guidelines. If there is, I'd like to receive it along with evidence that substantiates an investigation.

In terms of linkages with the industry, let me assure you that although there may be two people who formerly worked with the board and who are in private consultation practices, they have never met with me over any issue related to the Patented Medicine Prices Review Board. I see them. I say hello to them. I ask them for no advice, and if they gave me some advice I'd tell them I am not listening unless everyone's there to hear it.

And the same would be true of any member of an individual pharmaceutical company. I don't meet with them privately. Members of my board don't meet with them privately, just as we don't meet privately with any group. There has to be some publicity or public view taken of any meeting that occurs with interested parties in this world we live in, which is a tough world.

As I said to someone one day, I like to feel that we all have to live as if there is a reporter sitting over our shoulder at every meeting we go to, and that's not a bad rule to follow.

The Vice-Chair (Ms. Elinor Caplan): Thank you very much for a very interesting presentation. We appreciate—

Ms. Judy Wasylycia-Leis: Could he just answer the question on international policy?

Dr. Robert Elgie: The single source.

Ms. Judy Wasylycia-Leis: Yes.

Dr. Robert Elgie: I don't know what's going to happen with that. It's very interesting. I read about that too, the script. I also read that the subcommittee that's looking at it was adjourned and it won't be convening for several more months or years, and when I inquired about it there was just a shrug of the shoulders. So whether it will ever come to be, I don't know. What it will mean for us I have no idea, but I look forward with interest, as you are.

The Vice-Chair (Ms. Elinor Caplan): I'd like to thank you all for attending the health committee's meeting this morning and sharing with us the information about the work you're doing.

• 1025

Dr. Robert Elgie: Thank you.

The Vice-Chair (Ms. Elinor Caplan): I hope the fact that this part of your consultation is broadcast will help to inform people who have taken the time to listen.

I thought it might be interesting if we told people how they could reach you, and perhaps you want to put your own plug in.

Dr. Robert Elgie: The toll-free number is 1-877-861-2350.

The Vice-Chair (Ms. Elinor Caplan): For techies, you have a web site?

Dr. Robert Elgie: We have a web site, which is pmprb@pmprb-cepmb.gc.ca. It's difficult to remember, but there it is.

And we have a fax number: 613-952-7626.

The Vice-Chair (Ms. Elinor Caplan): You're headquartered in Ottawa.

Dr. Robert Elgie: Yes, at 333 Laurier Avenue West.

The Vice-Chair (Ms. Elinor Caplan): Thank you very much for coming before the committee this morning. We appreciate it.

Dr. Robert Elgie: I think it's very valuable to come before you. Thanks very much.

The Vice-Chair (Ms. Elinor Caplan): We agree. Thank you.

The meeting is adjourned.