Thank you, Mr. Chair, and good morning.
I'm delighted for the opportunity to appear before the committee to share with you a very special report, which is, in fact, being released today.
As the committee is well aware, expanding comprehensive prescription drug coverage to all Canadians has long been considered the unfinished business of our medicare system. Our patchwork approach, with one in five Canadians having either inadequate coverage or no coverage at all, makes Canada an outlier among OECD countries with comparable comprehensive universal health systems. While policy experts, clinicians, and pharmacare advocates have, for some time, encouraged government action, the voices and preferences of Canadians themselves have been difficult to hear.
The report I am presenting to you today provides unprecedented guidance from Canadians, and is directed to health ministers and policy-makers across Canada. I would like, in my remarks, to first review our process and recommendations, and then invite a member of the Citizens' Reference Panel, Monsieur Jean-Pierre St-Onge, from Dieppe, New Brunswick, to describe his experience as a participant.
The Citizens' Reference Panel on Pharmacare in Canada, which I chaired, was a substantive effort to provide Canadians with the information and context they would need to reach their own conclusions on the appropriate drug coverage model for Canada. Working under the supervision of an 11-member advisory and oversight committee that included some of the most respected clinicians and health policy leaders in the country, and with a research grant from the Canadian Institutes of Health Research, the Mindset Social Innovation Foundation, the Michael Smith Foundation for Health Research, and the Universities of Toronto and of British Columbia, we set out to convene 36 Canadians, giving them a very special opportunity to help shape health policy in Canada.
As with the many reference panels that have helped to influence public policy in Canada, 10,000 letters were randomly distributed by Canada Post to households across the country, far more than for a focus group or a town hall meeting. Each letter invited the recipient to volunteer to spend five days here in Ottawa. I'm pleased to report that at a time when we routinely underestimate the public's appetite to play an engaged role in public affairs, almost 400 Canadians volunteered, coming from every conceivable corner of the country and walk of life.
From among the respondents, 36 individuals were randomly selected, with one member, regrettably, withdrawing due to illness immediately before the start of the process. The members of the reference panel themselves, as I've said, were randomly selected, but in such a way as to mirror the Canadian population and the prevalence of drug coverage and personal expenditure.
I would refer the committee to page 10 of the report to see a map indicating their place of residence as well as the short biographies we have included. In short, we brought together a cross-section of Canadians, and working out of the Canadian Museum of History, with a commanding view of Parliament and that other body of citizen representatives here at the House of Commons, we began our work.
From Wednesday until Sunday, the members met and held lengthy, bilingual sessions often running from nine in the morning until nine at night. My facilitation team had prepared a detailed curriculum, and during our first days together we heard from 20 different speakers. These included clinicians, policy-makers, pharmaceutical manufacturers, insurers, patient representatives, and economists. Each was intended to add a critical perspective to the discussion.
For the members, it was a remarkable immersion in a difficult and nuanced policy field. These 35 people put everything else on hold for five days, without remuneration, in order to serve their fellow Canadians and provide the government with their best advice.
The question of drug coverage affects each panellist differently, and although they did not always agree with one another, they found a way to tackle these differences with enthusiasm and grace. Working together, the panellists identified nine issues, or areas of concern, which they recorded in their report. Among these concerns, they cited the following areas.
First, there is a patchwork approach that leaves millions of Canadians without the coverage they need, leading to poor patient outcomes and increased overall health care costs.
Second, there is weak purchasing power, leading to higher than necessary drug costs.
Third, there are inadequate data systems for monitoring the use and cost of prescription medicines.
The fourth concern was predatory pricing and patent extensions that drive up costs, with little transparency on the true research and development costs of new medicines.
Fifth is limited public awareness of this issue, leaving many Canadians to cope with inadequate coverage alone.
In response to these concerns, the panel issued a series of principles that they believe should guide policy-makers, as well as a set of detailed recommendations. The panellists named five principles: that any action uphold the principle of universality, that it be patient centred, be accountable to the public, be evidence based, and be sustainable.
Following extensive deliberations, the panel reached consensus and calls on the government to work with the provinces and territories to implement universal public coverage of medicines listed on a new national formulary. They recommend that this formulary be extensive enough to accommodate the full range of individual patient needs, including rare diseases. They also recommend that all covered drugs undergo a rigorous evaluation process to ensure both the efficacy and value for money of funded treatments.
Importantly, and as a first step towards a comprehensive public drug plan, the panel also calls on the government to move immediately to implement public coverage for a short list of basic, frequently prescribed drugs. This short list would begin the shift towards a comprehensive universal pharmacare system and become the basis for this new national formulary.
The panel also endorses an ongoing and valuable role for private insurers in providing supplemental coverage. Under any new system, employers, unions, and individuals could continue to purchase private insurance for medications not on the public formulary as well as other paramedical services.
Finally, the panel is not averse to the government funding the program through modest income and corporate tax increases, which they believe is the most fair approach. They also urge further consideration of copayment models, provided they do not create unreasonable barriers for low-income individuals.
To conclude, much as the health system is rightly focused on patient-centred care, it's my belief that federal legislation can only benefit from a more citizen-centred approach to policy-making. I hope you will recognize the members of the Citizens' Reference Panel on Pharmacare in Canada for their singular contribution to this important debate and the service they have provided on behalf of Canadians.
Let me now turn to a member of the panel, Jean-Pierre St-Onge, so that he can comment on his experience.
Thank you, Mr. MacLeod.
Mr. Chair, I'm honoured to appear before this committee today.
The letter I received really caught my attention in three areas, namely, the special opportunity, the assistance with creation and the cost of prescription drugs.
I spent my life working in the insurance and financial services sector. I'm aware of the insurance problems experienced by people who have a pre-existing condition. When they learn that their drugs are excluded, most decide not to obtain the drugs.
When I received a call telling me that I would be participating in the reference panel after I responded to the invitation, I was therefore pleased to note that the knowledge I'd acquired throughout my life would be useful for something, especially in the government.
On October 19 and the following day, the 20 experts mentioned by Mr. MacLeod overloaded us with information. However, we also had the chance to ask them questions. After two days, we were up to speed on the issue and we went to work.
I noticed that the group of participants showed a desire to help others. When people realize that problems exist, they seem to launch into finding solutions. The participants all contributed. We were divided into sub-groups, and we all shared information.
I was very impressed with the process. The ratio of men to women was 50/50. There were people from all walks of life, including young people and older people. There were people from different ethnic groups and different cultures, along with new Canadians. The diversity was incredible, and I was impressed with everyone's participation. We were guided by an experienced team. I must admit that I was impressed with the entire process. It was well planned.
We based our recommendations on core values. Our system needs to be updated. When we always use the same working methods, we obtain the same results.
We spent five days trying to find solutions. Other methods exist. Obviously, if we want to accomplish something in this area, decisions must be made. The status quo is no longer an option, because millions of Canadians are affected each day.
We're confident that our recommendations will help you achieve your goal.
Mr. Chair, committee members, on behalf of the Heart and Stroke Foundation, I'd like to thank you for the opportunity to appear before you and to share our perspectives on the development of a national pharmacare program in Canada. My name is Lesley James, and I'm the senior manager of health policy with the Heart and Stroke Foundation.
First and foremost, I want to express gratitude to Parliament for recognizing the importance of this subject area. Access to medicine remains a vital challenge in the provision of quality health care throughout Canada. The issue of inequitable access to medicines and the need for a national solution have been key priorities of not only the Heart and Stroke Foundation, but also of the Health Charities Coalition of Canada, which is a collaborative group of 30 health organizations that the Heart and Stroke Foundation is proud to work with. Access to medicines impacts every health issue faced in Canada, with some common barriers across all conditions and unique challenges for individual diseases.
We are here today to discuss an issue that represents an ongoing gap in our universal health care system. As Canadians, we are extremely proud of our world-class system of care and its defining principles, which ensure all Canadians are able to access health care, regardless of their ability to pay or geography. We value these principles because they represent fairness and equity. Unfortunately, they don't extend to pharmaceuticals outside of the hospital.
Access to medicines remains an area of inequity, fragmentation, and systems failure, with 10% of Canadians being left behind. Without better drug coverage systems, Canadians truly do not have universal health coverage. Heart and Stroke believes there is much opportunity for improvement. We'd like to underscore that the first step for Canada is to continue to strengthen behaviour and lifestyle modifications at the population level, as a means of both preventing disease and managing heart and brain health. We thank the government, and specifically members of this committee, for their commitment and leadership around disease prevention through healthy living strategies. We need more in order to make it easier for Canadians to access healthy food, lead active lives, and remain smoke free, which will reduce their risk of chronic disease.
At the same time, the foundation recognizes that prescription drugs represent a very important component of treatment for a wide range of cardio and similar vascular conditions. When prescription drugs are used appropriately, they help to prevent disease, save lives, and improve quality of life. They can shorten time spent in hospitals and reduce demand for physician services, leading to decreased costs for the health care system in the long term.
While innovation in pharmaceuticals has led to medical breakthroughs and improved health status for many Canadians, our reliance on medicines has become greater, and many fear that the rising costs will be unsustainable for our system. Prescription drugs have risen from 6.3% in 1975 to 13.4% in 2014 of overall health care spending in Canada.
Our reliance on prescription drugs is clear, and it is not forecasted to diminish. Roughly half of Canadian adults take at least one prescription medication, while 15% take four or more. This means that in this room, at least five of you are taking one medication daily. Approximately 98% of Canadians with chronic diseases take at least one prescription drug, and 54% of Canadians with chronic conditions take four or more.
In 2014, Canadian pharmacies dispensed roughly 87,000 prescriptions for medications to treat cardiovascular disease. That's up 2.5% over the previous year, and it represents the highest dispensed category of medications in Canada. Prescription drugs, especially taken over an extended period of time, can be very expensive. Overall, while a majority of Canadians have some level of drug coverage, access to medicines is neither universal nor equal. In some cases, people go without recommended medications because they cannot afford them, and in other cases, purchasing the required medications puts them in serious financial difficulty. The next time you pick up a prescription medication from the pharmacy, take note of the initial cost and the cost after insurance benefits have been applied. You'll likely be very surprised by this difference.
Between 60% and 75% of Canadians are covered by private insurance plans, and between 9% and 43% qualify for government insurance, depending on their area of residence. Unfortunately, 3.4 million Canadians are either under-insured or not insured at all for out-of-hospital prescription drugs. In a survey of Canadians with comorbidities, with heart disease being one, 14% report having no insurance for necessary medications.
Access is a major issue, with more than one in five Canadians reporting difficulty paying for prescription medications without insurance coverage and one in 10 reporting difficulty even with insurance coverage. In 2010, 12% of Canadians reported paying more than $1,000 out of pocket for medical cost and 10% said that they did not fill their prescription or skipped doses as a result of the cost of their medication. Both of these figures depict Canada as much worse off than comparator countries.
Non-adherence to prescription drugs is extremely problematic and has been associated with significant increases in mortality, hospitalizations, and health care costs. These issues need to be addressed to ensure sustainability of our health care system.
Why are 10% of Canadians under-insured or not insured? Many do not have insurance because they are self-employed or working on contract or on part-time work. One-third of Canadians employed full time and three-quarters of part-time employees have no insurance for prescription medications. In addition, many drug plans provided by employers have maximum coverage thresholds and a limited range of therapeutic options, so even when they are covered by private insurance sometimes they find the options they need unavailable to them.
With the number of Canadians working part time increasing and many employers reducing drug coverage in insurance plans, fewer Canadians are covered for their necessary medications through their jobs. We need to do better for these underserved Canadians who are forced by circumstance to choose between putting food on the table and taking their medications.
The Canadian drug system does not provide equitable coverage between geographic regions. Drug availability differs among provinces because the country lacks a common formulary. Coverage of necessary and cost-effective essential medicines needs to be universal without geographic barriers.
Finally, we need to address the cost of medicines in Canada. While there has been some great cost-savings as a result of patent expirations and shifts toward generic use, research shows that generic drugs in Canada are more expensive than in foreign comparative markets, with only Switzerland outpricing Canada.
Recognizing the importance of drug access, the World Health Organization has declared that all countries are obliged to ensure equitable access to necessary medicines through universal health coverage. Canada is uniquely the only developed country with a universal health care system that does not cover prescription drugs. In 2012, the United Nations unanimously endorsed a resolution advising governments to ensure universal health access to quality health care without financial hardship, yet Canadians continue to experience such financial hardship around access to medicines.
It's time for Canada to fill a gap in our health care system and truly provide universal health care for all. The Heart and Stroke Foundation believes in the values of universality, equity, and equality in our health care system. All people living in Canada should have equitable and timely access to necessary prescription medications based on the best possible health outcomes rather than their ability to pay. The solution needs to be made in Canada, addressing our specific context and needs, while learning from the success of pharmacare programs elsewhere in the world. Building a national pharmacare plan will ultimately improve drug adherence, reduce the burden on the health system, and create a healthier, more productive population.
We call on the Government of Canada to take a leadership role in addressing the aforementioned issues, and we have a number of recommendations that can help move us forward. In particular, we recommend that, first, the Government of Canada create an advisory panel that would inform the development of comprehensive, evidence-based, and pan-Canadian pharmacare standards, which include universal and equitable access to essential medicines.
Second, we recommend that the federal, provincial, and territorial governments come together for collective negotiations to reduce the costs to the health care system and increase access to needed medications. Third, we recommend that the Government of Canada take a leadership role and share the cost of implementing pharmacare standards with the provinces, and fourth, that the health charities and the Canadians they represent be invited to participate in federal, provincial, and territorial consultations to support the development of pharmacare standards that meet the needs of all Canadians.
In conclusion, we are confident that in working together across sectors and levels of government, with the inclusion of the patient voice, we can create a drug system for Canada that is truly universal, equitable, and leaves no Canadian behind. The Heart and Stroke Foundation will continue to advocate for progress on this issue, and we are ready, willing, and able to work with the federal government and other health charities to ensure that Canadians of all backgrounds have access to affordable and necessary prescription drugs.
I thank you for your time today.
Good morning, Mr. Chair. Thank you very much for the invitation to speak with you today. Just by way of disclosure, I'm the principal investigator in a CIHR team grant evaluating policy and reimbursement decisions around rare disease. I'm also a member of the B.C. Ministry of Health advisory committee for expensive drugs for rare diseases.
I'm going to talk to you today about my perspective and my experience specifically around orphan drugs and rare diseases.
In my discussions with provincial payers, particularly in B.C. as that's where my experience is, they have raised four key areas of concern, particularly around evidence, price, access, and communication and transparency of decisions in general, and specifically as these relate to reimbursement decisions for drugs for rare diseases.
We are in the midst of a paradigm shift and really a disruption in drug development, where we're moving from the blockbuster model and biologics to more niche products, targeted products around orphan drugs and rare diseases. This disruption has resulted in exorbitant costs of many of these drugs for rare diseases, in the order of millions of dollars per year per patient, for lifelong treatment. Now, with others in the pipeline, we're seeing prices in the order of $2 million to $3 million potentially, and the cost just seems to be continually pushed higher.
With new technology and incentives, the number of drugs in the pipeline with potential orphan indications continues to increase, which is a good thing, offering new treatments for our patients, but which will obviously bring further pressures on our system. Given the costs, it's obviously not feasible for any Canadian to be expected to pay out of pocket for these drugs if they are not insured benefits. Therefore, I think we also need a bold paradigm shift or disruption in our policy and reimbursement decision-making.
Now in Canada we know we have the common drug review, and more recently, the pan-Canadian pharmaceutical alliance. The common drug review was implemented with the specific objective of providing evidence of value, efficiency, and consistency of evidence evaluation across the provinces. The pan-Canadian pharmaceutical alliance was initiated with the objective of having a strategy for collective negotiation on drug prices by the provinces following CDR review. The theory is that this would result in greater cross-country equity. However, such is not always the case. Even in cases where pricing and product listing agreements haven't been reached with pharmaceutical manufacturers by the pCPA, some provinces have chosen to fund some drugs, resulting in inequity of access.
In a recent study of 2,600 Canadians, we asked Canadians what they felt were the most important considerations related to funding of new drug therapies. The top five considerations were the effect of the drug on quality of life, the effect on length of life, the safety of the drug, the ability of the drug to really work, and the severity of the disease that it's meant to treat. Those were the top five related specifically to the drug and the disease.
The next most important factor, however, was equity of access for minority populations, and in a more recent study, we found that equity across provinces was also very important. So despite the common drug review and the pCPA, we know Canadians do not have equal access to all treatments. However, for common diseases or even cancers, there are generally alternative therapies such that most patients are not necessarily left completely untreated, notwithstanding some of the comments we just heard this morning about the ability to pay and about the ability to get coverage. This is specifically speaking about equity.
For many rare diseases, however, there is generally only one therapy. Thus with different coverage decisions across provinces, there is truly differential access to treatment. I'm not suggesting that all treatments should be available to all patients across all provinces, whether they be for a rare disease or a common disease, but that the development of a national pharmacare program would prevent this from happening. All patients in Canada would either get access or no patients would get access, based on a transparent, consistent, evidence-based decision-making process, thus, evidence-based equity of access across all provinces.
We already have evidence of such a program having worked for a rare disease, specifically Fabry disease, with the Canadian Fabry disease initiative or CFDI. This initiative was conceived due to the inability of Nova Scotia to pay, given the high prevalence of Fabry disease in that province.
This is an initiative that, as I understand it, was initially funded as a partnership among provinces, the federal government, and the pharmaceutical industry, with two primary components: drug procurement for the entire country and data evaluation, data collection, and the development of a patient registry. As a result, we have an example of equal access. Only eligible patients receive treatment, based on guidelines and excellent data on the treatment effects and the natural history of Fabry disease, which contributes significantly to reducing the trepidation and uncertainty around treatment coverage decisions.
This initiative, I believe, could act as a model for other rare diseases as part of a national pharmaceutical strategy, given that this model provides a data collection platform to inform research, evaluation, and decision-making and supports evidence-based decision-making. It supported procurement and pricing negotiations. Also, in this environment, I think it could provide an opportunity for notice of compliance with conditions or reimbursement with evidence development, which we know lots of people are talking about but which we really haven't seen implemented in any situation yet.
This also speaks to what is included in the proposed Canadian orphan drug framework, specifically a post-marketing authorization plan, which I feel is imperative, given the limited evidence on the efficacy of these drugs when being reviewed for market authorization. Although I have been skeptical about how this could occur in the current regulatory and reimbursement environment, given the separation between federal and provincial responsibilities, a national strategy with an active post-marketing authorization pharmacovigilance plan would provide a framework that supports the growth of the evidence base. Economies of scale of a single system could be implemented across multiple rare diseases, resulting in system efficiencies. It could also provide a framework or a platform for international collaboration, and of course a national platform for price negotiation.
In closing, a national strategy for reimbursement, which could be the start of a national pharmacare strategy, would support equity of access or non-access, depending upon the evidence; system efficiencies on multiple levels; and potential earlier access to therapy for patients, given in an environment to support notice of compliance with conditions or reimbursement with evidence generation. It would support evidence-based, consistent reimbursement policy and decision-making, spending only where spending is warranted, and improved transparency and communication around systems and reimbursement decisions.
I would like to thank you, once again, for inviting me, and I hope I have provided you with some insightful comments for your deliberations.
Thank you very much, Mr. Chair.
I thank the witnesses for being here today.
We've had a lot of witnesses who are really putting forth one type of model, a monopolistic type of model, moving forward in Canada. I have had some challenges with the study we're doing because I don't see a lot of contrarian views, but I see you have brought up a few interesting points I would like to investigate a little further.
My first question would be to Dr. Lynd. My colleague asked if there's a system out there that is an example we could look towards. In Canada, we're trying to define who are the Canadians who are really having problems with it.
If you look across the world, you see the U.K. has put in a system that looks like more of a monopoly, but if you look at the results, there are certain restrictions on certain medications that are available in other parts of Europe. The U.K. has a worse cancer survival rate than these other countries. New Zealand has a monopolistic system. You actually see people from New Zealand moving to Australia just so they can get the drugs they need.
You mentioned that if we do put in a system like that, it really is going to affect choice. In other words, everybody gets it, or no one gets it. As a Canadian, if I pay into a system for years, and it comes to a point where I need medication—you're the expert here on rare diseases—would you say it's even fair if some bureaucrat is making the decision that I can't get these drugs covered under a system I paid into my whole life?
That's something we have to look at as well.
Again, I like the contrarian viewpoint. I think, Ms. James, you are one of the few witnesses we've had here.... You talked about heart and stroke and the emphasis you have on behaviour and lifestyle interventions, I think you said, and healthy living strategies.
What I find problematic.... In one of the contrarian viewpoints in your appendices, Mr. MacLeod, one person said we should be having this as providing a health benefit not necessarily a drug benefit.
Ms. James, in a national pharmacare program we would cover statins for life. We would cover blood thinners. We would cover blood pressure medication. Has your organization ever done a study, where if you can get people to take preventative measures—exercise, diet—how much of a cost saving that would be? Because if we're trying to get together for healthier Canadians, I think we should take a more holistic viewpoint of it.
My background is that I'm a chiropractor. I think you should look at natural interventions first before people get into drugs, but if we have a system in place like this, the easy thing to do is to take a drug.
Has your organization ever done a study on cost-effectiveness, on not going the drug route and saying, let's pay for interventions that may change lifestyle, change a person's weight? Have you ever done something like that?
I want to begin by thanking the citizens' panel for the work that you've done. To come out of your homes and take on this study as volunteers is a wonderful accomplishment and the time and energy you've put into it is quite remarkable, so thank you very much for that.
The committee has been talking about this topic for some time now. I have been asking myself how to keep this as simple as we can. To me, the basic transaction is that a Canadian meets with a caregiver, doctor, nurse practitioner, then a prescription is written, and then they go into a pharmacy and receive the drug. There may be a small, flat dispensing fee, maybe a copayment to be determined, but they receive the drug, they go home, they take it, and—presto—25% of Canadians get what the other 75% have, that is, access to drugs.
For the pharmacists, there's a win. Instead of dealing with hundreds of private insurance plans, they have one organization they contact for reimbursement and for their fee. The first complexity, though, is what would be permitted and what prescriptions they could go in with. I heard slightly different views here from Larry and Peter.
The World Health Organization has already come out with a list of essential drugs. I think you recommended that the essential drugs are there. This is pretty simple; it's the Pareto principle. Eighty per cent of prescriptions are going to be coming from about 20 per cent of the available drug pool. Most of those are already in generics. Most of them are already under pretty aggressive pricing models. This should be a simple list to start with.
Then we add in the rare disease drugs and the other ones as we go forward and then we think about how to compensate it. The first thing is the establishment of that essential drug list. CADTH has said they think they could manage it. Did you have any thoughts on a new agency or letting CADTH take that on?