This motion is being presented to this committee as though it somehow advances the rights of people who are members of Parliament in my position, that being a member of a party with fewer than 12 MPs, or an independent MP. It is in fact exactly the contrary. It is all about an abuse of power by a majority party to restrict the rights of smaller parties.
In the last Parliament, members of the Liberal Party and members of the New Democratic Party voted against this very same motion restricting the rights of people in my position, people who are members of a party with fewer than 12 MPs.
As for the origins of this, to go back to it briefly, the ability to present amendments at report stage used to be unrestricted for any member of Parliament, but in 1999 the Reform Party brought forward over 700 amendments. They were mostly frivolous and dilatory, but their intention was to stall the Nisga'a treaty.
It took a couple of years for the governing party of the day, the majority Liberals of the day, to change the rules to say that if you, as member of Parliament, had an opportunity to put forward a motion, an amendment, in committee, you did not have the right to put forward an amendment at report stage. Just to repeat that, members of recognized parties at that stage had the rules changed so that you could not put forward a substantive amendment at report stage because you had a right as a member of a committee. That meant that those of us in smaller parties who can't sit on committees as full members still had this right to bring forward a substantive amendment at report stage.
I think I'm the only MP who ever discovered that this was the case, and I used it in the 41st Parliament to bring forward important amendments. As I said before, my rights in this regard were supported by the Liberals and the New Democrats.
In the fall of 2013, the Conservative majority brought forward this new idea. Rather than change the rules as we find them under O'Brien and Bosc, every single committee passed an identical motion. The effect of this was that I and all members of Parliament in my situation would then be invited to show up to committee. This was really coercion, not invitation. I would present amendments, sometimes with 60 seconds to defend my amendment, and was not allowed to answer questions about it after the fact.
The effect was that if two committees were meeting at the same time at clause-by-clause, which often happens, I'd be running from committee to committee to try to meet the invitation from committees to get my amendments in and considered. It is an enormous imposition of additional work for the sole purpose of depriving members of Parliament from smaller parties of being able to present amendments at report stage.
It's an abuse of power, and I have to say that it's heartbreaking to see it being done again. Such motions by the committee die at the end of every Parliament, which is why every single committee is being asked today to pass the former majority Conservative motion through committee. I would beg of you: please don't pass this motion.
May I attempt to answer Don's question?
I've lived with this, and believe me, after several points of order and arguments with the Speaker in the 41st Parliament, there's a distinction at report stage between a substantive amendment and a deletion.
Any member of Parliament, including a member of a non-recognized party, after the so-called opportunity created by this oppressive motion, will still have the right to present deletions at report stage. With this motion in place, no member of Parliament would have the right to present substantive amendments at report stage, whether they had been tabled before committee or not. That's the distinction.
The ability that was supported by the Liberal and New Democratic Party, for instance, with regard to the spring omnibus budget bill of 2012.... This motion is the direct result of an attempt to punish me by the previous Conservative majority for fighting effectively against Bill in legion with Liberal and New Democratic Party MPs who did not want to see the damage that would happen due to Bill C-38. I put forward 423 amendments to Bill C-38, the omnibus budget bill. The Speaker grouped them and we voted. Voting took 24 hours straight, and that's why they brought forward these motions.
First they—in this case Peter Van Loan—tried to get the Speaker to rule that members such as me would have one amendment pulled out of the pack. If that one amendment failed after being put to a test vote, none of the rest would be heard. The Speaker said that it violated the principle of this being a parliamentary democracy, and so that was rejected.
However, the Speaker opened the door by saying, well, if there's some opportunity created.... We've now tried this so-called opportunity and the Speaker said it would have to be satisfactory to members. It's certainly not satisfactory to me. I've lived with it since the Fall of 2013 and it's really very difficult running from committee to committee.
I hope that answers Don's question. Yes, anyone can put forward amendments as deletions at report stage, but nobody can put forward substantive amendments if this motion passes.
Thank you, Mr. Chair. I'll be going first. Then it will be Mr. Dempster, and Mr. Sher will be batting cleanup.
Good afternoon. My name is Neil Palmer. I am president of and principal consultant with PDCI Market Access. Appearing with me today is Dylan Lamb-Palmer, manager of health economics and analytics at PDCI.
The opinions expressed today are strictly our own. We are not here to advocate on behalf of any third party. Although our clientele are often pharmaceutical manufacturers, we are not advocates for the pharmaceutical industry; however, our consulting work provides first-hand insights into the mechanics of pharmacare in Canada, experience that underpins our policy and research activities, including our studies on the cost of national pharmacare.
By way of background, I have more than 30 years' experience in the health care sector, including six years with the Patented Medicine Prices Review Board, where I was involved in the development and application of the PDCI pricing guidelines, most of which are still in effect today. I also have significant experience with the international pricing and reimbursement of pharmaceuticals and give lectures on that subject matter at the University of Southern California graduate program in health care decision analysis.
As you know, PDCI was commissioned by the Canadian Pharmacists Association, or CPhA, to prepare a cost study of national pharmacare and address the findings of the Morgan et al analysis that was published in the CMAJ and reproduced in the Pharmacare 2020 report. We also assessed pharmacare alternatives that provide universal coverage without dismantling or disrupting our current pan-Canadian health care system.
In our view, the national pharmacare discussion should be based on thorough and thoughtful analyses informed by a range of perspectives, expertise, and experience, and open to respectful consideration of a range of policy options. We believe it's important to begin by identifying the problems that national pharmacare is intended to solve, so let's start where there is general agreement.
First, there is a coverage gap. Not all Canadians have access to the prescription drugs they need, and costs may be a barrier for patients, even those with basic coverage. Figures of 10% to 20% with no coverage or inadequate coverage are frequently cited. However, the underlying data supporting these figures is weak and generally based on unreliable opinion surveys. That 10% to 20% could be underestimate or an overestimate. Either way, we need to know.
We need to know because it's not possible to make informed policy recommendations and decisions when there is such uncertainty. This is an area where the federal government can make a vital contribution. The federal government should commission Statistics Canada, Health Canada, or an appropriate outside agency to conduct a thorough, comprehensive survey of prescription drug coverage in Canada. The study should also examine the extent to which deductibles and copayments are barriers to access.
Second, prescription drug coverage should not depend on where you live. Comparable coverage should be available throughout Canada, but coverage need not be identical. Much like our provincial health care systems, which all respect the core principles of Canadian medicare, they are similar but not identical.
This is an important point. Unlike other countries, Canada does not have a national health care system, and here there is a disconnect. National pharmacare makes sense in the context of a national health care system, but we do not have a national health care system. Moreover, national pharmacare is proposed with further decoupled responsibilities for drugs from health care funding. This will only exacerbate the silo funding mentality. The more detached pharmacare is from the provincial health care system it serves, the less informed its decision-making.
Next, I would like to discuss the concept of a national formulary, something that is often proposed as an integral part of national pharmacare. Our analysis suggests that greater than 90% of drug products are common to all plan formularies or are made available through alternative programs in the particular province, such as through a cancer agency, so a national formulary would largely replicate what is already in place.
Nevertheless, it would be useful to conduct a thorough comparative analysis of benefits on provincial drug benefit plans and programs to assess the degree of commonality and identify the therapeutic areas where there is discordance. This is a study that could be undertaken by the national prescription drug utilization information system, NPDUIS, by the Canadian Institute for Health Information, or by IMSL.
The third area of agreement is that the selection of prescription drugs for reimbursement should be evidence-based. In fact, to varying degrees, the provincial drug plans have always applied an evidence-based approach. Since 2003, new drugs have been reviewed—except in Quebec—by the common drug review of the Canadian Agency for Drugs and Technologies in Health, or CADTH. The process of CDR consists of a thorough examination of clinical and cost effectiveness and provides consistent evidence-based listing recommendations to the provinces. In Quebec, INESSS provides a similar evidence-based approach for listing drugs in that province.
The fourth area of agreement is that significant buying power is essential for negotiating the best prices for the public drug plans. With modest beginnings in 2010, the pan-Canadian Pharmaceutical Alliance or pCPA now negotiates prices on behalf of all public plans, including those in Quebec and the federal plans. In fact, the pCPA is a remarkable yet unheralded public policy success story. Till recently, the pCPA had no dedicated resources and relied entirely on the drug plan managers in each of the jurisdictions, who through good will and collaboration have developed organically what has become a world-class mechanism for negotiating product listing agreements. The pCPA has completed over 100 negotiations and saves almost half a billion dollars annually, savings that will only continue to expand as every new drug is added to the pCPA process. Moreover, the pCPA is now conducting class reviews of established drugs and has lowered the prices of generic drugs to between 18% and 25% of the original brand price in most cases, benefiting all Canadians. In fact, the pCPA has become so successful that private drug plan insurers want in as well.
To date, the pCPA has not opened its doors to private insurers, perhaps because the private plans are primarily for profit, and are quite capable of negotiating their own listing agreements. For example, new initiatives to control private drug plan costs, such as Manulife's DrugWatch program, are sparking considerable interest and some controversy.
And what of the public versus private debate? Proponents of national pharmacare suggest that eliminating private drug plans could be achieved with only modest cost to government. We disagree. If public, private and out-of-pocket expenditures were to be combined into a single national plan, we estimate that the total cost savings of approximately $1 billion could be realized over total expenditures, but there would be a significant shift of spending to the public sector of approximately $8 billion in 2015.
Nationalizing private drug plans in the name of national pharmacare would not only shift significant cost to the public sector, it would also be highly disruptive for employers and employees, and at the same time provide no improvement in health status. Moreover, these benefits are negotiated in collective agreements. Unions would be unlikely to give up their drug coverage without something in return.
Morgan et al. suggest that by combining public and private systems, it would be possible to achieve Canadian prices as low as those in the U.K., even though the U.K. has a much larger population and a much different mechanism for funding drugs. In England there are 209 clinical commissioning groups or CCGs. CCGs are physician-led statutory health organizations responsible for the planning and commissioning of health services for their local area. Each CCG maintains its own formulary and is assigned a fixed drug budget. There are some concerns with the U.K. approach. Although fixed budgets help control costs, they can be a barrier to the uptake of new medicines. As a result, U.K. physicians are slower to adopt new medicines into their practices, and this has been an area of concern, particularly for cancer drugs.
In the face of considerable ongoing criticism, the government was forced in 2010 to establish a special cancer drugs fund in addition to the regular funding mechanisms in England. The impact of poor access to drug plans regularly makes headlines in the U.K. including those in a recent article in The Guardian that highlighted the findings of a comprehensive review article in The Lancet, a leading medical journal. The Lancet study concluded that five-year survival rates for U.K. patients across a wide range of cancers trailed those for most leading nations, including Canada.
It's important to consider international price comparisons in context. Morgan, citing PMPRB, points to prices in the U.K. being 23% lower than in Canada. This 2013 figure is highly sensitive to exchange rate yet accounts for almost two-thirds of the savings proposed by Morgan. One year later, in 2014, U.K. prices were 14% lower than Canadian prices, according to the PMPRB, a change of 9%, or almost $2 billion of Morgan's savings lost in just one year.
A more robust analysis would have taken into account the volatility of exchange rates and considered purchasing-power parities instead of market exchange rates.
To the extent that pharmacare policy decisions are to be informed by international price comparisons, it's critical that there be proper context with transparent discussion of the underlying exchange rates, health care systems, and appropriate sensitivity analysis. The PMPRB already limits Canadian prices to international comparators. The PMPRB also limits prices of new drugs to prices of other drugs in the same therapeutic class, and limits price increases to inflation. In fact, Canadian price increases typically average less than one percent each year.
However, to some the PMPRB has lost its relevance. Nevertheless, the PMPRB is an important component of pharmaceutical cost-containment in Canada. The federal government can do its part by clearly defining the PMPRB's mandate so that it realigns its priorities to be in line with the priorities of the provinces, pCPA, private plans, and consumers, and by removing the jurisdictional uncertainty that leads to unproductive litigation. Parliament and not the courts should determine PMPRB's mandate.
In summary, we have an evolving pan-Canadian version of pharmacare, one that's integrated into the underlying provincial-territorial health care systems that pharmacare serves. There's still much work to be done. All Canadians must have access to affordable drug coverage, and as I have already suggested, we need a comprehensive study to assess and address that coverage gap.
Similarly, we need to assess if there are any important disparities in terms of drugs that are covered across jurisdictions. These are initiatives where the federal government can take a leadership role.
Finally, the focus of Canadian pharmacare discussion should be to extend and improve coverage to those within adequate coverage, not weaken the drug benefits of the large majority of Canadians that currently have good coverage.
My name is Bill Dempster and I'm CEO of 3Sixty Public Affairs, a health policy and advocacy consultancy.
My colleagues and I have practical experience with pharmacare programs, government policy, and pharma industry stretching back to the mid-1980s. We contribute to peer review publications, policy magazines, and industry journals on a range of issues relevant to this study.
I want to thank the committee for inviting me to share my point of view on a national pharmacare program.
I've been invited here to talk in particular about bulk purchasing and cost containment. I'm here as an individual to share my personal observations, and I want to focus my remarks on a lot of what Neil touched on in regard to the pan-Canadian Pharmaceutical Alliance, by reviewing where the pCPA fits in the process, how it works, and the impacts it has as a cost-control tool and policy. I'll also touch on how other payers, including private insurers and hospitals, control costs using similar mechanisms. I'm going to make some references to some figures and graphs that I've prepared in a PowerPoint deck in both languages.
Hopefully, I'm going to help the committee better understand the evolution of pCPA and how it can fit into the federal government's approach to pharmacare and understand a little more about how other payers also control costs using similar mechanisms.
I would invite you to look at page 2 of my handout which shows where the pCPA fits. You've already heard from Health Canada and the federal price watchdog, the PMPRB, as well as the Canadian Agency for Drugs and Technologies in Health, or CADTH. It is after the review by CADTH or Quebec's health technology assessment agency, INESSS, where pCPA picks up a new drug for potential negotiations with manufacturers.
Operationally, the pCPA secretariat is housed in Ontario's health ministry, with five staff, but the bulk of the work takes place across the country, as every week federal, provincial, and territorial public drug programs hold teleconference calls to discuss current negotiations and review recent evaluations to determine whether or not to enter into talks on a new medicine.
If pCPA decides to negotiate, one representative jurisdiction is chosen to lead the talks and be the primary point of contact with the manufacturer. It's like collective bargaining or multi-level negotiations. That lead jurisdiction actually has to get the consensus of all of the other jurisdictions that are involved in that discussion in order for a deal to be secured. I use the term “deal” loosely because there is no legally binding agreement. They are negotiating a letter of intent that all participating governments are expected to implement.
Most deals are a simple price discount, which operates as a rebate that will be paid back to each jurisdiction. However, it's not always about price. I think there's room to expand what the pCPA can do. In fact, the pCPA has said it is open to and has concluded negotiations on issues like health outcomes and utilization caps for ongoing research.
What are the primary interests of the parties in these negotiations? Well, beyond patient access to new health products and improved health, which both parties are looking for those, the drug plans want greater budget and clinical certainty and, ideally, savings. The manufacturers are looking for a fair price and greater revenue certainty. The time it takes to negotiate varies widely from a few months to over a year in some cases, and now there is a large volume of new products coming through the system, which is already stretched. This is causing a backlog. There are around 20 drugs that have CADTH recommendations, but there's no decision on whether to negotiate.
The pCPA is also looking at multiple products in the same class of drugs, some of them older medicines that have been on the formulary or that have come due for renegotiation. The pCPA is also responsible for administering the reimbursed and transparent prices for generic drugs; and as my fellow panellists said, prices for generics are set at progressively lower percentages of the innovator price. It can be as high as 85%, but it can go down to 18%. Most payers benefit from these transparent generic drug prices.
How do other payers, including private insurers and hospitals, operate? Well, there are just three private health benefit providers that account selectively for two-thirds of the big private market, and there are dozens of smaller private insurance companies. All of them are ramping up negotiation capacity on their own, as are smaller providers.
Private insurers can offer literally hundreds of different types of drug benefit plans based on the needs and capacities of their clients, which, in general, are employers, unions, and affiliated groups, but they can also be individuals. Private payers have also long used the valuation committee to provide reimbursement advice, and manufacturers prepare and submit lots of data to these payers as well.
Not all private plans are open formularies. As you might have heard previously, a growing number are actively managed with a range of cost-control mechanisms.
Private health benefits are highly valued by most Canadians. They cover 24 million of us, including, I would imagine, every person around this table. For employers they're an essential part of a competitive compensation package. How about hospitals? Well, they too have drug evaluation committees and can often negotiate alone or as part of group purchasing organizations, depending on the province.
Let's go back to the pCPA and talk about what it has achieved. As my fellow panellist said, as of last month the pCPA had successfully negotiated a milestone 100 medicines and uses of medications. The half a billion dollars in annual savings announced last year has to be much higher today. There are 40% more negotiated products through the system and there are even more generics listed at the lowest price level.
To get a snapshot of these savings, I'd ask you to turn to page 3 of my handout. As you can see, we compared the provincial reimbursement rates today with those of a decade ago, in 2006 before the introduction of any provincial capacity to negotiate with manufacturers. Ten years ago, 103 new drugs, drug uses, or formulations had come to market in the previous 24 months. For those, only two provinces had reimbursed or listed more than 30% on their public drug programs, and the average was less than 20%.
Fast-forward to the end of last year with the pCPA in full swing. There are at least three things that I think we can pull from this data. First, a lot more products are coming to market, nearly 200 compared to half that a decade ago. Second, Canadian patients can now access many more new drugs, double the number of 10 years ago, and the proportion of new drugs has jumped from less than 20% to over 30% on average. Finally, there is more consistency across the plans. Look at the line graphs on the right and you will see that there is much less variability across plans today. This is looking a lot like a de facto national formulary.
However, these graphs don't tell you the aggregate value or price reductions. Those are really hard to figure out, because a lot of the prices are confidential. These are based on individual negotiations, but for a glimpse of that, I would direct you to page 4 of my handout. Let's look at the total amount spent by provincial governments on prescription drugs in recent years. You'll see that since 2011 when the pCPA really started, spending by governments levelled out and even dropped as a share of total health spending. So governments are spending roughly the same amount, or even less when you consider inflation, population growth, and aging, but Canadians who depend on public drug plans have access to many more medicines. It tells us that prices must be coming in at significant discounts.
We've talked about how the pCPA works and shown how the pCPA adds value, achieves better prices, and increases consistency across government programs, but I want to provide a quick analysis of the pCPA beyond economic issues.
Here are some other positive aspects of pCPA. In addition to taking part in government collaboration, the office is willing to consult and engage with all stakeholders, and it has set out some very patient-centric principles drawing on the cancer review system. However, the pCPA still has some challenges, and I'll just touch on a few. First, in terms of transparency, the public doesn't know which jurisdictions have taken part in any given deal. Second, there are no timelines for the various steps, although the office of the pCPA is developing a negotiations playbook, and they hope that some elements and timelines are clarified in that. Third, provinces don't always reimburse quickly or at all following the conclusion of a negotiation. For them the negotiated deal or letter of intent appears to be an option to reimburse and not a commitment to reimburse, and that probably limits the level of discount the manufacturers can offer. Fourth, the backlog I spoke of earlier is delaying access to important new therapies and there is a cost to patients and the health care system in those delays. These issues need attention.
Now that the federal government is involved in the pCPA and more engaged with the provinces on health care in general, Ottawa could inject funds to increase the capacity of the pCPA to move products through the system, improve transparency, improve timelines for quick reimbursement decisions after negotiation has been completed, and even play a role in closing important national access gaps, such as an approach to funding drugs for rare disorders.
What does this have to do with national pharmacare? National pharmacare as a policy proposal appears to work in other countries in context, but I think there's a lot of analysis to do before we can say that it works in practice in Canada. In the meantime, all public jurisdictions are steadily building and adapting the pCPA to the Canadian federal reality. This relatively young initiative is an important and evolving contribution to national collaboration on pharmacare.
I'd like to thank all of you again for inviting me here today. I look forward to hearing from the next panellist and answering your questions.
Thank you very much, Mr. Chair, and committee members. Thank you very much for the opportunity to be back in front of this committee, this time to talk on the important topic of pharmacare.
We are here before you today because we view Canadian Blood Services' national formulary of plasma protein drugs as a made-in-Canada model that may be useful to inform the committee's discussion on national pharmacare. We believe our approach shows that bulk purchasing of pharmaceuticals can be done transparently and successfully on a national pan-Canadian scale while maintaining product choice and ensuring security of supply for all Canadians. We've also supplied the committee with a written brief that includes more details about the information I'm going to summarize today.
Let me begin by explaining what plasma is and providing a bit of context on how plasma protein drugs are made. Plasma is the protein-rich liquid in blood that helps other blood components circulate throughout the body. Plasma protein drugs or plasma protein products are a highly specialized class of drugs made from human plasma.
Pharmaceutical companies that manufacture these derivatives are called fractionators and are typically found in the United States and Europe, where these products are made by pooling large volumes of plasma donations from thousands of screened plasma donors. The pooled plasma then goes through a series of rigorous processes and tests to eliminate pathogens and other contaminants, making the finished products extraordinarily safe. A number of these plasma protein products are now synthetically manufactured by genetic recombinant technology and all of the drugs in this class of products are deemed to be expensive biological drugs for lifesaving indications.
Our organization has the sole responsibility for bulk purchasing and managing a pan-Canadian formulary of 45 brands and classes of plasma protein products. We do this on behalf of all the provinces and territories with the exception of Quebec. These drugs are worth over $600 million a year and are essential medicines in Canadian hospitals and clinics, and around the world. They are used to treat patients with bleeding disorders such as hemophilia, as well as patients with inherited and acquired immune conditions, burn, trauma victims, and many other clinical indications.
Advocates for a national drug program have argued that the lack of broad national bulk purchasing capacity creates a serious value gap for Canadians. We would agree.
While governments have indeed been able to lower the cost of some drugs through the pCPA, as we heard from both previous speakers, price is only one part of the equation. Our supply chain management and bulk-purchasing program addresses, in addition to pricing, patient outcomes, health system performance, as well as cost, and delivers layers of added value to Canadians in the process.
We achieve these benefits in several ways. Firstly, wherever possible, we carry multiple brands of a single product class. We buy these brands and classes in smaller, diverse lots. We negotiate essential safety stock agreements with every manufacturer to mitigate against any potential shortfalls or supply disruptions. Most importantly, we do this without resorting to single sourcing. At the same time, because of the national bulk purchasing power, we ensure that the prices we pay are highly competitive internationally.
Another very important factor in our process is that we build into the process input from stakeholders at all steps of the procurement process. Our program engages and involves patient groups, as well as the prescribing medical community, and gives them a voice in the decision-making on product selection and procurement, and aims to offer and ensure a reasonable degree of product choice.
As part of our product selection process, we also collaborate and draw on the expertise of the Canadian Agency for Drugs and Technologies in Health, CADTH, from whom you've heard, to provide the necessary pharmacoeconomic analysis whenever we consider adding a new category of drug to our formulary.
This collaboration is an important part of the procurement program and ensures that we add the right types of drugs to the formulary for Canadian patients. It also ensures shorter and more efficient approval times for review and ultimate decision of listing of drugs onto our formulary making access times for some of the drugs on our formulary amongst the shortest in the country.
One of the greatest successes of our program is the use of open, competitive, public tendering to get the best possible prices through multi-year requests for proposals for a single product or group of products. This public tendering process and the economy of scale we achieve by purchasing for all the provinces and territories have brought significant cost savings for funding governments. For example, in a recent round of tendering for a suite of plasma protein products, we negotiated a $600-million reduction over a five-year period for less than a dozen drugs. More recently, we were able to negotiate an additional $60-million annual reduction for two hemophilia drugs. Today we've been able to negotiate the price of drugs down to below 2009 pricing levels. These examples clearly underscore the value of a national bulk-purchasing program of expensive pharmaceuticals and, more importantly, this value is achieved without sacrificing either product choice or diversity of supply.
Once these products are purchased and available, how they're used also becomes important. We collaborate with experts in transfusion medicine and physicians and provincial-territorial governments across the country to develop clinical practice guidelines and to promote optimal utilization practices for these drugs. Our model also allows the provinces and territories to introduce their own access guidelines for individual products, which they can then manage themselves at the regional health authority or institutional level. Canadian Blood Services and national physician groups affiliated with the blood system can also develop national criteria for use. These options give the treating jurisdictions flexibility in how they manage their use of these essential, yet expensive, biological drugs.
Canadian Blood Services also independently qualifies new suppliers and audits them periodically. This process adds an additional layer of vigilance and product safety for patients. Our contracts with suppliers require them to report early and regularly any issues in bringing product to the marketplace, and to ensure they maintain adequate safety stocks in the country. This information enables us to act on any supplier issue quickly and helps mitigate the risk of product shortage.
Our procurement and legal groups are well versed in the specifics of bulk buying, which we leverage to the advantage of all the provinces and territories. These steps are an important additional layer of value in managing a national bulk-purchasing and distribution program on behalf of all jurisdictions.
Collaboration with the prescribing medical community and the hospital sector in which these drugs are used has clearly been an important part of the success of our program. We have hospital liaison specialists who maintain strong relationships with the treating community and manage any issues related to supply, product choice, or adverse events. Our on-staff medical directors provide expert advice when a physician encounters an issue with a patient who could benefit from the perspective of an additional specialist.
These cornerstones of our bulk-purchasing program are the elements that have enabled it to succeed. Taken as a whole, our model supports a level of health equity that remains out of reach for many other patient groups served by individual provincial health systems, and who may face an all-too-common postal code lottery when it comes to accessing certain medications, particularly expensive ones. In contrast, whether the patients we serve are in Vancouver, Iqaluit, or St. John's, Newfoundland, they have access to the same reliable supply of high-quality drugs at all times.
In summary, Canadian Blood Services has been providing universal and equitable access to plasma protein drugs at no cost to patients for nearly two decades. Our approach to bulk purchasing is not a cookie-cutter solution for many of the substantial challenges that must be resolved should governments enact aspects of the national pharmacare program. Rather, our experience shows that bulk purchasing can be done transparently and successfully, while maintaining product choice and security of supply.
We brought these points to the committee today to demonstrate that pan-Canadian collaboration in the complex area of drug acquisition, distribution, and utilization, can be done in a way that responds to the concerns raised by many stakeholders to the pharmacare issue.
As interested parties continue to study this complex issue, we would be pleased to answer their questions as well as this committee's and to explore any ideas further, if they are of interest.
Thank you very much.
Thank you very much, Mr. Kang, as I anticipated that this question might come from someone at the committee.
I'll be very brief, Mr. Chair, because it's an important, but obviously complex issue and it has played out significantly in the media this past week.
Canadian Blood Services follows the principle of voluntary non-remuneration of its donors, meaning we do not pay any of our donors for any of the products we collect from them whether blood, plasma, platelets, stem cells, organs or tissues. We have adhered to that policy at all times.
It is true that the amount of plasma that we collect in this country meets only about one-quarter of patient need for the important class of drugs called immune globulins, and we have to purchase the remaining required three-quarters on the international market, with most of those plasma derivatives coming from the commercial paid for-profit plasma industry in the United States.
If you look at the finished drugs that patients in Canada receive today, about three-quarters of those drugs come from paid donors and about one-quarter come from our plasma, which is from unpaid donors.
There is no safety concern with respect to the difference between products from paid and unpaid donors. The technologies, from a processing and a sterilization point of view, are exactly the same in all industries and there has not been a single case of disease transmission through paid plasma products or unpaid plasma products for the last three decades, almost 30-plus years now.
The issue that has been very dominant in the media of late hinges on two things. Firstly, a—
My answer—and I suspect Mr. Dempster's will be similar—is that these are objective answers that are not opinions or advocacy. That's in response to the question.
There are probably about 100 new products a year. It varies. It could be 50 or 150 that are approved in Canada every year and are new chemical entities. All or most of these, if they're outpatient drugs, would work their way through this common drug review or the pan-Canadian oncology drug review process—one or the other—or the INESSS process in Quebec.
If they get a positive recommendation—let's say two-thirds of them end up with a positive recommendation—then they would move on to the pan-Canadian Pharmaceutical Alliance for a price negotiation. In terms of new medicines every year, a ballpark estimate is that there are somewhere between 50 and 150 new products every year, which the jurisdictions would sort through, depending on how many of these come up.
In terms of the older products, I think Ontario has something like 3,000 or 4,000 products on its formulary. I'd have to go back and check. Most of those are old generics. As Mr. Dempster and I mentioned, there are pricing rules that are in place covering all of those.
For some of the other drugs that are off patent, likely they're subject to generic competition. That leaves some drug categories that the pCPA is now looking at in terms of class reviews. They're taking DPP4s, which are a form of diabetes drugs, and looking at a class now, and they're negotiating with all of the manufacturers that market drugs in that class to come up with lower prices.
They're doing it strategically. They're doing all new products, and then they're looking back strategically at some older products in classes. That's the approach they're taking.
In terms of what the reaction in the pharmaceutical industry is, I think there's a tepid acceptance of the process for new drugs, in the sense that they hope it advances the process for getting a drug listed. There's a lot of anxiety about looking back at some of the classes and negotiating prices after the fact. I expect that you may hear some testimony on that at some point.
Let me start with the beginning of your question, which is why unions would reject it.
We don't have to look any further than British Columbia. Some of the unions there, the public service unions, accepted what they called a pharmacare tie-in type of plan, all being told that the plan was just as good as what they already had, and quickly found out that this wasn't the case. There were a large number of grievances, payments, and exceptions made to the so-called pharmacare plan because some members didn't have it.
What I'm suggesting, sir, is that if you take the plan away, people aren't just going to agree with it.
In some cases with the private plans, is it possible to have more appropriate prescribing? Certainly, and it's the same with the public plan. I don't think that's necessarily determined by whether it's public or private.
To come back to your earlier question, I think that, whether through the private sector or the public sector, every Canadian should have access to an affordable drug plan. I leave it either to this committee's making recommendations or to the individual provinces getting together, but there are clearly coverage gaps, and they need to address those. I think there's a great opportunity for the private insurance industry, which frankly I think has missed the boat on this, but as well for the public plans to provide a basic plan.
In Alberta, anyone can sign up to the provincial drug plan just by paying the premiums. Quebec has coverage. Now, they have issues with their model, but.... There are models out there, and I think we can get to a point where everybody has coverage.
I can speak to countries where the population is quite heavy. France is an example. A lot of people wouldn't be happy with the French model even though, if you did a survey of the population, it's probably one of the most liked.
They have a significant copayments, but most of the population has private insurance through Mutuelle de France.
They cover many more drugs than most other markets, but they have a very significant process for negotiating agreements with the manufacturers. They negotiate price volume agreements. I think one thing they do quite well in France—and we're starting to see it in Germany and some other markets—is to assess the relative value in two ways for drugs.
First, they look at the basic benefit of the drug, which they call service médical rendu, and then they look at the improvement the drug offers, called amélioration du service médical rendu. They use these two elements to decide what price point they will accept, and whether or not the drug should be reimbursed. They've been doing this for a long time, and they do a very good job of it. Most drugs end up being reimbursed there, with the exception of some very expensive drugs which get funded through an alternate process. It's quite different.
The Germans, and some of the other markets, have a social insurance type of system. As a result, almost all of the insurers are private—most of them not-for-profits. It's the same, I believe, in the Netherlands and Japan. In many other places, they rely on that completely. In Germany, if a drug is approved by the European Medicines Agency, it has to be reimbursed. All they can do is negotiate the price, and they do that.
I'm not suggesting that there's one country we should emulate, but there are best practices in many of these markets we can look at, not only in terms of getting cost-effectiveness in Canada and limiting the budgetary impact, but also to ensure that there is good access to drugs. Every system has pros and cons, strengths and weaknesses.