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37th PARLIAMENT, 2nd SESSION

Standing Committee on Health

EVIDENCE

CONTENTS

Wednesday, October 1, 2003

0905

The Chair (Ms. Bonnie Brown (Oakville, Lib.))

Mrs. Sherry McKinnon (Executive Director, Saskatchewan Division, The Arthritis Society)

Mrs. Anne Dooley (Vice-President, Canadian Arthritis Patient Alliance)

0910

The Chair

Mrs. Sherry McKinnon

The Chair

Mr. John McConnell (Individual Presentation)

0915

0920

0925

The Chair

Mr. Réal Ménard (Hochelaga—Maisonneuve, BQ)

Mrs. Anne Dooley

Mr. Réal Ménard

0930

Mr. John McConnell

0935

Mr. Réal Ménard

Mrs. Anne Dooley

The Chair

0940

Mr. Greg Thompson (New Brunswick Southwest, PC)

Mr. John McConnell

Mr. Greg Thompson

Mr. John McConnell

Mr. Greg Thompson

Mr. John McConnell

Mr. Greg Thompson

0945

Mr. John McConnell

The Chair

Ms. Carolyn Bennett (St. Paul's, Lib.)

Mrs. Anne Dooley

0950

Ms. Carolyn Bennett

Mrs. Anne Dooley

0955

The Chair

Ms. Carolyn Bennett

Mrs. Anne Dooley

The Chair

The Honourable John Nilson (Minister of Health, Government of Saskatchewan)

1000

1005

1010

1015

1020

The Chair

Mr. Réal Ménard

The Chair

Mr. Réal Ménard

The Chair

Mr. Greg Thompson

1025

Hon. John Nilson

Mr. Kevin Wilson (Executive Director, Drug Plan and Extended Benefits, Saskatchewan Health)

Mr. Greg Thompson

Hon. John Nilson

1030

Mr. Greg Thompson

The Chair

Mr. Réal Ménard

Hon. John Nilson

1035

Mr. Réal Ménard

Hon. John Nilson

Mr. Kevin Wilson

Mr. Réal Ménard

1040

Mr. Kevin Wilson

Hon. John Nilson

Mr. Réal Ménard

The Chair

Ms. Carolyn Bennett

Hon. John Nilson

Ms. Carolyn Bennett

Hon. John Nilson

1045

Ms. Carolyn Bennett

Hon. John Nilson

Ms. Carolyn Bennett

Hon. John Nilson

Ms. Carolyn Bennett

Hon. John Nilson

1050

Mr. Réal Ménard

Ms. Carolyn Bennett

Mr. Kevin Wilson

Ms. Carolyn Bennett

Mr. Kevin Wilson

Ms. Carolyn Bennett

Mr. Kevin Wilson

Ms. Carolyn Bennett

Hon. John Nilson

Ms. Carolyn Bennett

The Chair

1115

Mrs. Margaret Akan (Manager, All Nations Hope AIDS Network)

1120

1125

The Chair

Ms. Kathleen Storrie (President, Community Health Services Association (Saskatoon Community Clinic))

1130

The Chair

Mr. Dale Holmberg (President, Saskatchewan Health Coalition)

1135

The Chair

Mr. Réal Ménard

Mr. Dale Holmberg

Mr. Réal Ménard

Mr. Dale Holmberg

1140

Mr. Réal Ménard

Mr. Dale Holmberg

Mr. Réal Ménard

Mr. Dale Holmberg

Mr. Patrick Lapointe (Administrator, Community Health Services Association (Saskatoon Community Clinic))

1145

The Chair

Mr. Greg Thompson

1150

Ms. Kathleen Storrie

Mr. Greg Thompson

Ms. Carolyn Bennett

Mr. Greg Thompson

Mr. Patrick Lapointe

Mr. Greg Thompson

Mr. Patrick Lapointe

Mr. Greg Thompson

The Chair

Mr. Patrick Lapointe

Mr. Greg Thompson

Mr. Patrick Lapointe

Mr. Greg Thompson

1155

Mr. Patrick Lapointe

The Chair

Ms. Carolyn Bennett

Mrs. Margaret Akan

Ms. Carolyn Bennett

Mrs. Margaret Akan

Ms. Carolyn Bennett

Mrs. Margaret Akan

Ms. Carolyn Bennett

Mrs. Margaret Akan

Ms. Carolyn Bennett

1200

Mrs. Margaret Akan

Ms. Carolyn Bennett

Mr. Patrick Lapointe

Ms. Kathleen Storrie

The Chair

CANADA

Standing Committee on Health

NUMBER 053

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, October 1, 2003

[Recorded by Electronic Apparatus]

¿ (0905)

[English]

The Chair (Ms. Bonnie Brown (Oakville, Lib.)): Good morning, ladies and gentlemen. It's my pleasure to call this meeting to order and to welcome to our deliberations representatives from the Canadian Arthritis Patient Alliance, The Arthritis Society, and an individual who wishes to give us his views.

We'll begin this morning with Sherry McKinnon from the Saskatchewan Division of The Arthritis Society. Mrs. McKinnon.

Mrs. Sherry McKinnon (Executive Director, Saskatchewan Division, The Arthritis Society): Thank you.

Good morning. My name is Sherry McKinnon and I'm the executive director of The Arthritis Society Saskatchewan Division. My co-presenter today is Anne Dooley. She is a volunteer with The Arthritis Society and the vice-president of the Canadian Arthritis Patient Alliance, known as CAPA.

Over 4 million Canadians have arthritis; approximately one in every six adults reports having arthritis as a long-term health condition. Three out of every five people with arthritis are younger than the age of 65. Within a decade we expect one million more Canadians to have arthritis. Arthritis is the leading cause of pain, physical disability, and health care utilization in Canada.

Treatment of arthritis involves a wide variety of medications aimed at relieving pain, preserving joint function, and slowing progression of the disease. Many drug therapies are prescription medications.

In reviewing this area, our organization has identified many issues; however, today we would like to focus on the issue outlined in our written brief concerning clinical trials.

Now I'd like to ask Anne Dooley to continue.

Mrs. Anne Dooley (Vice-President, Canadian Arthritis Patient Alliance): Good morning. It's a pleasure to be here. Welcome, all, to Saskatoon. Since we're the first up, I thought that would be appropriate.

The issue we have chosen for discussion is the topic of mechanisms for approving new drugs and introducing them onto the market with respect to their therapeutic values, their side effects, their interactions with other drugs, etc., as well as a focus on clinical trials. Our focus is on clinical trials and governing issues relating to the protection of human subjects who participate in them.

We can't ever forget that you can't have research involving humans without the human subject. And it is the clinical trial, which is one of the steps--actually many phases of clinical trials--that is necessary before a product can be brought to market, and it is the human subject who bears the risk of this research.

What we would like to see, and what is presently not available, is to have experienced, knowledgeable consumers who have been human subjects, who are also trained in ethics, to sit as full members of research ethics boards. Currently, we have, as the “Tri-Council Policy Statement:Ethical Conduct for Research Involving Humans”, stipulation for membership on research ethics boards that two members are to be knowledgeable in the science and the procedures that will be used to conduct this research, one is to be knowledgeable in the law, one is to be knowledgeable in ethics, and there is to be a community representative who is selected from the community and who has no association or affiliation with the institution that has the REB. But there is no job description for this individual, there is no qualification for knowledge for this individual, and, as a result, there are some from the community who serve very well, admirably, but others who simply occupy a seat and never say a word.

Some people say this individual most closely represents the patient, the human subject who enters a trial, but unless they have serendipitously the same kind of experience as people who are intimately acquainted with chronic, debilitating, or life-threatening illness, and who know what it's like to make the decision to join a clinical trial, the fears, the hopes, the vulnerabilities that go into making this decision.... There's no comparison between imagining this experience and having this experience, so our suggestion--and it's an initiation that the Canadian Arthritis Patient Alliance has undertaken--is to train some of our members who are interested, who have experience with clinical drug trials, in ethics. It's rather an extensive training period. People who have heard what we put people through for this are rather surprised, and I think impressed as well. So we have knowledgeable, experienced people who are willing to do this, but in addition, we also have the codicil that nobody will be an advocate for anything other than the activities of the research ethics board.

We are not, in this case, advocating for arthritis or for arthritis patients. In fact, our concern is for the human subject. One reason for this is because we know how important research is. More and more research is taking place. There is a greater and greater need for more and more clinical trials, and this means that there is a greater need also for research ethics boards to process clinical trial proposals, protocols. There is also a greater need for more and more human subjects.

¿ (0910)

There are a number of related issues that we could get into, but we'll stick here with just the research ethics boards. We think that one of the potential outcomes of having knowledgeable patients as members of research ethics boards is to increase the confidence in potential patients, or potential human subjects, and also as a side effect to possibly increase the education of the community about research ethics and clinical trials.

We also think the position taken by the more academic members of an REB might be completely different from the perspective that can be presented by this knowledgeable consumer.

Finally, we think that with the possibility of additional eyes on the REB, with the increased potential risk of having more and more clinical trials being processed and more and more patients being recruited--which, incidentally, is a very slow process at the best of times, primarily because of the fears and vulnerabilities that must be overcome--there is a potential risk for the human subject. We think we can help. We think we need to be there, and we would ask for your support.

The Chair: Thank you, Mrs. Dooley. Ms. McKinnon, do you want to add anything to that?

Mrs. Sherry McKinnon: No. Actually, we thought we would respond to questions if you had questions about our written brief.

The Chair: That's fine. Thank you.

We'll move on to Mr. John McConnell, who is here to present as an individual. Mr. McConnell.

Mr. John McConnell (Individual Presentation): Thank you, and good morning, ladies and gentlemen. We appreciate the committee coming to Saskatoon to hold public hearings here to find out what local citizens have to say about patented prescription drugs.

Excessive patented drug costs are a major issue facing Canadians.

There has been little if anything in the press about your committee's public hearing in Saskatoon. In this region, the media and the public have not been made aware of your invitation for a public hearing. In fairness to you, you certainly are maintaining the Canadian democratic way and you're endeavouring to engage Canadians. But they do need to know when you're holding your event, why, etc.

There is, in my opinion, a loud and pressing request by citizens for fairness and for ethics by the patented drug companies. There is also a general concern among informed Canadians about government paying special attention to the requests of patented drug companies and granting to them special privileges, such as very long-term intellectual property rights. The total health spending as a percentage of GDP for Canada, from 1985 to 2000, increased by 0.8%. Prescription drug costs have increased 344% from 1985 to 2000. We know you can do nearly anything with statistics, but that is information from the Canadian Institute for Health Information.

This brief will stress four points. First is the lack of access to drugs for many people due to their low incomes. It would be nice if you had time to visit some of the people in the city or in rural Saskatchewan. Second is the influence of drug lobbyists on government and on doctors, for example, when prescribing drugs, the effect of direct-to-consumer advertising, and finally, the high cost of drugs due to patent protection.

At least 10% of Canadians have no drug coverage; another 10% approximately have inadequate coverage. Drug costs are driving families onto welfare and forcing families to forego needed therapy.

The drug manufacturers' lobby is powerful, well-financed, well-informed, skilled in communication, and effective in influencing policy people in government. Lobbyists are present in Ottawa when committees of MPs are debating, deciding, and voting on issues of the day. Lobbyists also play a key role in planning drug advertising and in promoting new drugs to media outlets and to physicians.

In April of this year, for example, lobbyists were present, I understand, watching every move by MPs who were members of the House of Commons industry committee reviewing drug patent law. The vote shelved this review. Reinstating mandatory licensing to allow more generic drugs on the market would help control patented drug costs.

¿ (0915)

The federal government's Patented Medicine Prices Review Board's annual report of 2001 shows that the manufacturers' prices of patented drugs, as measured by the Patented Medicine Prices Index, increased by only 0.1%. That was for the year 2001. However, the same index shows that the quantities of patented drugs sold rose 17.8% that year. In other words, when patented drug sales to Canadian consumers include the price and the quantity sold, patented drug prices are now going up 18% to 20% or more each year. This information was reported by the Federal Superannuates National Association, the FSNA.

This board may have some influence in regulating patent drug prices at the manufacturers' gate. However, the markups by wholesalers and retailers on patented drugs are not regulated. Dispensing fees also, at the retail level, are not regulated. This comes also from the same organization, the FSNA.

It is not unusual to hear that someone is paying out of pocket $100 per month and up to $200 per month for a patented drug or drugs that the patient must have for health. I know of one person here in Saskatoon who pays $600 per month for their patented drugs.

Scientific research is certainly needed to produce better patented drugs. The big issues, however, are, what is the actual cost of bringing in a new drug and how much profit is fair, just, and ethical? New medications developed by drug companies do combat diseases and extend life. Medications for heart and cancer diseases are good examples. One of the most unfair and unethical practices by large drug companies is the 20-year extension on a drug patent simply by making a small, minor change to the original patent. That allows these drug companies to reap large profits for another perhaps 20-year period.

The federal government needs to make major legislative changes and improvements in policies related to the control and the marketing of patented drugs. Legislation is needed to require drug companies to document their costs of developing that patented drug. The price of a patented drug should be documented and justified before it is approved by Health Canada.

The Competition Bureau should be playing a more useful and effective role in monitoring and regulating the commercial activities of patent drug companies, in my opinion. This government watchdog, apparently, has had its teeth removed by the WTO--the World Trade Organization--NAFTA, and others who play a major role in the whole international trade area. Perhaps these large international organizations are calling the tune for the Competition Bureau. Patent monopolies need to be rolled back 50%. Bill C-91, the legislation that extends patent protection 20 years and eliminates compulsory licensing, should be repealed. That will be even more necessary for a successful and efficiently run national pharmacare program.

We need a program for pharmacare in Canada. Under the system as it exists now, if there were a pharmacare program, national drug companies would receive even larger profits.

¿ (0920)

A well-run national pharmacare program could substantially reduce drug costs providing there was bulk buying of drugs on a national scale, lower prices were squeezed out of manufacturers, prescribed drugs were based on comparative studies, the impact of doctor-directed marketing by companies was reduced, and discounts on expensive new drugs were increased. Australia and New Zealand have a national pharmacare plan. Drug prices are considerably lower as a result.

Patented drug cost issues are and will be a major challenge for you and your colleagues. As our representatives in the House of Commons, we expect change and we are depending on you to convince others within and outside the House of Commons that it must be brought about.

I must add that there are some statistics that you can peruse at your convenience.

Thank you.

¿ (0925)

The Chair: Thank you, Mr. McConnell.

We'll proceed to the second part of our meeting this morning and begin with questioning by the members of Parliament. We'll begin with Mr. Ménard.

[Translation]

Mr. Réal Ménard (Hochelaga—Maisonneuve, BQ): Thank you for your excellent testimony. I have many questions. First, I would like to ask questions to our witnesses who talked about clinical trials. Our proceedings started a month ago, and, as far as I know, this is the first time these issues are being raised. Your perspective is very interesting.

I remember that in the mid-1990s, a consultation paper was made public on the setting up of a research ethics board. To help me understand your position better, I would like you to tell me whether you wish the Standing Committee on Health to recommend specifically that when a research ethics board is set up — something which I understand is a rather well established practice even if it is optional — there should be a member from the community, and this member could come from an association such as yours, besides all the other members on the committee?

[English]

Mrs. Anne Dooley: Yes. As a matter of fact, that would be extremely beneficial. There are a variety of times and places where decisions are made having to do with risk-benefit analysis.

The research ethics boards, as they operate--not only here but in the United States and other countries--are responsible not only for risk-benefit analysis, primarily on behalf of the human subject, but also to maintain the norms, rights, and duties of the researchers. So there is a balance that must be kept there as well.

One thing that is happening and one reason why we are so insistent that the patient be part of the decision process is because it's these individuals who have the experience that is lacking, and the perspective that can be lacking, from these organizations or groups. Obviously, when you're making a decision that can impact the very life of another you want as much available information as you can possibly have.

So yes, not only in research ethics boards but in a variety of other places, it would be extremely helpful to have the benefit of this experience and knowledge, hard-won as it is.

[Translation]

Mr. Réal Ménard: Mr. McConnell, I liked your testimony before this committee.

I do not know what was your profession before, since I presume, perhaps wrongly so, that you are retired, but I want to congratulate you on the quality of the evidence you have put before us. You are doing honour to the status of ordinary citizen. We appreciate the contribution of people like you, who are able to express a well structured opinion and present specific information.

I am a member of Parliament from Quebec. You may know that at the beginning of the 1990s, this province made a choice to encourage this innovative industry and to initiate policies to encourage drug companies. I have to admit this is now being questioned. We realize that not a single government can afford the equivalent of 15% to 20% more on the cost of drugs. Quebec has a pharmacare plan since 1996. In its very first year, the plan was stressed because of drug costs that are too high.

At the start of these proceedings, I asked Mr. Pettigrew, the Minister of International Trade, to have officials appear before us with whom I could examine the possibility to review the Patent Act. We should not forget that we enacted Bill S-17 back in 1998, 1999, or 2000, because we lost before the WTO. Canada had asked for binding arbitration because the United States were questioning our patent policies. We had two patent classes, those with a 17 year protection, and those with a 20 year protection. We lost, and ever since, in Canada, the patent protection duration is 20 years.

We agree that drug companies have not always had an appropriate behaviour. In many ways, they have been hoodlums or offenders in the drug industry. As things stand now, we have to wonder whether we have any other way out except getting out of the World Trade Organization. We do not have to be a member of the WTO, although there are benefits. Just think of a small country like Costa Rica. It questioned American policies, and had it not been a member of the WTO, it probably could not have used all the remedies it had at its disposal.

If this committee concludes that, in order to lower to 10 years the patent protection and restore a compulsory licensing plan, the federal government has to drop out of the WTO, would the three of you agree with this conclusion?

¿ (0930)

[English]

Mr. John McConnell: Well, I certainly appreciate your remarks.

You mentioned quality. There's a tremendous need to engage Canadians. I suggest that throughout Canada you will find very well-informed Canadians. Unfortunately, a lot of them are tuning out from political issues; as you know, the voting numbers are down and there's a trend down. Why is that? I suggest it's because there isn't enough of the kinds of things you people are doing today, trying to engage Canadians, trying to listen, and trying to find out what they have to say.

Before I mention this big issue of the WTO, world trade, and Canada and so on, maybe I should just mention a little bit of what I have done, because you did ask. I'm a stubble jumper from southwestern Saskatchewan, raised on a farm, and have also worked on other farms. I found that it was awfully tough and thought that there had to be an easier way, because I observed there were people with nice jobs sitting down, with no dust, no bugs, and so on. So I wrote a letter, and I look back on it and think it was amazing, because it was scrawled handwriting.

To make a long story short, I was called by a deputy minister in the Saskatchewan government in 1947, who said, “Come in to the King George Hotel in Saskatoon, because I want to interview you”. I won't go into all the details, but I got a job with the Department of Cooperation and Cooperative Development, and I worked on cost of milk production studies throughout the province. I worked on cooperative studies to determine the role of directors and management in cooperatives—which gets right back to democracy. It was pretty interesting, but sometimes it was not too democratic. Again, it's because the ordinary citizen doesn't take an active part perhaps. The member doesn't really go to annual meetings, etc.

After that, I got involved in cooperative management advising, co-op farms, and what not. Then I thought, gosh, it's a little disappointing, people aren't that interested in some of the economic things they could do and how much they could save. So I got into radio broadcasting and developed that into writing, press, television, and all of that. Then I decided I'd better go to university, so I took agricultural economics. I took all the courses I could get in economics, and a lot of them in farm management. I worked in the province for about 20 years in broadcasting and writing and all of that, and then I decided I must do more evaluations. So I went to Michigan State University and took a master's degree in communications. I came back after being invited to Ottawa.

You talk about quality. Well, the people in Ottawa were a great help to me. And if there's one thing I would urge, it's that we need more interaction between the east and the west, including with you and your comments from Quebec. I would very much love to see us interacting much more, listening to your ideas and exchanging things.

I also worked in economics in Ottawa, and then I worked in communications and in research. I ended up working with 300 agricultural scientists throughout western Canada and the four provinces, helping them to tell their story to the public.

Now then, on to this business of the WTO. I have nothing against private business. I have nothing against competition—but let us have competition. Adam Smith, one of the originators of economics many, many, many years ago, talked about competition. But all they're doing today is looking at prudence; we are not paying attention to the other six virtues that Adam Smith talked about. However, I won't get into that.

On the WTO, unless we can get a hypothetical or so-called level playing field.... If we cannot get a level playing field, which at least we as Canadians think is level, we should certainly stand up to whoever else wants us to continue to play ball.

¿ (0935)

[Translation]

Mr. Réal Ménard: Do I have time for another question?

What would you think if the health committee recommended a registry in which all drug companies, generic drug companies or research companies, would have to state all the samples, specials, and gifts, everything that is on the market but is not sold, so that the public and the lawmakers are made aware of all that is going on? Would you agree with this suggestion?

You should keep in mind that studies have indicated that drug companies can spend as much as $20,000 on each physician to market their drugs. How could we influence what is being sold and restrict what could be considered the influence peddling of drug companies?

I do not know for sure whether this register should be managed by Health Canada or Industry Canada, but what is your reaction to this suggestion? This time, I will start with Mrs. Dooley and then come back to you.

[English]

Mrs. Anne Dooley: Good idea. That really falls right into the issue of conflict of interest. If we bring it back down to our clinical trials, it is a big potential stumbling block or a big problem with clinical trials.

As individuals who participate in clinical trials, we have to know just exactly what the potential and actual conflicts of interest are. So often they are hidden. There are few regulations that say, “You must disclose all conflicts of interest.”

We have to know how far the conflict of interest has to be known. As an example, if we have a researcher who has sizeable amounts of stock in the company that is sponsoring a particular research project, this obviously is a conflict of interest. Is it a conflict of interest if his wife or children have this stock instead of himself? So we need to be able to define where conflict of interest starts and stops.

If we had a register, such as what you suggest, it would be extremely helpful in allowing people to see exactly the kinds of relationships that go on, but not just between industry and researcher. There are also contracts that are signed between industry and institutions. We also have potential conflicts between institutions and the researchers. So we can't stop with just one area of potential conflict.

I like your idea, but I would like to see it extended.

The Chair: Thank you, Mr. Ménard.

Mr. Thompson.

¿ (0940)

Mr. Greg Thompson (New Brunswick Southwest, PC): Thank you, Madam Chairman.

Again, I was taken with John McConnell's presentation.

I think you did pretty well as a stubble jumper, John. Are you interested in running for Prime Minister?

Mr. John McConnell: Well, not just at the moment, thanks. How do you like that for a political answer?

Mr. Greg Thompson: Anyway, I was taken with some of your comments. We've heard these from many professional groups. So it's a real credit to the research you've done, your insight, and the time you've taken to prepare your presentation.

One of the things you mentioned was the price of patent medicine. You talked about intellectual protection. We understand that there has to be a degree of protection for the investment and so on. We don't have to go into any more detail on that.

One of the things we've been hearing about in the last couple of days--this will be verified by my colleague on the Liberal side, Mrs. Bennett, who happens to be a medical doctor--is the high price of generic drugs. With the Patent Medicine Prices Review Board, as you well know, even though patent medicine prices are high, they are lower than in most of the industrialized countries of the world. They're certainly a lot lower than in the United States. We all acknowledge that. So we'd have to say that it's working fairly well. But one of the things we're finding is that the prices for generic drugs are much higher in Canada than they should be. In other words, if you look at patent medicine prices between Canada and the United States, you'll find that our prices are lower. That's why a lot of Americans are coming over here. In fact, on CNN and most of the American news channels it's an ongoing story in terms of their prices versus ours. But there is a huge difference, Mr. McConnell, between generic drug prices in the United States and Canada. In other words, their prices are extraordinarily low versus ours.

I'm not sure if you agree with this, but what that tells me is that our review board process is working pretty well. It's not perfect, but it's working better than if we didn't have it at all. What I'm suggesting is that if there's this huge difference in generic drug prices between Canada and the United States, maybe as a policy initiative we should take a look at setting up the same type of review board for generic drugs. What would your thoughts be on that? Have you had a chance to think about that, other than just having it thrown it at you coldly here today?

Mr. John McConnell: I would repeat myself to say that from the point of view of the patented drug company, we may be somewhat unfair to them until we see the actual cost of producing a particular patented drug, until they have documented it and it's audited by an independent agency. I keep saying there's nothing wrong with business making a profit, but there is something wrong with business making what we perceive to be too much profit.

Mr. Greg Thompson: You're saying there's not enough transparency in their bookkeeping, for the lack of a better explanation.

Mr. John McConnell: Yes. We have these different groups. We have the patented drug companies, research groups, institutions, others that Anne has mentioned, and a lot of citizens, and they all see things from their point of view. As the old saying goes, the seven blind men were looking at the elephant. So, myself included, we all see part of the issue. As you mentioned, there's a great need for much more transparency, accountability, and responsibility.

Mr. Greg Thompson: The other day someone told me, John, that the profitability of the big drug companies--and we're talking about the big pharmaceutical patented drug companies--make the big banks look like pikers. In other words, their profits are extraordinarily high.

If we're buying into your argument--I'm not saying we all do--I think that's a very valid point. One of the things that has been suggested in the last few days is that we don't want to make profit a dirty word. Some people believe there's a limit in terms of the profits that should come with this type of patent protection over 20 years. In other words, if that level of transparency is there and we can see how much was invested in it, we're saying this would be a reasonable return on the dollar on that particular drug, and after that, the price of the drug has to come down. Are you thinking along those lines?

¿ (0945)

Mr. John McConnell: Yes.

Also, as you talk, I think of what is going to be included in the cost of production of a particular patent drug. We know you can add a whole lot of things that really are illegitimate figures in terms of our genuine cost of production of a drug. There are a lot of other peripheral costs that one can work in if no one's questioning it.

Again, it comes back to the need for independent opportunities, for transparency, and for communication of that information.

The Chair: Thank you, Mr. Thompson.

Ms. Bennett.

Ms. Carolyn Bennett (St. Paul's, Lib.): Thanks very much.

One of the things that's clear on this panel is the really important role of citizens in the ongoing dialogue in terms of pharmaceutical policy. But even down to the specifics, from the ethics committees, to what drugs are approved, to what drugs go on a hospital formulary, there are many different levels at which citizens need to be involved. I think what we're hearing from the patient alliance is that they have to be informed citizens; they can't be just token.

I think of some of the work Susan Phillips has done on the role of citizens; they talk about strong associational networks, that you can't have one-off token citizens. I'm very impressed by what you're doing in terms of training and educating citizens to play these important roles and by the faith that Mr. McConnell has that if you put citizens there, good things will happen.

I think we learned that from Romanow. Judy Maxwell's deliberative exercises during the Romanow process showed that Susan's got it. They understand there are going to be some trade-offs in terms of budget, in terms of privacy, but basically, if you put a bunch of Canadians together, they'll figure it out.

I guess I want to know the actual specifics at each of those levels where I think all of us believe citizens should be involved. If we did the very top level...and I think both of you alluded in some way to there being this top end. As you know, Romanow called for a Canadian drug agency that would help coordinate the work in terms of common drug approvals, maybe post-market surveillance--all of those things.

The FDA, I think, has a citizen's panel where patient groups that are knowledgeable get to green-light or amber-light a drug for which there is huge international research. That cancer group, arthritis group, or AIDS group could say “We have seen enough. We are more than happy that you put this through some sort of fast track as opposed to sending it through the regular channels, because we need this drug now.” Obviously, it would have to be a knowledgeable group that was prepared to do that risk-benefit analysis. I think they then would be very vigilant in terms of the post-market surveillance of something being released in Canada.

I just want to know, can you see a structure such as (a) the drug agency and (b) a citizen's group or stakeholder's group that would be our second-table advisory panel to such an agency?

Mrs. Anne Dooley: Yes, I would, but I think we have to be careful about it. What has also happened in the United States as a result of that panel is that some of the drugs were pushed onto the market before there was clear clinical benefit demonstrated for them. In other words, they used a synthesized end point, and in some cases it simply was not accurate.

There are breast cancer studies that show precisely this. Some of the ballyhooed potential benefits simply did not materialize, so there was a great deal of wasted time, effort, and money when some of this could have been turned into other research that would have been far more beneficial.

I believe there needs to be a great deal of informed patient input into drugs, from the planning stage to the delivery stage. I think this is of incredible importance. After all, when they get right down to the nitty gritty, it's the patient that tells the doctor where it hurts. To continue this analogy, it has to be the patient who has input into the whole process to help alleviate this pain.

I'd also like to just say that in the research process, it's essentially the patient who is asked the research question and the patient who provides the answer. So I come back to the necessity of keeping in mind that the patient must be protected. And in this research process, as the impetus for more and more research and more and more clinical trials continues, frequently the patient is lost in the shuffle. He becomes just a means to the end and plays a role in very much the same fashion as a specialized test tube.

We are not interchangeable. We are important. And researchers, industry, and institutions all have to realize that we are an integral part of the process; we are not simply beneficiaries of it.

So right from the beginning, as you suggest, all the way through to the end, informed patient input is very important. However high the stakes are for industry, for institutions, or for researchers, the stakes are higher yet for the human subject. It's the human subject who bears the research risk.

¿ (0950)

Ms. Carolyn Bennett: Maybe Mr. McConnell or Ms. McKinnon have an answer.

I guess I would like to know from The Arthritis Society, or the patient's point of view, how the Remicade thing could have been done differently.

Mrs. Anne Dooley: This is my opinion, because I haven't gone as deeply into it as a great number of other people. Incidentally, as you cross Canada, I hope you'll have the opportunity of hearing many of us, from The Arthritis Society and from the Canadian Arthritis Patient Alliance. There are some who have in fact done more homework on that particular subject.

One of the problems is that when you're going into a clinical trial, the patient who has benefited from this particular trial medication has to have a continuance of the medication. If it's to be removed from them, then there has to be an adequate substitute. If there has not been something adequate prior to that, that was available, then the only thing that is adequate is the trial medication.

In this particular, rather unfortunate, case, the delay in approval was what I think really hung everybody up. I think the company had every reason to believe an approval or rejection, some kind of statement of a decision by the government, would be made in a timely fashion. It was not.

I think the patients had every right to assume they would have access to this drug if in fact it was beneficial to them. I think actually, in many instances, the company did do what it could to ensure that these patients continued to have the drug.

It was unfortunate. It was painful for everybody. I think it is one of the best examples of why there have to be clear-cut policies ahead of time, and also why it's important to have a clear statement that anybody who enters a clinical trial has the right to trial intervention at the termination of the trial.

To make another kind of case that is even more specific, some people say it's only a pill. But it's life to a lot of people. If you were to have this as a device that was implanted and at the end of the trial had to rip it out, you'd get a visual presentation of what this does to patients. They no longer have something that has returned them to some degree of normalcy and provided a reasonable quality of life.

It's incredibly important. It's all tied up with this clinical trial business, which, as you've probably guessed, is one of my favourite subjects.

¿ (0955)

The Chair: Thank you very much.

Thank you, Ms. Bennett.

On behalf of all the members of the committee, I'd like to thank Ms. McKinnon, Ms. Dooley, and Mr. McConnell for their contributions to our deliberations. Thank you for coming down this morning to help us out.

Ms. Carolyn Bennett: I'd like to say that I think the panel today is hugely important. I would like to have you take back to your organization that what The Arthritis Society and the Patient Alliance are doing sets a standard in this country for the effectiveness of, when you have patients' voices at the table, how you can make real change. We thank you for the level you set in The Arthritis Society compared to every other organization.

Thank you very much.

Mrs. Anne Dooley: Thank you.

The Chair: This section of the meeting is now over. As the current witnesses leave the table, we invite the next set of witnesses to come forward.

¿ (0957)

¿ (0959)

The Chair: Good morning. Welcome to our deliberations. It's my pleasure to introduce to my colleagues the Honourable John Nilson, Minister of Health for the province of Saskatchewan; Mr. Kevin Wilson, the executive director of the drug plan and extended benefits section; and Ms. Heather Nord, who is a senior assistant to the minister.

Welcome, this morning. We're very happy to have the Government of Saskatchewan represented in our hearings, and we're honoured to have the Minister of Health.

The Honourable John Nilson (Minister of Health, Government of Saskatchewan): Thank you very much. It's a great pleasure to be here. I was very pleased to hear that you were going across the country dealing with this particular issue.

I have a presentation to make. Mr. Wilson and I will be happy to be part of the discussion, which I know will come after the presentation.

I'm very pleased to make a presentation on behalf of the Government of Saskatchewan to the Standing Committee on Health's study on the prescription drug situation in Canada. Mr. Kevin Wilson is joining me. He's the acting executive director of Saskatchewan's drug plan.

It's well known that drug costs are the fastest rising cost in Canadian health care. It's therefore imperative that we take a coordinated approach to prescription drug issues, including patent issues, which are continuing to lead to spiralling drug costs.

An important goal of our government's action plan for Saskatchewan health care, the blueprint for health renewal in our province, is to identify changes that would lead to a more effective, better managed, and higher-quality health care system. Pharmaceutical policy is an area where we believe there's an opportunity to control costs through better management. It's obvious that the country needs an effective strategy to address the escalating costs of pharmaceuticals, thereby ensuring that we can continue to provide the benefits our residents need into the future.

Our government remains committed to sheltering those on low incomes and those who have high drug costs. The benefits under the Saskatchewan drug plan are targeted to people who need the help the most and to those drugs that work the best. Our drug plan ensures that people can afford their medication through the special support program. Families with annual drug costs exceeding 3.4% of their family income are eligible for assistance. However, drug plan payments have ballooned in Saskatchewan, from $43 million in 1993-94 to $133 million in 2002-03.

Drug expenditures represent over 16% of health care expenditures in Canada. This rate of growth is much higher than the overall growth in the economy and in the health care budgets across the country, and numerous sources indicate this trend will continue into the future.

Rising drug costs affect not only the provincial budget but also the lives of ordinary citizens. People will no longer be able to afford the drugs they need to improve the quality of their lives. As our population continues to age, there will be an increased utilization of the health care system and more drug prescriptions being written. Provincial drug plan costs are also rising, because people are being discharged earlier from hospital and are then treated by drugs administered at home rather than in institutions. New diseases and treatments will also continue to add stress to our already overburdened system.

Some of the increase in drug usage is, of course, very exciting news. The introduction of new drugs for previously untreatable conditions, such as multiple sclerosis, and advances in the treatment of other conditions, such as arthritis, represent potentially exciting breakthroughs in medical research. While our government remains committed to providing access to new drugs as they come on the market, we want to make sure they're being used appropriately.

The process of deciding what to cover under the drug plan is more important than ever as the cost of drugs continues to rise. Some of the drugs coming on the market today can cost up to $20,000 a year per patient. Often their benefits are unproven or limited. That is why we support the establishment of a national drug review process to support rigorous review, objective assessment, and cost containment. We will also continue to take a stand against practices that drive up drug prices and are detrimental to the health care of Canadians. These include the direct-to-consumer marketing practices of pharmaceutical companies and the practice of evergreening.

We recognize that we are not alone in Canada. Other provinces, and indeed the federal government, which runs the fourth largest drug plan in the country, are facing a similar reality with increased drug costs.

À (1000)

I've briefly touched on the need to ensure appropriate prescribing, but I think it is important to add more detail here. First of all, I would like to stress that Saskatchewan has always been on the record in support of the common drug review and applauds the federal government for supporting this initiative. In the past, all jurisdictions, including Saskatchewan, reviewed all new drugs submitted to them for consideration for coverage under their drug plans. Participating in the common drug review will allow provinces to make formulary listing decisions based on common information. This is definitely a step in the right direction.

Saskatchewan is very proud of a number of initiatives it has introduced to help contain pharmaceutical costs and ensure appropriate prescribing. Saskatchewan has had success in working with drug manufacturers to ensure that its residents have access to the best possible prices for generic drugs.

Saskatchewan's academic detailing program, the RxFiles, as we call it, is another initiative that has proven to be very well received by the prescribers. This educational initiative provides accurate and unbiased drug information to physicians through one-on-one information sessions right in their office. Drugs covered by our provincial drug plan are reviewed for safety and value by our drug review committees. Those drugs recommended for listing are therapeutically effective and have proven to be of high quality.

Some drugs are covered under exception drug status. The exception drug status criteria for coverage is designed to identify those patients who will most benefit from the drug, based on scientific evidence. This will help ensure appropriate use and help to control escalating drug costs.

I'd also like to point out that Saskatchewan is the first jurisdiction in Canada to put in place a health quality council. The Health Quality Council is led by a panel of provincial, national, and international health leaders appointed to recommend innovative ways to improve the quality of health care for Saskatchewan citizens, including in the area of drug plans and others.

I would also like to note that legislation is currently in place in Saskatchewan, and work is proceeding on the necessary computer changes, to provide Saskatchewan Health with a more complete record of all prescriptions filed in Saskatchewan. When fully implemented, this initiative will give health care providers better information on which to make decisions. This will help to prevent dangerous and inappropriate use of prescription drugs—and I would add here, this comes directly in response to some inquests held in Saskatoon related to issues around doctors not having full information on the prescriptions that patients have. So we're trying to fix this in Saskatchewan.

Direct-to-consumer advertising of prescription drugs significantly affects the utilization of these agents. In the United States, where direct-to-consumer advertising is unrestricted, annual spending on such advertising is nearly $3 billion a year. Retail drug spending has nearly doubled since the U.S. Food and Drug Administration relaxed its rules for broadcast advertising in 1997. Sales of the 50 drugs with the biggest direct-to-consumer advertising budgets accounted for 48% of the enormous increase in retail spending on prescription drugs from 1999 to 2000. This increase was U.S. $20.8 billion.

Advertising of prescription drugs can result in inappropriate and unnecessary prescription drug use. It drives up the cost of health care and undermines the efforts of physicians, pharmacists, and others to promote optimal drug therapy. Many of the most heavily advertised drugs tend to be newer and more expensive than the alternatives, which work well for many people. Consumers need high-quality, balanced, comparative information on new drugs and alternate drug or non-drug treatments in order to make informed decisions about their health care. This type of information is best provided by an independent source that does not benefit from the sale of the product.

The Canadian Pharmaceutical Association and the Canadian Medical Association are opposed to direct-to-consumer advertising of prescription medications. The United States and New Zealand are the only industrialized countries that allow extensive direct-to-consumer advertising.

This month the U.S. Food and Drug Administration is holding hearings on the subject of direct-to-consumer advertising. The recent data found that 70% of general practitioners believe this advertising confuses relative risks, and 75% say it causes patients to think drugs work better than they really do.

À (1005)

In New Zealand, physicians are petitioning the health minister to ban direct-to-consumer advertising. Drug manufacturers in Canada continue to push the boundaries of the current Canadian legislation and are lobbying to have the regulations loosened. We believe the federal government should not relax the regulations that prohibit this advertising in Canada. In fact, the current regulations need to be strengthened and the loopholes that manufacturers are using to promote prescription drugs to consumers must be closed.

While several factors, such as the aging population and a shift from hospital to outpatient care, negatively affect growing drug expenditures, the Romanow report cited evidence that these growth rates were largely driven by the effect of new drugs and increased utilization. As a province, we have appeared before other parliamentary committees to express our concern about the implications of the changes to the federal Patent Act that were made in the 1990s. The rising pharmaceutical costs we are now facing are a result of these changes.

I'd like to highlight recommendation 41 of the Romanow report that states:

The federal government should immediately review the pharmaceutical industry practices related to patent protection, specifically the practices of evergreening and the notice of compliance regulations. This review should ensure that there is an appropriate balance between the protection of intellectual property and the need to contain costs and provide Canadians with improved access to non-patented prescription drugs.

Saskatchewan supports this recommendation. The notice of compliance linkage regulations and the practice of evergreening must be reviewed. They're costing Canadians millions of dollars each year due to delays and generic drugs reaching the marketplace. These are resources that could be directed to many areas within health care.

I'd like to illustrate for you the effect of the entry of a generic drug on our drug plan. This past year a cholesterol-lowering agent became available as a generic drug. On an annual basis, the availability of this product will result in significant savings of $2.2 million to Saskatchewan residents and the drug plan. Generic drug companies have indicated that there are several generic products that are being delayed due to the practice of evergreening. Health Canada's approval of two of these delayed generic drugs could save our provincial drug program over a million dollars annually.

As you are probably aware, President Bush has recently addressed this situation in the United States by introducing changes that limit drug makers to a single 30-month regulatory delay to sort out patent disputes. In Canada, patentees can add multiple patents that may then be individually contested, triggering a 24-month delay period for each new patent that is contested. As Mr. Romanow stated, “This delays the ability of generic manufacturers to develop cheaper products for the marketplace....”

As I mentioned earlier, Mr. Romanow recommended addressing these regulations. There is sufficient evidence for the federal government to take action and ensure that Canadians receive timely access to generic drugs, so that payers are able to direct resources to important new therapies.

In 2002, patented drugs represented 67.4% of drug sales in Canada. In 1996, patented drugs represented 45% of drug sales. Clearly, patented sales are growing at a higher rate than overall increases in pharmaceutical expenditures.

We would like to commend the Patented Medicine Prices Review Board for the cost-reducing effect the board has had on prices of patented drugs in Canada. I understand that Canadian patented drugs have, on average, been below the median price in comparative countries. I've noted that the Patented Medicine Prices Review Board will be investigating why we have slightly exceeded the median in this past year after being consistently below the median in previous years. I think in 2000 we were 8% below; in 2001 we were 5% below; but in 2002 we were 1% above. We want to ensure that this trend does not continue.

À (1010)

The board has had a significant effect on the price of patented drugs, year-over-year price increases, and the price of patented drugs compared to other jurisdictions, especially the United States. Even with the important work of the Patented Medicine Prices Review Board we are experiencing significant cost escalation, and we encourage them to consider if more can be done to limit the introductory price of new drugs. We suggest that there be a continued reassessment of the criteria used by the board to strengthen the link between the value of a new drug and their price guidelines.

Saskatchewan is also concerned that the prices of multiple-source drugs, including generics, are higher in Canada than in other comparative jurisdictions. The study recently released by the Patented Medicine Prices Review Board, which compared Canadian prices of multiple-source drugs to prices in nine other jurisdictions, established that the Canadian prices for generic drugs exceeded median prices in the other nine countries by 21% to 51%. This is a significant amount.

An earlier PMPRB study determined that single-source, non-patented drugs had higher prices in Canada compared to other jurisdictions. It's clear that we need to do more to obtain better prices for non-patented drugs in Canada. The Province of Saskatchewan agrees with the Romanow commission's recommendation to regulate non-patented medicines, both single- and multi-source, and we're willing to cooperate in implementing whatever required changes there may be.

The next point I want to comment on is the review of the Canada Health Act. The Canada Health Act requires that drugs administered in hospital be provided at no charge to the patient, while the same drugs administered in a home care setting may carry a charge to the patient.

It may be better for that patient to actually be treated in the community through, for example, infusion therapy provided in a community institution on an outpatient basis, or through a program of home care. The cost of accessibility of the drug should not be an issue, nor should the Canada Health Act be a barrier to the best possible care. This may also cause the patient to be burdened with the cost of these drugs when a third-party insurer refuses coverage based on their interpretation of the Canada Health Act. This leads to inequity in coverage.

In our province, I'll give you the example of Remicade. People receiving Remicade had it paid for if it was provided to them in the hospital, but if it was provided in the community it wasn't paid for. We ended up changing that rule and made sure that whether Remicade was provided in the hospital or in the community it would be part of the drug plan, and people would then contribute to part of the cost. Obviously the challenge there was dealing with the cost of the drug in the whole system.

We think the Canada Health Act was written at a time when almost all intravenous provision of drugs was done in a hospital. This is something that needs to be changed, so your committee may want to identify that as something that can be worked on, along with a few other things in the Canada Health Act.

Another area I'd like to touch on briefly is the unprecedented growth in international or Internet pharmacies in Canada. Currently there's only one Internet pharmacy in Saskatchewan, but the number is expected to grow in the next few years. It's crucial that provincial jurisdictions and the federal government work together to ensure Canada's drug supply is not adversely affected by this new industry. As well as possible drug shortages, there is a potential for international pharmaceutical companies to increase Canadian drug prices to equal those of our U.S. neighbours. We don't see moving to a North American approach to drug pricing as being in any way beneficial to Canadians.

In conclusion, I'd just like to reiterate the points I've made today. I ask that you not allow expansion of direct-to-consumer advertising. There's clear evidence that the effect on utilization will only make our problem with escalating drug costs more daunting, and we have to think of Canadians' best interests, not those of the pharmaceutical companies and the media.

À (1015)

The second point is to re-emphasize the need for balance in terms of patent protection, at the same time reminding us of the need to contain costs and provide greater accessibility to generic prescription drugs. In Canada the Patented Medicine Prices Review Board's annual report for 2002 shows that concerns with the Patent Act changes are becoming a reality. Patented drugs account for a greater percentage of our drug costs. Are we out of balance? That's a question that needs to be addressed.

And please, I would also ask that you encourage the continuation of the work on the Patented Medicine Prices Review Board's pricing guidelines, where they are continuing to examine the link between value and price. I think that's an important bit of work they're working on now, and it needs to be done.

It would also be helpful to eliminate or limit the effect of notice of compliance linkage regulations to reduce unnecessary delays for generic drug approvals.

We would also ask you to look at the whole issue of regulation of non-patented products, and then finally to take a look at the Canada Health Act as it relates to outpatient therapies.

I'd like to thank you for this chance to outline a number of issues. We in fact had a whole bunch more we could have put in here, and maybe they'll come out in the questions. Mr. Wilson and I will be happy to answer any questions you may have.

À (1020)

The Chair: Thank you very much, Minister.

We'll move on to the question and answer section, and I think this time I'll let Mr. Thompson lead off. We're sort of taking turns today because the official opposition is not here.

Mr. Réal Ménard: I don't understand why you've changed the rules.

The Chair: I'm not changing the rules. It's just that the people who have the automatic right to lead off are the official opposition, and they're not here.

Mr. Réal Ménard: But we are the second party in the House. I don't understand that. We're not going to discuss it, but I don't appreciate this.

You can start, but--

The Chair: I thought maybe this time we'd let Mr. Thompson start and then next time Ms. Bennett. It seems the first questioner takes a lot longer, so I thought we'd share the time a little bit better.

Mr. Thompson.

Mr. Greg Thompson: That's what we call parliamentary cooperation.

Mr. Minister, I appreciate your being here with your staff, and I did take meticulous notes. I'll just step through some of the major points you made.

In terms of advertising, I would be in complete agreement with you, and probably most of the committee would be. I can't speak for them, but I do understand the point you're making and I agree totally.

One of the problems, as you well know, is that we're victims of being very close neighbours of the United States, and how you keep that advertising out of Canada is obviously the problem. Whether we're very rigid in our advertising policy or not, we're still victimized by the advertising on those American channels and in their newspapers and other media. It's a problem we can't completely control, but I do agree with your analysis of advertising with respect to the impact on the consumer, the health of Canadians, the power of advertising companies, and generally the cost that goes with that.

One of the hobby horses I've been riding in the past couple of days--and you've touched on it--is generic drug pricing. I agree with you that the Patented Medicine Prices Review Board is probably working pretty well, and I'm more or less suggesting that maybe we should do that with generic drugs, because it appears to be a huge problem in Canada. Again, if you measure patent drug prices in Canada versus those in the other industrialized countries, it seems we're doing okay, although that's not to say they're as low as they should be. But I'm looking for your position on generics, whether it's time we did set up a price review board on that and examine the monopoly that seems to be taking shape in Canada. In other words, there are basically two large generic drug companies that seem to be taking advantage of the marketplace. That's evidenced by the prices we're forced to pay for generic drugs in Canada versus those in the United States.

What I'm saying is this, and I'm looking for your comments on this and whether or not you agree. If, as it appears, the Patented Medicine Prices Review Board is doing its job and driving down patent drug prices in Canada versus those in the United States particularly, isn't it time we did the same thing with generic drug prices? I'll leave it at that.

À (1025)

Hon. John Nilson: I'll make a couple of comments and then ask Mr. Wilson to add some more from the administrative side of the plan.

I agree, and Saskatchewan is on the record as being supportive of what Mr. Romanow recommended in regard to exploring the possibility of regulation in this area around prices as well. The model we have around patented medicines has appeared to work fairly well, but we also end up having to examine this industry. It's very clear that our prices are actually higher than those in the United States in this area, and that's one of our challenges. We have lower patent medicine prices, but maybe some of our generic prices aren't as low as in the U.S. market. But we're on the record.

Secondly, it's an area of provincial-federal cooperation around how we do this, and that's why I want to put on the record that we're willing to be part of whatever solution comes, because I think it will involve both the provinces and the federal government working together.

Maybe I can let Kevin add a little more.

Mr. Kevin Wilson (Executive Director, Drug Plan and Extended Benefits, Saskatchewan Health): Sure.

We certainly have seen a trend where the ratio of generic-to-brand prices is increasing, and it's troubling. We're basically price takers on the generic side of things, as you've suggested. As the minister has indicated, we're certainly keen to participate in areas to address that.

Mr. Greg Thompson: The other point I want to pick up on is that you're talking about the Canada Health Act and about hospital setting versus home setting with regard to the drug provision or the province providing that medication.

I think that is a real problem in Canada, because as you well know, the present government in 1997 promised a pharmacare program, a commitment they've never honoured. I can't speak for the Government of Canada, but I think one of the reasons it wasn't honoured was because, after close examination, they found there was such a crazy patchwork quilt of drug programs across the country that they went back to Ottawa scratching their heads as to how they could possibly set up and administer one in terms of moneys that are presently going into the system. Some provinces have some, some don't, and so on. It's a hodgepodge.

There's no question that, for example, concerning cancer treatment and chemotherapy and the follow-up drug treatment--some provinces provide that once the patient goes home and some don't, but I think there has to be a national approach to it.

Again, could you comment on that?

Hon. John Nilson: I think Saskatchewan may have been one of the first to actually provide that. Around 1993, all the drugs of cancer patients were covered, whether they were in a hospital or out of a hospital. So in Saskatchewan that has been the practice for probably 10 years. But we've ended up with some very tough questions to try to answer, which ones are on the drug plan or not on the drug plan.

Often another complication is if people end up having some insurance company coverage or coverage through work, and it's always that they'll pay what the province doesn't cover. So we get into some of these complications around the Canada Health Act.

There's an interesting question there that we need to address and talk about, health not being tied to institutions necessarily but to where care is provided.

The challenge, clearly, from the federal side--if I were to give my impression of it--is that when they looked at the cost, it was huge. In Saskatchewan, when the present government came in after the 1980s and the huge debt, this was an area we looked at and said, we can't afford to pay for all these costs, so we'll set up catastrophic coverage so that the really high costs are paid for--but a lot of the initial costs were not.

We would like to get back to a situation where the health system might be able to cover all of the pharmaceutical costs. But given the huge amount of money that's necessary, I'm not sure that in the foreseeable future we'll be able to return to some of the original goals we had around drug costs, and this is just another area.

The real issue here is inequity. It's a fact that if you're in a hospital you're going to get that coverage, but if you can thrive better at home or in a community institution, those costs aren't covered.

In Saskatchewan, we've done that for cancer. For Remicade we've actually worked it the other way and have all people who are getting Remicade treated as having the drug plan coverage. But then that puts us a bit offside of the Canada Health Act, which we're willing to explain.

À (1030)

Mr. Greg Thompson: Thank you, Madam Chair.

The Chair: Thank you, Mr. Thompson.

Mr. Ménard, please.

[Translation]

Mr. Réal Ménard: Thank you very much for your remarks. I certainly hope we can get copies of your remarks for distribution.

Obviously, the health committee will have to deal with very important issues. I am a member from Quebec. In my province, we chose to have a policy to encourage the innovative industry, and in the last few years, we have been quite supportive of a comprehensive protection of patents. I have to admit my beliefs have been shaken in the last year, because I know not a single government will be able to afford the cost of drugs. You probably know that since 1996, we have in Quebec a pharmacare plan. But as soon as 1997, the premiums had to be raised because the plan was overburdened.

If, all things being considered, we have no other option if we want to shorten the protection of intellectual property and reduce to 10 years the patent protection and this implies getting out of the WTO, do you think Canada should go that route? I have to remind you that we amended the Patent Act in 2000 because we lost our binding arbitration case before a WTO panel.

In Canada, we had two categories of patents, one with a 17 year protection and one with a 20 year protection. Since 2000, patents are all protected for 20 years. This is a problem, of course, because of the evergreening practices of the drug industry. We also have the issue of the notice of compliance linkage regulations, but it is part and parcel of Bill C-91.

If we are to restrict the protection of patents and break the hegemony of drug companies and we realize that there is no other option but to withdraw from the WTO, would the government of Saskatchewan agree with such a recommendation?

I have two more questions.

[English]

Hon. John Nilson: Well, I think Saskatchewan might be the largest trading province in Canada. We have only one million people, and we have many products and they're sold everywhere. The World Trade Organization is an important part of many businesses.

I would like to think we can get that balance without getting out of some of the worldwide organizations. So we would try to deal with this particular issue around drug patents in a couple of different ways.

One would be to make sure that 20 years is 20 years, so the evergreening stops and there aren't extensions. So that's clear.

Another way is to have clear evidence of the value of some of the newer drugs. We have an international movement of assessment that is being done commonly now across Canada. We're very much part of that. Actually, Mr. Wilson's predecessor is working at a national level to do that for Canada.

We're very much in favour of research. Research is good to develop new products, but it's also good to evaluate the products and make sure they are what they say they are.

I would strongly encourage Canada to look at a clinical trials registry. This would be a registry of all clinical trials that drug companies make, so that we know they may have abandoned the clinical trial or not done something, but we actually then, as researchers, as the public, would have a record of when clinical trials start and when they end or if they're abandoned in the process. Right now, usually what we get are the successful clinical trials, and if there have been problems some other way, we never really know about that. So that would be an area.

I think, though, the keyword, as you mentioned, is balance.

À (1035)

[Translation]

Mr. Réal Ménard: Here is my second question. The Patented Medicine Prices Review Board has given us this information on the drugs that get a notice of compliance. I am talking about drugs for human patients only and not about the drugs veterinarians use with animals. Last year, for example, 64 drugs being researched got a notice of compliance. But we are told that, in the four or five last years, only 10% of drugs getting notice of compliance brought new clinical benefits. These are drugs that bring added value for the patients and actually improve the drug therapies. So, 90% of researched drugs that get a notice of compliance from Health Canada do not bring any added benefit for the consumers.

If this committee recommended... This committee could do something about this. I was surprised to learn that Health Canada examiners, those who examine clinical monographs, do not have any criteria on the therapeutic benefit of new drugs. The lack of criteria on therapeutic benefits is so complete that new drugs are compared with a placebo.

Would you agree with us if we were to ask Health Canada not to approve and not deliver a notice of compliance for drugs that do not have a 50% clinical benefit.

Secondly, if we were to eliminate comparisons of drugs with placebos, do you think it would be more interesting to compare them with existing drugs?

[English]

Hon. John Nilson: I'll try to answer, and then I'll get Mr. Wilson to help me. I think it does make sense to try to designate what I would call breakthrough drugs--in other words, those that provide some special things above what we have in the existing drugs--as opposed to ones that just involve slight changes and seem to provide more time, this evergreening effect. So I would support your suggestion there. I'm not sure 50% is the right number, but it sounds reasonable.

I think the whole challenge in the area is how we get the right balance around the returns for the research that's done, which is the argument from the manufacturers, and the actual product. Sometimes on a specific drug the costs are substantial to get there, and then they don't actually recover all of that. I understand the arguments. But I think we need to be fair to our consumers on the prices and also make sure that new products are actually of greater benefit.

Kevin, you may want to add something to that.

Mr. Kevin Wilson: When we suggested that the PMPRB continue its work as far as linking value to the price of a new product is concerned, that is in a somewhat similar vein to what you're suggesting. In that category 3, or slight, moderate to no improvement, there should be a stronger linking of value to the criteria that are used for pricing.

[Translation]

Mr. Réal Ménard: This committee is trying to discover what the markup of pharmacists is. Physicians tell us they are not getting rich. True enough, whatever the drug, they do not get a kickback. They do not get any part of the cost of prescriptions. What is actually going up in Canada is not the price of drugs set by the manufacturers. The Patented Medicine Prices Review Board is controlling this. What is going up is the retail price.

Did your department make enquiries on the increase of the markup of pharmacists in Saskatchewan? Who in the system do you feel is benefiting the most from the increasing costs of drugs? Are those who benefit the most the pharmacists? With the greatest respect for all professions, because nobody is being dishonest and I have no grudge against pharmacists, we are trying to understand what the markups are. Did your department try to determine that?

À (1040)

[English]

Mr. Kevin Wilson: We have contracts in place with pharmacists and the drug wholesalers that provide the products to the pharmacists. In each case we have limitations on the amounts. With the increasing price of drugs over recent years, one of the things we've put in both those contracts is a maximum, or cap, on the markup that is allowed on higher-cost medications.

Hon. John Nilson: The answer there is that in Saskatchewan we have some special relationships on how we market drugs. We have access to a lot of that discussion with both the wholesalers and the pharmacists on a regular basis. We try to watch that issue, but it's always a challenge.

Mr. Réal Ménard: Thank you.

The Chair: Thank you, Mr. Ménard.

Ms. Bennett.

Ms. Carolyn Bennett: Thanks very much.

As always, we look at Saskatchewan for leadership on all of these things--values, fairness, and equity. I want to personally thank you for the Health Quality Council listserv, which is probably the only one I actually read every day. It's really important what you do for the country as well.

How many doctors do you have in Saskatchewan?

Hon. John Nilson: I think there are somewhere around 1,200.

Ms. Carolyn Bennett: In terms of a laboratory for change, you have some opportunities here that maybe we don't have in other places.

Obviously, new drugs aren't a problem. The people writing the scrips for them are the problem. If there were lots of new drugs and nobody wrote any scrips for them, it wouldn't matter. Somehow, physician behaviour is an issue that I guess we have some concern about if we approve all of the drugs that have a little tiny improvement or all of that.

Why does it cost us more money? We don't care how many serial things there are on our shelves, because surely people who were getting this will now get that instead.

I'm trying to this figure out. If we improved a few more drugs and gave choices out there, there is something the matter if the overall number of prescriptions goes up because you stop prescribing that one and start prescribing this one instead.

In terms of what we are approving, or in terms of this very regulated area, isn't it the quality of the decision-making that's the problem rather than the variety of stuff?

In the 1990s we had this whole cost-containment approach, as opposed to a cost-effective approach. I'm having a little trouble with that.

While you think about that, I want to know something. In Saskatchewan, one of my big things in terms of rising drug costs was that it used to be invisible in the global budgets of hospitals. If somebody was in the hospital for ten days with pneumonia, or IV therapy for pelvic inflammatory disease, or all those things, the drug cost ended up invisible in the hospital budget. When people were admitted to hospital for long periods of time, we never saw the drug costs because they were hidden in the global budget.

Can you tell me, as we shortened the length of stay, started giving IV drugs at home, and all those things, how much the new drug costs are? How much are uncovered drug costs now that people aren't in hospital any more?

Hon. John Nilson: This is an interesting area to look at. There's no question that some of the breakthrough drugs, the really important drugs, have changed the practice of medicine and of how patients are treated. We can never lose that important factor. We know that over the last 40 years, every few years, there is a major change that takes place.

You are right in saying that we're continuing to examine how costs rise within the hospital setting versus costs that rise within the drug plan. In Saskatchewan, we have two separate ways of keeping track of that.

A good example for us is the decision we made around Remicade. We're going to treat that whether you get it in the hospital, the community, or a doctor's office, price it in the same way, and include it in our drug plan costs. It means that everybody then contributes something toward that cost no matter where they get it.

Part of the reason we did it was because there were some fairly major challenges on the regional health authority budgets if these costs were all to be dealt with in the hospital budget. I think we're only starting to understand how all of the costs work.

À (1045)

Ms. Carolyn Bennett: In Saskatchewan, the Remicade patients were debilitated but now are able to go back to work.

How do we look at the big picture in terms of the productivity of a province? You have a nice little laboratory here. How many of your Remicade patients now are able to work who weren't able to work before?

Hon. John Nilson: I'm hoping that most of them are living a much better life, and I'm proud to say that Quebec and Saskatchewan were the first provinces to cover Remicade--I think within months or days of the trials ending. So Quebec and Saskatchewan went ahead with that. It was a challenge on the cost side, but we've been able to do that, and we think it was an important thing to do,

But I think the bigger question you're asking is, what is the role of drug therapy within the health system as it relates to all costs? We do have a laboratory in Saskatchewan for looking at this. One of our gifts to the world is the very detailed records around drug prescribing for 40 years—or 30 years for sure. So we do actually have people who come and check on de-identified information to look at trends and things like that. We're continuing to do that.

Ms. Carolyn Bennett: I would hope we were also able to look at the fact that you've turned somebody who was on CPP disability into somebody who is now a taxpayer, by giving them what looks like a very expensive drug. But it has changed their quality of life and their productivity immeasurably.

Hon. John Nilson: I think the better examples are in the mental health field, with all of the people who can function very well in society with some of the drugs that have been developed over the last number of decades, so that we don't need the huge mental hospitals we had 40 years ago.

One of the challenges, then, is how do we get that community mental health care? That was one of the parts of the first ministers accord last February, which was to deal with mental health home care. We've been working away at that, but once again, it's like talking about the patchwork quilt of drug plans. There's a patchwork quilt of home care across this country, which makes it very difficult to set the minimum basket of services.

In Saskatchewan and Manitoba, we would be up here and we want to add more, but other provinces have to start from low bases.

Ms. Carolyn Bennett: Maybe we could ask the clerk that we deem that chapter 9 of the Romanow report, or whatever chapter is on drugs, be read into the record. Can we do that?

Part of that report called for a drug agency. I guess in terms of common drug review and post-market surveillance, I would say there are some advantages to having that in a collaborative way, maybe even with Quebec—if this wasn't viewed as a federal issue but as pan-Canadian cooperation on an agency.

Is that one of the Romanow recommendations you would agree with?

Hon. John Nilson: Yes, I'm very supportive of that.

I actually have a bigger vision, which is that most of my state legislator colleagues in the United States want to be part of that as well.

There's a very interesting project taking place right now in the state of Oregon, where the former governor of Oregon, Dr. Kitzhaber, who is a medical doctor, started a website with information on the review of different classes of drugs.

I know that in Canada the provinces are working together with state and federal legislators in the United States around cooperation on overall drug review. So this is not a Canadian issue or a Saskatchewan issue, but it's something that we need to do together.

When you go to meet with state legislators, as I did in Milwaukee, it's very interesting how—

À (1050)

Mr. Réal Ménard: No nation building would help?

An hon. member: They're states.

Mr. Réal Ménard: Romanow is a Bolshevik.

Some hon. members: Oh, oh!

Ms. Carolyn Bennett: On the IT system, I just have a tiny thing to ask. Obviously, the system came from inquests, which is unfortunate, but as you had four years with the identifiers off, and as you had some prescribing trends, can you just help me on this IT system you are now working towards? Is it a real time assessment, where if I'm about to prescribe a medication I can find what other drugs that patient is on, when they last billed them, and also the interreaction with whatever?

Mr. Kevin Wilson: That's correct. Initially, the first phase is that we need to collect all of the information, and that's what we're focusing on at this point. The next phase will be to move to that, where physicians and other providers would have access to that complete profile and be able to do things like a drug interaction check before prescribing.

Ms. Carolyn Bennett: Are you moving to electronic prescribing?

Mr. Kevin Wilson: That's something we would like to move toward.

Ms. Carolyn Bennett: We'd heard something about there being federal legislation against it, so would you like one of our recommendations to be to get rid of that?

Mr. Kevin Wilson: We'd agree with that.

Ms. Carolyn Bennett: In terms of moving toward that, in terms of what Robin Cameron is doing in terms of Blackberry prescribing and stuff, do you think it's safer for patients and less likely to create errors if doctors have a drop-down table with drugs spelled correctly?

Hon. John Nilson: This is a very interesting question. We're supportive of that, and we actually have some projects in Saskatchewan where we use what is called “care manager” in long-term care and we hook a number of institutions together. The place I've visited is in the east end of Saskatchewan, so it's not a very big place, but effectively they have this drug screening and they actually check the prescriptions of people as they come into their institution against a drug-based information format and then make sure there aren't the interactions.

This is something that seems to work fairly well. I've also seen the Blackberry information, and I think that's very clearly going to be part of the tools of doctors and nurses and other professionals when they work. With our health line, we have a province-wide 24-hour nurse line, and that system uses the Cincinnati protocols that have some of that kind of background information and screening as well.

Ms. Carolyn Bennett: I don't know if the chair will let me do this, but how many drugs do you throw out in your long-term care--

The Chair: Thank you, Ms. Bennett. I think your time is up. You can ask the minister after, when we close down this section.

On behalf of the members of Parliament, I would like to thank you very much, Minister, for your very thorough presentation on all the questions we raised. It's good to have the view of another person who is really responsible for how this happens on the ground, and we thank your assistants as well.

Thank you very much for coming. We appreciate it, and we may be calling you again for more details on certain of these initiatives you're taking. Thank you very much.

We'll take a seven-minute break now.

À (1054)

Á (1113)

The Chair: I ask the witnesses in the next session to come to the table now, please.

I bring the meeting back to order. On behalf of the members of Parliament, we welcome you who have prepared remarks on the issue we are studying currently, which is prescription drugs.

We'll begin the testimony with the representative of All Nations Hope AIDS Network, Margaret Akan, who is the manager.

Mrs. Akan.

Á (1115)

Mrs. Margaret Akan (Manager, All Nations Hope AIDS Network): Thank you for having me and for inviting All Nations Hope to come and bring some information to the Standing Committee on Health on what we're seeing in Saskatchewan.

First of all, I'd just like to address the misuse and abuse and addiction within the general population. All Nations Hope AIDS Network is a network in Saskatchewan of aboriginal people who are concerned with HIV/AIDS and hepatitis C in our communities. Presently, the network is taking HIV/AIDS and hepatitis C issues to the tables of many aboriginal communities and organizations in Saskatchewan. We're making efforts to target specific groups that are at risk for contracting HIV and hepatitis C. Basically we go into a lot of the correctional facilities, work with the aboriginal alcohol and drug treatment centres, and network with other aboriginal service providers in Saskatchewan.

Presently we're involved in various committees and task forces and boards to voice the needs of aboriginal people. We also have representation at a national level. We are a member of the Canadian Aboriginal AIDS Network. At the provincial level we're involved in many different initiatives. One of them is the Saskatchewan advisory committee on HIV and AIDS, which reports to the Minister of Health in Saskatchewan. We know the importance of being actively involved in the fight against HIV/AIDS and hep C. It means a commitment of people working at regional, provincial, and national levels.

When we looked at the information that was presented to us with a view to presenting to this Standing Committee on Health, one of the things we looked at was that in the aboriginal communities a lot of our members are being infected through injection drug use, through prescribed drugs in our province. Misuse, abuse, and addiction are very big issues among aboriginal people in Saskatchewan.

Our network is situated in Regina. That is where our main office is. We have individuals who are involved in the network and do some of the work with us in the major urban settings in Saskatchewan, so basically we have a good outlook on what we're seeing among aboriginal people in terms of injection drug use.

We need to look very seriously at the existing harm reduction services in this province. Last year we were involved in developing a guide that looked at some of the services around harm reduction, such as our needle exchange programs, our methadone maintenance clinics, some of our treatment programs, and also being involved in treatment centres that are focusing on providing services to the aboriginal community. When we did look at those services, the majority of the population that were accessing the services were of aboriginal ancestry.

Just to give you a bit of information about our office, we do have a needle exchange program, and the majority of the people accessing our needle exchange program are aboriginal. The majority of the clients walking through our doors for services who are living with HIV or AIDS are aboriginal, and I don't think it's not unlike any other service organization in Canada for that part. We're seeing a lot of our people being infected through injection drug use. When we look at prescription drugs, it's a very big issue in our communities.

Last year in our needle exchange program--there are three in Regina--we exchanged over a million needles, and that's for the second year in a row. It has been estimated in studies done in our city that we have approximately 2,500 active users in our city alone. I think when you look statistics-wise we've exchanged probably the most needles in any city in Canada for the amount of people we have. Per capita we've exchanged the most needles. But our prevalence studies, our statistics, have shown that we actually have a low level of HIV in cities, so that tells us it is a service and a program that has been successful in reducing the number of people becoming infected.

When we look at some of the other services, when we look at the Métis addiction centres in Saskatchewan--there are five different centres that work with people who are going in for treatment for their addiction. There are certain drugs of choice in each city. In Regina what we're seeing is Talwin and Ritalin.

Á (1120)

We have a lot of connection with the injection drug use population. They're accessing our needle exchange program in huge numbers. We also have services set up to support some of them in looking at life skills and stuff. So we do have a good, trusting relationship with the injection drug use population.

When we ask them what they're using and where they're getting it, they give us informal information. It's not information that is statistically proven, but it's information that we see coming through our doors from the actual people who are injecting drugs.

We look at that and at the needs, and what we wanted to come here today to identify is that we need to really look at this. When I speak, the information and the recommendations I come forward with are from some of the information I get from our front-line workers. We do a lot of education and training with some of the aboriginal service providers who are seeing clients struggling with addictions coming through their doors too.

So this is what I hear from them. It's also coming from the injection drug use population, from the people who are accessing our services.

We've done a variety of different surveys and interviews with this population just to find out how we can better meet their needs, so when I speak today, that is what I'm speaking from.

When we look at monitoring the way drugs are prescribed in our province, that the injection drug use population is accessing, we see our clients coming in and they're double-doctoring. They're seeing several doctors at a time and getting a prescription that they're using for their addiction. So misusing prescribed drugs from other sources is another factor. They're getting these drugs from the streets in illegal ways, and they're also getting the drugs mailed to them from other provinces and illegally selling them in Saskatchewan for the drug trade. That's what we hear from the population that uses our services.

Another new, expanded service in Saskatchewan has been the methadone maintenance program. In the last few years we've heard many stories from different front-line workers who are dealing with this population. We hear stories of misuse of their methadone among the injection drug use population.

I think we need more support in our clinics for our clients who are on methadone maintenance programs and more restriction on who actually gets placed on methadone maintenance programs in our province. Clients need to be monitored more closely. We see that as an important need in our communities.

I think we need to hear more from this population about their views on this matter, on the misuse of prescribed drugs. I think we need to go directly to the source. The misuse and abuse of prescription drugs happens because those are easily accessible to them. We need to understand exactly where they're coming from in terms of their addictions too.

With addictions, what we're seeing coming through our doors are two or three generations of family members addicted to prescribed drugs, right from the grandma down to the grandchild. It's a big problem in our cities and in our smaller communities. I think programs and services that still focus on individuals need to focus on families and deal with that in terms of looking at their addiction and really helping families heal.

Thank you.

Á (1125)

The Chair: Thank you, Ms. Akan.

Our next presenter will be Kathleen Storrie, the president of the Community Health Services Association, Saskatoon Community Clinic.

Ms. Storrie.

Ms. Kathleen Storrie (President, Community Health Services Association (Saskatoon Community Clinic)): I thank the Standing Committee on Health for this opportunity to explain the concerns of CHSA about the prescription drug situation. I just have to add that we only learned about the committee's study and your hearings on September 8, so our brief was put together in a hurry, and by a volunteer, since our staff is stretched to the limit and they simply didn't have much time to help.

CHSA is a health cooperative that was founded in 1962. We are funded by the provincial government with a citizen board. We have about 10,000 members and we serve about 28,000 patients in a clinic downtown and one on the west side of the city. We also provide physicians and lab services to Delisle, a small community about 30 miles from Saskatoon.

We take a multidisciplinary approach to primary health care, making effective use of a broad range of salaried professionals who work together as a team. We're also very involved in community efforts to try to alleviate social conditions that create poor health, and we actively advocate for change on many social issues with health implications.

We believe health care service should be universal, accessible, comprehensive, portable, and publicly administered, so we view prescribed medications not as commodities but as integral to the public good. The Saskatoon Community Clinic has long taken this view. For example, we set up the first formulary committee in Canada. One of the leaders in this work was Dr. John Bury, who will be appearing before you this afternoon.

We're also motivated by knowing the needs of our many patients who have low incomes and little or no drug coverage and so are particularly vulnerable to the high cost of medications.

Our brief focuses on issues related to consumer access to prescription drugs, the role of patent monopoly, and ways in which Canada's patent laws and certain practices of drug companies are distorting the pharmaceutical marketplace. We note the increasingly important role of prescription drugs in health care and their rising costs, which have gone up faster than any other health expenditure in recent years.

Accounts from some of our community clinic staff reveal the combined effects of accelerating drug costs and inadequate drug coverage of our clients who have low incomes. Louise Dufour, an aboriginal counsellor who works particularly with aboriginal grandmothers, speaks of the terrible dilemmas of women who are multiply ill and so are prescribed many drugs but who often don't have enough money to buy both their food and their medications.

Marilyn Mearns, the head of our pharmacy, provides further accounts of such problems and of the efforts of our staff to try to solve them. These staff members draw upon the clinic's benefit fund, use generic drugs as much as possible, and intervene in other ways. Needless to say, these pharmacists and other front-line staff, such as our physicians and counsellors, are continuously frustrated by their daily encounters with these distressing situations.

Together with other organizations, such as the Government of Saskatchewan, we believe the changes to Canada's patent laws and the accompanying patented medicinesregulations have delayed the entry of cheaper generic equivalents and so have blocked one means of lowering the high cost of prescription drugs. We are very disturbed by the way drug companies can get automatic injunctions against generic firms by merely alleging patent infringement and so can create years of delay in court.

We also note such factors as the extraordinary profits of the pharmaceutical industry, the fact that most new drugs do not offer any significant improvements over existing therapies, and the massive amount of money spent on marketing to and lobbying of professionals, thus putting such persons at risk of conflict of interest. We are repelled by other practices too, such as direct-to-consumer advertising, and recommend that the Government of Canada take all necessary steps to prohibit such advertising. We also recommend that this committee investigate the negative effects of Canada's trade agreements on Canadian access to generic drugs.

CHSA supports a national pharmacy program, specifically the recommendations of the Romanow commission for a new catastrophic drug transfer, a new national drug agency with wide-ranging powers to monitor and regulate all aspects of prescription drugs, a national prescription drug formulary created by the national drug agency, and a new program on medication management in primary care. On the subject of patent law, we recommend that the notice of compliance regulations that lead to automatic injunctions be repealed.

Á (1130)

Our administrator, Patrick Lapointe, is also here today, and we'd be happy to answer any questions and have discussions with you.

Thank you.

The Chair: Thank you very much, Ms. Storrie.

Our next presenter is from the Saskatchewan Health Coalition in the person of the president, Mr. Dale Holmberg.

Mr. Holmberg.

Mr. Dale Holmberg (President, Saskatchewan Health Coalition): Thank you, and I want to thank the standing committee for the opportunity to make a submission.

My interest in this subject comes partly from my involvement in the Saskatchewan government and general employees union health and welfare trust, which is responsible for the dental and extended health benefits of a number of bargaining units, and mainly because of the struggle that smaller units have had in obtaining extended health benefits and retaining them in the face of escalating drug prices. Driven largely by drug costs, which make up 60% of the benefits paid out, premiums for our single rate increased by 537% and our family rate by 420% in less than ten years.

The length of patent protection and the related regulations regarding the production of generic drugs have become more and more important as Canada has become increasingly dependent on imports to supply our pharmaceutical needs. When Bill C-91 was passed, imports made up about 34% of the Canadian market. By 2000 their share of the market had more than doubled to over 75%. On top of that, by 2001, sales of expensive patented medications made up nearly two-thirds of total drug sales. The result was skyrocketing drug costs.

The 20-year patent protection that the pharmaceutical companies extracted from the U.S. and Canadian governments and have been able to impose worldwide through the medium of the World Trade Organization is nothing less than a licence to print money.

A study of the Fortune 500 rankings for the most profitable industries going back to 1988 demonstrates how dominant the pharmaceutical industry has been. In every one of the past 15 years, pharmaceuticals ranked number one in return on revenues. In the last five years, their profits as a percent of revenues have averaged 18.2%. It will probably come as no surprise that commercial banks have ranked second in return on revenues during the past decade. However, while banks are rather notorious for their profit margins, they have not been able to equal the profits of the pharmaceutical industry. In the last five years, banks averaged a return of 14.7% on revenues, significantly lower than the pharmaceutical industry. In fact, over the five years, pharmaceutical companies averaged a 23.8% better return than the much-maligned banks.

Historically, pharmaceuticals have outperformed the second-ranked industries by as much as six percentage points. As well, in every one of those 15 years, pharmaceuticals ranked number one in return on assets. In the last five years, their profits as a percent of assets averaged 16.2%.

Four different industries have occupied second spot over the five years. They averaged a return of 11.6%, again significantly below the first-ranked pharmaceutical industry, and there has been as much as a 6.8 percentage point spread between pharmaceuticals and the second-ranked industry.

Finally, in 11 of the 15 years, pharmaceuticals ranked first in return on shareholders' equity. In the other four years, when widely divergent industries occupied top spot, they were second three times and third once. In 1997, the year they ranked third, their profits as a percent of equity were a hefty 29.3%. In the three years they finished second, their profits were never lower than 27.6%.

However you gauge profitability, by return on revenues, assets, or equity, the pharmaceutical industry has dominated the Fortune 500. But it gets better--or worse, depending on your point of view.

A study by Deborah Socolar and Alan Sager of the Boston University School of Public Health points out that the profits on prescription drugs themselves are higher than is suggested by the published and publicized figures from their annual reports and Fortune 500 data.

Many drug makers have other lines of business that drag down overall profits.

Á (1135)

In 1999, for instance, Merck reported overall profits before taxes of 26.3%. When other components were stripped away, however, its prescription drug business registered an obscene 37.4% return on revenues.

While 20-year patent protection has enabled pharmaceutical companies to make unconscionable profits, people are forced to go without the drugs they require to keep them healthy. While few Canadians are dying as a result, that isn't the case internationally. The AIDS holocaust is killing millions in developing countries. The recent announcement by the industry and international trade ministers that the federal government will take steps to amend the current patent legislation to allow generic drug manufacturers to produce some patent-protected drugs and export them to developing countries is welcome news. However, even if this new initiative does overcome the considerable hurdles it will face and actually get sufficient AIDS drugs to the 42 million mostly poor people in developing countries infected by HIV, it will not solve the problem of access to drugs in general, nor will it solve the problem of the high cost of drugs in developed countries. That will only come when the decision-makers place people before profits.

Thank you.

The Chair: Thank you, Mr. Holmberg.

We'll move on to the question and answer section of our meeting, and we'll begin with Mr. Ménard.

[Translation]

Mr. Réal Ménard: Thank you

[English]

I'm going to speak in French. I expect Monsieur Lapointe will be able to understand? No? All right. It's going to be on channel one.

[Translation]

I would like to go back to Mr. Holmberg's example, but I would like you to be more specific. If I got it right, you have to negotiate group insurance plans for workers, including pharmacare plans. But you are telling us that in your negotiations, you have found that some of the potential insurers increased the premiums by as much as 500%. I would like you to express your views very clearly so that we can quote them in our report. This situation is very significant, and that is why we need to make very specific recommendations.

[English]

Mr. Dale Holmberg: I didn't bring along any of the specific information. What I can tell you is that in 1992 the Romanow government increased the annual drug plan deductible by 204%, to $380 from $125. The following year our carrier increased our premiums by 120%, and the next year they were going to increase them by a further 150%.

[Translation]

Mr. Réal Ménard: What I am making out of your remarks is that Mr. Romanow is suggesting a Canadian pharmacare plan when he is personally responsible for the increase in the premiums of your own provincial pharmacare plan.

Of course, these are considerations dealing exclusively with a provincial policy on which we will not comment, but I understand that when a public pharmacare plan raises its premiums, it is a signal for the private sector to follow suit. From what you said, I understand that this would explain the increases you have been talking about.

[English]

Mr. Dale Holmberg: For sure. But it wasn't just the Romanow government. It was governments right across the country, Quebec as well. Part of that was definitely in response--maybe theirs came a bit later--to what happened as a result of the introduction of Bill C-22 in 1987 and Bill C-91 in 1993. The drug patent protection was increased to seven to ten years by Bill C-22 and then 20 years by Bill C-91. Also, unfortunately, it got rid of compulsory licensing, which was a system that worked well.

Á (1140)

[Translation]

Mr. Réal Ménard: In Canada, Ontario is the only province that really froze the cost of drugs. I had a research paper written for me on this subject, I would like to table it with our clerk so all my colleagues can peruse this information. I do not want to discuss this appropriate or not, but the fact is that drug costs in Ontario have been frozen for two years.

Do you think we could recommend to the federal government that it should ask the provinces to freeze the cost of drugs, with some kind of compensation coming out of a special fund?

Right now, the federal government approves the drugs that are put on the market and authorizes their sale. Not a single drug can be sold in Canada without research on and a notice of compliance for each drug. But the provinces do have to pay for the drugs. So they have much closer links with the retail market than the federal government does. As federal lawmakers who do not want to intrude in provincial jurisdictions -- there is a consensus in this committee on this -- how could we suggest a two year freeze on drug costs? We could ask the federal government to provide to the provinces some kind of compensation from a special dedicated fund.

In his report, Mr. Romanow suggested a fund for catastrophic drug costs. It is not drugs that are catastrophic, but the situation of the patients who have to pay for them. Keeping the Ontario example in mind, do you think we should tend to freeze drug costs with some form of indirect federal assistance?

[English]

Mr. Dale Holmberg: Considering the profits that the drug companies have made, I see no reason why we couldn't freeze the price of drugs. I also support a national pharmacare program, because I think if you have one huge organization that is responsible, it can put pressure on the drug companies to lower the price of drugs. That's what happens in the United States. For the large health plans the drug companies will lower their prices by as much as 50%. The people you're getting up here looking for drugs are generally going to be the ones who aren't covered by drug plans, because, of course, they're the ones who end up paying the highly inflated prices. I think a national pharmacare program could definitely have some impact on driving down drug prices.

[Translation]

Mr. Réal Ménard: Yes, but who is going to pay? A national plan could be interesting. Indeed, Prime Minister Chrétien created a national forum on health whose main recommendation was to set up a Canadian pharmacare plan. But it is the provinces and not the federal government that are paying for the drugs.

How could we set up a plan that gives some protection to the public and in which the federal government would be paid part of the cost of drugs, but without any intrusion in provincial jurisdiction?

Quebec already has a pharmacare plan. Saskatchewan had one before we did. How many provinces have a pharmacare plan now? Five or six? We need to know how much the federal government would contribute. You are getting the idea, are you not? The federal government should not give any direct compensation for drugs.

[English]

Mr. Dale Holmberg: I don't know how you resolve the issues between the federal and the provincial governments, but as I said, I think it's pretty important that this be done on a national scale.

Mr. Patrick Lapointe (Administrator, Community Health Services Association (Saskatoon Community Clinic)): It seems to me that the federal government does get involved in support concerning the excessive cost of drugs. For instance, the federal Department of Indian Affairs, which works with aboriginal people in support of drug costs, are also experiencing the consequences of the excessive cost of drugs.

Also, are there not still social transfers related to people on social assistance in order to support coverage for drugs?

I think there's a real investment that the federal government can make related to supporting a national drug program, not only related to helping support the costs it has directly, but if they can be a leader in Canada, banding the provinces together in a shared interest of trying to contain costs at reasonable levels and assuring drugs are readily available to all those who need them, it's in the best interest of the nation as a whole.

Also, it has always puzzled me deeply that drugs aren't seen as part of what's core in medicare in Canada. They'll support the cost of persons getting primary health care or support the costs of acute care under the Canada Health Act, but somehow medications are not seen as a core part of what coverage should be.

If you do not ensure people have access to drugs such that they do acquire the drugs that are necessary for their health, then what happens is, for instance, persons who have hypertension and can't afford the cost of the drugs, if they don't take their hypertension medication--and we see this all the time--they end up in the hospital at great cost to the system. The same thing is true for people if they have various kinds of heart disease and don't take their drugs.

In my own family, my mother-in-law was telling me that my father-in-law wasn't taking his medication for his heart and he'd had to go to the hospital. They're on a fixed income. I said, Mary, why is this? She said, we can't afford it. She says he takes his drugs only every second day.

I was very happy to hear about it, because we could intervene as a family, but we hear about this at the clinic often, that people are simply not taking the drugs they need in order to support their own health, and there are huge economic consequences for the whole of the health care system.

Á (1145)

The Chair: Thank you, Mr. Lapointe. Thank you, Mr. Ménard.

Mr. Thompson.

Mr. Greg Thompson: Thank you, Madam Chair.

I would like to comment on the brief that was presented by Kathleen Storrie, the Community Health Services Association.

In that brief, Kathleen—I read through it in addition to listening, of course—I get the feeling that you've identified the patent drug companies as, what would you say, the perpetrator, as the problem. I don't disagree with you on that in terms of some of the profits they've generated, which was emphasized by Mr. Holmberg and others, as we've heard. But one of the things I want to bring to your attention, and maybe you already know this and have identified this problem, is that generic drug companies aren't completely innocent. We sometimes hear this term “generic”, and we hear that if only the patent laws expired, these generic companies could then provide the drug more cheaply and efficiently. We wouldn't be tied into the types of prices we're subjected to now, if only patent law was not there.

The truth is, as we've heard this morning from the minister, your own health ministry here in Saskatchewan, and we've been hearing this across the country, that generic prices in Canada are 21% to 50% higher than in the United States. We do understand and we believe that the Patent Medicine Prices Review Board is working, and working well. I think the evidence of that is reflected in terms of our price structure vis-à-vis the United States or even the European countries. We're doing okay. We could do better. I think that's part of your argument. But I think we're letting the generics off too easily. I think they are not practising good medicine, if you will, or good ethics in the marketplace.

In addition to those higher prices, and again those numbers were supported by the minister this morning, we hear of all these elaborate...now I could use a euphemism and say incentives for prescription, but I might use a blunter word like kickbacks. We've heard from medical doctors, some of whom sit on this committee, that it's routine for generic companies to provide doctors with kickbacks in terms of everything from trips to extra moneys for pushing a generic drug versus another, and even a cheaper supply of generics. There's a lot of discretion obviously at the pharmacy level in terms of what is going to be prescribed. Unless a doctor writes “no substitutions”, they can easily push it over to a generic and they're generously rewarded.

I guess part of what I'm suggesting, and I think all of you can address this, is that part of that increase, part of that higher cost we are subjected to in Canada by the generic drug companies—anywhere from 20% to 50%—is something they themselves have manufactured. In other words, if generics can be sold in the United States more cheaply, why can't they be sold in Canada more cheaply? I think that is something we have to deal with.

Aside from the patent drug legislation in terms of expiry and so on, could all of you comment on that? Maybe I'd ask Ms. Storrie to start off.

Á (1150)

Ms. Kathleen Storrie: Well, I'm not an expert in this area at all, but certainly just from the point of view of our concern for our patients, that is an undesirable situation. I would have thought, though, that the relative size of the pre-patent medicine industry would be a reason why we should focus particular attention on them.

Mr. Greg Thompson: Ms. Storrie, I just want to interrupt. I don't want to object to anything you've said. I don't, in any way. I just want to remind you in the committee that in Canada basically there are two generic companies that control the entire industry in Canada. Two companies. With respect to the patent medicine companies, there is a wide range of patent medicine--

Ms. Carolyn Bennett: We don't know the profits.

Mr. Greg Thompson: And we don't know the profits. That's the other thing. I just want to point that out to you, because sometimes we focus only on the patent medicine group with licences. The truth is that the generic companies are very clever, almost more clever than the patent companies, in perpetrating this myth that their drugs are cheaper and they're doing a good job. The big enemies are patent drug companies.

I just want to put that on the record, Ms. Storrie.

Mr. Patrick Lapointe: What happened in the Saskatchewan experience was that over time the provincial government was able to negotiate better costs for drugs.

Mr. Greg Thompson: From what group? From the generic drug companies?

Mr. Patrick Lapointe: I think from both—from the generic drug companies and from the patent companies—is my understanding.

Mr. Greg Thompson: I guess your definition of better varies, doesn't it? Better than what—better than what it could be or better than what it should be?

The Chair: Better than what it had been.

Mr. Patrick Lapointe: That's right. That might be better. How do I answer that question?

Our point is that if there was a national drug program, ideally what could happen is you could set up an agency that would negotiate with both the generic and patent drug companies to get the cheapest drugs for Canadians.

Mr. Greg Thompson: Again, if you compare to the European examples, we're basically on mark with the European companies, where some of them do have prescription plans, if you will, pharmaceutical plans. I would say that some of that logic is lost in the numbers.

I'm not disagreeing with the concept; I'm just saying I don't think there's any clear evidence out there that going to a pharmaceutical plan will in fact drive down prices.

Mr. Patrick Lapointe: You might want to consult with the Saskatchewan government about this, because my understanding is that they were able to negotiate lower costs for drugs than were available for other provinces that didn't take the course.

Mr. Greg Thompson: Maybe that's an examination we should undertake, and I should do some research on that myself, because I'm not in a position to identify, for example, the difference for a particular drug in Ontario versus Saskatchewan versus New Brunswick. My belief is there's not a huge difference.

Despite the fact that you're getting that generic drug X at a cheaper price, my argument is it is still overpriced by 21% to 50%, based on evidence provided by the minister here this morning. If we take a look at generic drugs in the United States, they don't have a universal health care program or prescription plan, if you will. Why would generic drug prices be 21% to 50% cheaper in the American system where they don't have plans, where they're all left out of a plan, whereas Saskatchewan does, but you're still paying 21% to 50% more? I'm arguing that even though you're getting a deal compared to what you used to get, it's not as good a deal as you could be given, because these people are still “manipulating” that price.

Á (1155)

Mr. Patrick Lapointe: Where we're at as a citizen organization is for the federal government, in conjunction with the provinces, to get themselves in the position to bargain for the best interest of Canadians. We'd be delighted to see that happen.

The Chair: Thank you, Mr. Thompson.

Ms. Bennett.

Ms. Carolyn Bennett: Thank you very much.

My first question is for the All Nations Hope AIDS Network. My concern is a little bit around how we change physician behaviour. These people are actually victims of somebody writing a scrip for something that really isn't indicated and really isn't in the best interest of the patient. Do you have any feedback mechanism to the College of Physicians and Surgeons in Saskatchewan? How do you help with that other piece as to the people who really need help in other ways and us closing other loopholes?

Mrs. Margaret Akan: Historically, what we've done in the past is when we are approached by family members of individuals who have died of overdoses or tragic deaths associated with their addiction, we've written to the College of Physicians and Surgeons our concerns around some of the methadone maintenance treatment programs. I guess the injection drug use population is the population that does not voice their concerns, so that is why we have been involved in that area and looking at some of the services and programs that aren't really meeting their needs.

That's primarily why we sit on a variety of different committees, task forces, advisories, and boards to address some of the issues that we're seeing walk through our office, some of the problems that are associated with injection drug use. Individuals who are accessing the prescribed drugs talk about how they get them, and it's very informal interviews that are done. We know which physicians in Regina prescribe the drugs to the addicts, and the addicts are going to different cities, not only in this province but in other provinces, to get the drugs under prescription. How do you look at what is happening under prescriptions?

Ms. Carolyn Bennett: How many doctors prescribe methadone in Saskatchewan?

Mrs. Margaret Akan: There is a list. I don't have the number here.

Ms. Carolyn Bennett: Are they hooked up?

Mrs. Margaret Akan: They're under the College of Physicians and Surgeons in Saskatchewan, and they have to apply for a licence to prescribe methadone in the province.

Ms. Carolyn Bennett: Is there a way of making sure the same person isn't getting methadone from two different doctors?

Mrs. Margaret Akan: Methadone is probably not the problem. The problem in Regina is Talwin and Ritalin, in Saskatoon they've got their own drug, and it's a prescribed one, and the same thing with Prince Albert, which are the key cities in the province. So they're all prescribed drugs, but they're each different. But methadone is not a problem. It's, again, a myth on the streets and in the communities that addicts are buying methadone. They're not buying methadone; they'd rather buy their drug of choice, because it's easily accessible. The cost is no different.

Ms. Carolyn Bennett: And if there was a capacity.... Some of us think there should be some sort of IT backbone for the country, such that if you live in Hull and work in Ottawa, somebody can look up your record. One of the things that has always astonished me is that with the soldiers on the base in Edmonton, their families live in Edmonton, and those records are put together in any way. It would be helpful for people to know what was happening with drug prescribing across a border. I'm chair of the disability committee, and the Lloydminster problem has always been hysterical to me. If you move across the town, you have to return your wheelchair to one province and pick up a new one in the other. There's some stuff that doesn't really sound much like a country. So are you saying that a system where physicians and people like yourselves could find out what somebody got from just crossing the border would be helpful, even within this country?

Â (1200)

Mrs. Margaret Akan: Yes.

Ms. Carolyn Bennett: Okay.

To the Community Health Services Association, the model you represent is one I think lots of Canadians see as a great one, especially if you look at your partners in the community listed on the back of your submission. Do you know where you could point the committee to show that the prescribing practices of physicians in a model such as you have, where there are lots of social workers, mental health rehab, addiction counselling services, and all of that, are optimal, more a last resort than with solo practitioners and fee for service?

Mr. Patrick Lapointe: The provincial government did a study of community health centres in 1983, and one of their measurements of whether clinics were economic, efficient, and effective compared to fee for item of service practices was the volume of prescriptions. What they found was that we prescribed 20% fewer prescriptions per 100 clients than did the fee for item of service world. That's one measure. There are all kinds of qualitative issues, whether we now prescribe or not, whether we prescribed the appropriate kinds of drugs, and all those kinds of things, but that was one measure whereby they were realizing that the way we practised was significantly lowering drug costs.

Ms. Kathleen Storrie: We can't produce the statistics to show this, but just imagine the situation where people are receiving social supports, for example, who otherwise would be very isolated. There are all kinds of situations that make people extremely vulnerable to wanting to take a lot of drugs and so forth. From that point of view, our people at least get a lot more social support. With the partnerships as well, there are a whole lot of efforts made to provide that kind of social support to people. That's just one way to look at it.

The Chair: Thank you very much.

Thank you, Ms. Bennett.

On behalf of the committee members, I would like to thank all of you who came forward with your presentations, sharing your experiences with us on this prescription drug issue, or set of issues really, that we're trying to struggle with. We're very happy to have Saskatchewan input from people who are on the front lines. So thank you very much.

We'll adjourn for lunch now and return at one o'clock.