Mr. Chair, members of the committee, Auditor General, ladies and gentlemen, I'm pleased to be here today on behalf of Veterans Affairs Canada. Joining me today is Michel Doiron, the assistant deputy minister for our service delivery branch, and Retired Captain Dr. Cyd Courchesne, our chief medical officer.
I wish to thank the Auditor General and his staff for their ongoing contribution to assist the department in achieving effectiveness, efficiency, and accountability as we support the well-being of our veterans and their families.
As the Veterans Affairs Minister, the Honourable Kent Hehr, indicated, immediately following the tabling of the Auditor General's report, we accept all of the report's recommendations. We are taking immediate action to ensure the health care benefits program is efficient, valued, and supports the needs of our veterans.
To give you an idea of its size, in fiscal year 2014-15 the Veterans Affairs drug benefits program supported the costs for drugs for approximately 51,000 veterans in the order of $80 million. While the report found that most of the 2004 Auditor General recommendations related to the program were implemented, it did highlight areas for improvement with corresponding recommendations.
The media coverage is concentrated on the cost of marijuana for the Government of Canada and on maximum doses, which risks diverting attention from the fact that the report discusses all drug benefits.
We find as well that sometimes the department's role in the payment of drug benefits could be misunderstood. To clarify, it is Health Canada that is responsible for the regulation of medications for all Canadians, including our veterans. Veterans Affairs Canada does not prescribe medication; rather, it pays for medical treatments authorized by the veteran's physician or health professional.
To review, the Auditor General's report found the following key four points.
First, we do not have an adequate process in place to make evidence-based decisions related to our drug benefits list. Second, we should review our cost-effectiveness and program efficiency strategies. Third, we need to contain the rising costs of marijuana for medical purposes. Finally, we have not analyzed the use of drugs that are not on our drug list but are accessible, on a case-by-case basis, to eligible veterans.
Implementing the Auditor General's recommendations will help us to better achieve our goal of supporting the health and well-being of our veterans in an efficient and effective manner.
I will now briefly discuss VAC's current or planned activity in relation to each of these priority areas.
First and foremost, we need to ensure that systematic evidence-based reviews support our decisions with regard to the drug benefit list. To determine which drug should be included on our list, we look to the expertise of the Canadian Agency for Drugs and Technology for Health. Once Health Canada has approved a drug for use in Canada, this independent agency relies on an advisory body to review clinical cost-effectiveness and patient evidence, and makes recommendations about listing it on provincially-based, publicly-funded drug plans.
A Veterans Affairs national pharmacist was hired last year and is working now with public health plan counterparts to identify best practices in formulary management. An enhanced drug benefit management team is now reviewing the program and developing a strengthened decision-making framework which will identify the types of evidence to be considered, when to consider them, and how they will be assessed to make formulary decisions.
We're also improving timely access to a pharmaceutical support program for those men and women being released from the Canadian Armed Forces. For example, last year in April we implemented changes to ensure that retiring sailors, soldiers, airmen and women continue to receive the same drug benefits from Veterans Affairs that they were receiving from the military based upon drug history and their eligibility for Veterans Affairs programming.
Veterans Affairs Canada will examine and assess the cost effectiveness of its drug list with its federal partners and the Pan-Canadian Pharmaceutical Alliance in order to improve cost effectiveness by May 2017.
The department will leverage its partnerships with Health Canada and other federal drug plans and jurisdictions, and consult with private industry to identify opportunities to implement cost-effective strategies for our program.
Further, Veterans Affairs Canada will regularly assess and review its drug benefits list and claims data. This analysis will inform program changes to help reduce the administrative burden for veterans and lower the costs for delivering the program.
With regard to marijuana for medical purposes, it would be worthwhile to review the context of providing access for marijuana for medical purposes to our veterans.
In 2001, Health Canada began providing controlled access to marijuana for medical purposes to Canadians. It controlled the adjudication of requests, product distribution and costs, as well as setting consumption limits. Supporting regulations outlined which health conditions marijuana could be approved for and which specialists could prescribe marijuana for medical use.
In the Canadian health care system, as I mentioned, the veteran's primary care physician is responsible to determine the appropriate health care treatments to meet his or her patient's needs.
In 2007, based on the approval of a senior manager, the department approved the payment for marijuana for medical purposes on an exceptional basis for one client for compassionate reasons. Starting in 2008, Veterans Affairs allowed for coverage of costs related to marijuana for medical purposes for eligible veterans who were approved by Health Canada. In fiscal year 2008-09, five clients were reimbursed, with expenditures in the order of $19,000. By 2013, these numbers rose to 112 approved clients with expenditures in the order of $400,000.
In 2014, Health Canada introduced regulatory changes that reduced its role to regulate and licence private producers. Restrictions were removed on the quantity of marijuana that could be authorized by physicians and the price was established by private producers licensed by Health Canada.
Based on these changes, Veterans Affairs Canada instituted a practice to approve requests from eligible veterans for up to 10 grams per day if authorized by their physician or health care practitioner, and if they are registered with a Health Canada licensed producer. The Veterans Affairs director general of health professionals, who is also Dr. Courchesne, reviews any requests that exceed the 10 grams per day. While six such requests were approved previously and now grandfathered, no amounts greater than 10 grams per day have been approved under the current guidelines.
Since 2014, the number of veterans using marijuana for medical purposes and the associated expenditures have increased significantly.
Earlier this year, the Minister of Veterans Affairs, the Hon. Kent Hehr, requested a departmental review to assess how we provide marijuana for medical purposes as a benefit to veterans.
This departmental review, including various consultations, was launched in order to assess the current approach to providing marijuana for medical purposes to veterans as a medication. We will be able to take stock of the review in the coming months.
Departmental representatives are consulting medical specialists, suppliers and veterans who have been prescribed medical marijuana in order to learn more about the issue. These consultations are intended to help devise an effective monitoring approach to ensure veterans' well-being.
With respect to monitoring drug utilization, I wish to assure veterans and their families that there are existing alerts in our drug benefits system, as well as at the pharmacy and provincial health care system levels. Nevertheless, we absolutely agree that we need a clearer approach to monitoring drug utilization and detecting trends.
We will ensure that our monitoring practices are systematically reviewed to ensure optimal efficiency, while taking advantage of the best practices of other departments and jurisdictions. Strengthened processes will include regular and documented reporting to our formulary review committee.
All changes to monitoring by VAC of medication use will respect the fact that veterans' health care is mainly the responsibility of their physicians or the accredited health professionals and the health care system.
Mr. Chairman, ladies and gentlemen, I want to assure you that the work is under way now to address our shortcomings, and we will have completely addressed each of the recommendations in the Auditor General's report by the spring of 2017.
Again, I wish to thank the Auditor General and his staff for their work and assistance in supporting the well-being of our veterans, and I thank you for your attention.