Opinion: Use COVID pause to reconsider drug-price regulation
Published in the Financial Post January 18, 2021, written by Nigel Rawson and John Adams
Canadians need Ottawa to work with the pharmaceutical industry, clinicians and patients to improve access to new medicines and vaccines
Patrick Quinn, co-founder of the 2014 “Ice Bucket Challenge,” created to increase awareness of ALS (amyotrophic lateral sclerosis) and raise funds for research into new treatments, died of the unrelenting lethal disease on Nov. 22. He was just 37 years old.
ALS is diagnosed in about one in 50,000 people each year. It gradually paralyzes its victims as their brains cease communicating with their muscles. Sufferers lose the ability to walk, talk, eat, swallow and eventually breathe. ALS victims rarely live longer than five years after diagnosis. The wife of one of us (Adams) died of ALS in 2014.
Two drugs (riluzole and edaravone) have been approved for ALS in Canada. They are only moderately effective and do not stop the disease. Edaravone is only available because patients lobbied its Japanese developer to bring it to Canada. The Patented Medicine Prices Review Board (PMPRB), the federal tribunal that sets ceiling prices for new patented medicines, established an unacceptably low price for the drug. The manufacturer responded by surrendering its Canadian patent in order to escape the PMPRB’s bureaucratic hands — only patented medicines come under its control — and allow Canadians with ALS to get the drug. Giving up patent rights is a risky business practice and a troubling warning about medical research and innovation in Canada.
The day after Patrick Quinn’s death, the House of Commons Standing Committee on Health met to hear why the PMPRB wants more regulations, including: replacing higher-price countries with lower-price ones in its international comparisons; introducing economic tests to determine prices; and requiring manufacturers to report details of confidential rebates negotiated with public and private insurers.
The new regulations have the potential to require drastic reductions in drug prices, which will make Canada a much less attractive market for launching new medicines. The result will be significant delays in accessing new drugs — or even no access — because developers decide low price ceilings, together with complex health technology assessments and harsh price negotiations, are not worth the trouble.
Sixty-eight briefs from individuals, patients, manufacturers, unions and associations have been submitted to the Standing Committee regarding the new regulations. Full disclosure: we were involved in three.
Nearly 90 per cent of the briefs were concerned about the reforms’ likely negative impact on access to new medicines and vaccines in Canada. Not surprisingly, almost half of these were submitted by biopharmaceutical manufacturers and allied organizations. They were not alone in their concern, however. Most health-care professionals also opposed the changes. The exceptions were unionized nurses and a physician group dedicated to our single-payer, publicly funded health system.
Almost all patients submitting briefs had concerns about the new rules, including two from associations worried that new drugs for ALS being tested in other countries will not make it to Canada, either in clinical trials or as approved treatments.
Only nine briefs supported the changes, including one from private insurance companies seeking to reduce their costs through government regulation. Seven other briefs were from academics and labour unions with a strong dislike of the biopharmaceutical industry. Not counting a few anti-industry activists, there appears to be little support for the reforms.
The new regulations were to be in place this month, but Health Canada has postponed implementation until July because of COVID-19 and to provide “industry with additional time to prepare.” This second government delay — the new rules were originally supposed to go into effect July 2020 — signals a need for comprehensive reconsideration.
The postponement also follows on a Quebec Superior Court decision in December striking down the PMPRB’s requirement that manufacturers report details of confidential rebates to insurers. Both an earlier Federal Court decision and the Quebec Court found that the PMPRB is “not empowered to control or lower prices” without evidence of excessive pricing. These judgments may be the real reason for the latest delay.
No other industrialized country uses economic value assessments to determine prices by regulation, as distinct from negotiation. Canadians do not need yet another barrier to access to new medicines. Instead, they need Ottawa to work with the pharmaceutical industry, clinicians and patients to improve access to new medicines and vaccines.
dy. A reasonable compromise would be that Ottawa implement the change in the international price comparison but remove economic factors in determining prices.
New drugs are on the horizon for ALS and many other diseases for which no treatments exist. Although polls indicate most Canadians want lower drug prices, they do not want access to innovative medicines to be delayed or denied. If Ottawa continues to listen only to the PMPRB and a few anti-industry activists, more Canadians with diseases like ALS will die without hope.
Nigel Rawson is an independent researcher and affiliate scholar with the Canadian Health Policy Institute. John Adams, co-founder and CEO of Canadian PKU and Allied Disorders Inc., is volunteer board chair of the Best Medicines Coalition.