An outfit called Innovative Medicines Canada has made the government of Canada an offer. IMC is a lobby group for the pharmaceutical industry.
Perceptively, they sent the proposal to Health Canada. Perceptively, because this most useless of federal ministries doesn’t know how to say no.
These are the same folks who will licence any drug, without regard for cost or effectiveness, so long as some other country has already done so.
That causes untold misery and anger down the line when the provinces, who must foot the bill, refuse to list an ineffective or overly expensive drug, and patients are understandably outraged: “But Health Canada gave it a licence. So it must be OK.”
I called this proposal an offer, but in reality it is nothing short of a bribe.
Here’s the deal. If Health Canada will force the agency that sets maximum prices for drugs to water down its rules, IMC will pay the government $1 billion.
The agency in question is called the Patented Medicine Prices Review Board. Recently, it announced tougher standards that the industry strenuously objects to.
Previously, the prices review board used an average of drug prices in 13 countries to set a benchmark price for any new medication in Canada.
But the comparator countries included the U.S. and Switzerland, which together have the highest drug prices in the world.
So the first change is to dump those two countries, thereby reducing the maximum that Canada will pay. Note, in passing, that some drugs can cost more than $2 million a year per patient. This is not a small matter. More in a moment.
Second, the prices review board will now assign an “adjustment factor” to the price of any new drug. That factor is based on the drug’s proven effectiveness.
A less-effective medication will have its price reduced by between 20 per cent and 50 per cent. Effectiveness here is based on internationally recognized standards of patient improvement.
Pharmaceutical firms hate this whole concept. That’s one reason for the bribe. They want these adjustment factors either killed or scaled down.
Now let’s return to the cost issue. The industry demands high prices for new drugs, supposedly to cover its R&D expenses.
But first off, we have no idea what those expenses actually are. Drug companies refuse to open their books. That, in itself, is grounds for suspicion.
No one is suggesting they open their books to the public. They live in a competitive environment. They are entitled to guard their business arrangements.
But there is no reason why a major purchaser like the government of Canada could not see the R&D costs we are being asked to pay for, in return for a promise of confidentiality.
Second, a huge part of those R&D costs are, in fact, funded out of the public purse. Western governments have spent billions to support the research looking for a COVID vaccine.
But do you suppose Moderna Inc., which recently announced successful trials of a new vaccine, will factor that into the price they set? I wouldn’t count on it.
Hopefully, Health Canada will find some backbone and tell the IMC where they can put their bribe.
Though I suppose the downside is that the prime minister might awaken one night to find a horse’s head in his bed.
