Canada's Federal Health Minister Jane Philpott has announced consultations on pharmaceutical pricing reforms.

May 19, 2017

Federal Health Minister Jane Philpott addressed the Economic Club of Canada in Ottawa on May 14, 2017 and announced consultations on proposed regulatory changes that would target “unacceptably high drug costs.” The lack of reform in drug purchasing in Canada has contributed to rising Canadian patented drug prices, which are among the highest in the world.

The Patented Medicine Prices Review Board (PMPRB) is tasked with regulating the prices of patented medicines sold in Canada to ensure that they are not excessive. When reviewing the price for patented drugs in Canada they are benchmarked comparing costs paid by other countries. The United States is one of the countries presently used as a comparator benchmark, which pays double the cost for drugs than any other country. One proposed change to the regulations would be to benchmark the costs for patented drugs to align with countries that are more like Canada in relation to research and development investments.    

During the Minister’s keynote speech, she mentioned other areas where changes will be made to improve drug access and affordability for Canadians. An example of a formulary with soaring drug costs is the federal government’s own non-insured drug benefit plan for First Nations and Inuit which saw an increase of over 9% in 2016. Biologics and specialty medicines were identified as the cost drivers for not only this plan but for all drug formularies across this country, be they public or private.

Although no announcement was made for a National Pharmacare Plan, the government is working on the development of a Common National Formulary that will include a list of essential drugs negotiated in bulk and that will be available equitably for all Canadians no matter where they live in Canada. Equitable drug access across the country has been a major issue for those living in provinces with limited formularies. There was even a quick mention on the development of a common drug formulary for seniors but no details were provided in her speech.

Health Canada will fast track new life saving drugs for approval by reducing unnecessary burdens to market and will find ways to reward innovative pharmaceutical companies. A pilot project is already in place to advance this objective.

Other areas for improvement to drug access and use will focus on the over-prescription of medications which will be tackled with the use of Electronic Medical Records (EMRs) and electronic prescribing. The Canadian Institute of Health Information (CIHI) and Canada Health Infoway have been given the mandate to develop an e-prescribing strategy. A B.C. led study shows that inappropriate prescribing is costing over $400 million a year, whose harms, including death, often outweigh their benefits in patients over the age of 65. Another investment of $1.8 billion can be attributed to indirect costs like hospitalizations stemming from side effects,  which can cause falls and fractures because of drug interactions. The work of Choosing Wisely Canada was also commended by the federal Health Minister during her speech, for helping to educate health care practitioners and patients on inappropriate treatments. 

What do these changes mean for Association members? Bulk purchasing of drugs and a common national formulary will translate into cost savings for the Public Service Health Care Plan and could help control the contributions you pay every month for the plan. A common national seniors formulary will control costs for provincial drug plans and the costs you pay as a taxpayer.

Minister Philpott’s announcements herald a bigger vision and are an essential component of a National Seniors Strategy, a key advocacy goal of this Association. 

If you are interested in providing input on these changes as an individual, you can reply to the open consultation from now until June 28, 2017. More information is available from Health Canada.