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The Pursuit of Perfection or Corporate Power Delay Tactics in Reforming Drug Pricing in Canada?

Updated: Jan 22, 2023

The Canadian Federal Health Minister, Jean-Yves Duclos announced that the regulatory amendments from the Patented Medicine Prices Review Board (PMPRB) would be delayed. The PMPRB is Canada’s federal regulator for defining the maximum price of pharmaceutical drugs. The framework of assessing drug prices to ensure they are not excessive falls under the purview of the Patented Medicines Regulations. Since the founding of the PMPRB, these regulations have not been changed in any substantial way. As a response to the rising drug prices in Canada, researchers have called on the PMPRB to amend these regulations as one method to capping the prices of drugs [1, 2]. Engagement with the pricing of drugs for rare diseases (rather than leaving them to market forces alone) stands to be a form of social pharmaceutical innovation at the policy and accessibility end of the life-cycle of medicinal products.


Rocky Road to Implementation

In 2017, the PMPRB set out to modernize the regulations. A draft proposal was created and stakeholders were engaged [3]. In 2019, the new guidelines were published with amendments to the 2017 draft version. The PMPRB had indicated that these regulations would go into effect on July 1st 2020. The amendment to the regulations were then delayed until January 1st 2021.


The implementation of these amendments was delayed to January 1st 2022. However, the statement from the health minister caused the fourth delay with the coming into force of the regulations, set to be implemented on July 1st 2022 [4]. The justification for these delays includes the impact of the COVID-19 pandemic as well as further stakeholder consultation. In the case of these regulations, the PMPRB previously indicated that consultations with industry were being conducted as early as 2016 [3]. With R&D investments in Canada at their lowest since the PMPRB was formed in 1987, some are questioning the industry pushback on these regulations.


Conflict of Interest vs Health Equity?

While stakeholder consultation and input from the industry is not rare in Canada when regulations are being amended, a number of concerns arise from this case. Perhaps the most pressing concern is the rising prices of drugs in Canada. Increases in spending on drugs has outpaced both physician and hospital costs since 2015[5]. The lack of universal pharmacare also creates additional health equity concerns. Individuals with higher incomes are more likely to have private insurance through their employer, whereas those in lower income brackets either do not have coverage or insufficient coverage. Studies conducted on cost related nonadherence to drugs demonstrate this equity concern well [6, 7].


Moreover, there should be a consideration of corporate power and the conflict of interest that is inherent any time that stakeholder consultation involves the public policymaking process. In the case of pharmaceutical drugs, the industry has another unique advantage in how market exclusivity is managed through patents. Drugs are in a limited class of patented products where the patent is on the drug itself [8]. This provides a great level of protection for a drug under a patent. Unlike most other products, innovation can occur without breaking specific product patents. Market exclusivity, combined with the ability to provide input during stakeholder negotiations, better positions the pharmaceutical industry relative to other regulated industries.


Potential Policy Window?

The COVID-19 pandemic has caused global disruption for nearly the past two years, it has also demonstrated to be a catalyst for reprioritization. Given the lack of public domestic pharmaceutical production, the federal government had built the Biologics Manufacturing Centre to support domestic research and production capacity. Another example, the Canada Emergency Response Benefit, was implemented to alleviate some of the job loss related impacts of the pandemic. While health equity scholars posited a universal basic income as a means to address income inequality, the swift implementation of this program demonstrated an ability to act when needed. However, we must move beyond reactionary policymaking – particularly when it comes to health if we are serious about prospective gains available from differential processes within the pharmaceutical innovation space.



References


1. Lexchin, J. Pharmacare and the chaotic world of Canadian drug prices. 2018; Available from: https://theconversation.com/pharmacare-and-the-chaotic-world-of-canadian-drug-prices-93343.

2. Zhang, R., D. Martin, and C.D. Naylor, Regulator or regulatory shield? The case for reforming Canada’s Patented Medicine Prices Review Board. Canadian Medical Association Journal, 2017. 189(14): p. E515-E516.

3. Public Services and Procurement Canada, Canada Gazette, Part I, Volume 151, Number 48: Regulations Amending the Patented Medicines Regulations, Department of Health, Editor. 2017, Canada Gazette: Ottawa.

4. Health Canada. Statement from the Minister of Health on the deferral of Coming-into-Force of the Regulations Amending the Patented Medicines Regulations. 2021; Available from: https://www.canada.ca/en/health-canada/news/2021/12/statement-from-the-minister-of-health-on-the-deferral-of-coming-into-force-of-the-regulations-amending-the-patented-medicines-regulations.html.

5. Canadian Institute for Health Information, National Health Expenditure Trends, 1975 to 2017. 2017, CIHI: Ottawa, ON.

6. Law, M.R., et al., The effect of cost on adherence to prescription medications in Canada. CMAJ : Canadian Medical Association journal = journal de l'Association medicale canadienne, 2012. 184(3): p. 297-302.

7. Law, M.R., et al., The consequences of patient charges for prescription drugs in Canada: a cross-sectional survey. CMAJ open, 2018. 6(1): p. E63-E70.

8. Lehman, B., The pharmaceutical industry and the patent system. 2003, International Intellectual Property Institute. p. 1-14.


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