Health care experts recently gathered in Ottawa for a panel discussion on Canada’s proposal to implement sweeping new regulatory changes governing the price on new patented medicines considered by the Patented Medicines Price Review Board (PMPRB). The panel’s consensus: the proposed PMPRB price controls would limit patients’ access to new, lifesaving medicines and stunt Canada’s growing biopharmaceutical industry.
Looking back at historical trends, it’s no surprise that price controls on patented medicines – which focus only on costs at the expense of innovation and the broader value new medicines deliver – would be harmful to Canada’s health care system. In the last 20 years, innovative therapies and medicines are responsible for drastically improving Canada’s health. According to data from the World Health Organization, Canada’s diabetes and cancer mortality rates have declined by more than 31 percent and 23 percent, respectively, and death rates for non-communicable diseases overall have declined by nearly 20 percent. Any policy that slows medical innovation would likely stall this promising forward progress.
Looking ahead, the expert panel predicted that the proposed price controls would dissuade investment in, and marketing approval for, new medicines in Canada. Over time, this could have a damaging ripple effect across the economy – fewer jobs, lower domestic and overseas investment, and stalled progress towards Canada’s goal to be a leading biopharmaceutical innovator. As Wayne Critchley, the former executive director of the PMPRB put it, “it’s clear there’s been completely inadequate and insufficient analysis of these issues… They have certainly not been considered adequately in the cost-benefit assessments that the government has shared that it has done.” He also pointed out that “patient groups are increasingly concerned” about the potential impact on access to new medicines based on these proposals.
Similarly, panelist Judith Glennie, a pharmaceutical policy consultant, noted that the number of clinical trials in Canada would diminish significantly if the prices of new medicines were lower than necessary to allow researchers to recoup their investments in research and development. She echoed the recurring theme of the discussion – that pricing programs don’t occur in a vacuum; there is an inherent tradeoff between capping drug prices and spurring innovation, investment and job growth.
The experts also agreed that the PMPRB is already accomplishing what it iintended , which is to ensure access to new medicines while reducing prices. For example, since the PMPRB was established in 1987, drug prices in Canada have dropped from 23 percent higher than the foreign price median to 25 percent lower in 2016. Meanwhile, Canada’s access to new drugs is still above the median for countries in the Organisation for Economic Co-operation and Development.
As panelist Harvey Schipper, Professor of Medicine at the University of Toronto, succinctly stated: “Solutions for today clearly will not be the solutions for the future.” He and others underscored the Canadian government needs to pause its proposals and fully consider the costs of changing the PMPRB’s pricing of new medicines.
For more information, read MLI’s report further examining the proposed changes to the PMPRB.