While the case around the public funding of Kalydeco might be considered unique because of its astronomical cost, the fact that  Canadians end up paying more for prescription drugs than other countries is apparently not unusual at all, as was  pointed out  in the April 2013 issue of Health Affairs by researcher Steve Morgan, a health policy expert at the University of British Columbia.  He claims that Canada is missing out on brokering deals with pharmaceutical companies the same way fellow nations are. Morgan interviewed policymakers from nine countries similar to Canada, including Australia, Austria, Germany, Italy, the US and the UK.

The PCPA was announced in September 2010 by the provinces and territories as a means to purchase the most expensive brand-name drugs, but as reported in the Canadian Pharmacists Journal of September 2012, only 2 products have been purchased that way. And so it appears that the provinces and territories continue to “strike up their own individual deals with drug companies, missing opportunities to garner better prices if Canada negotiated rebates while buying as a whole country.” This according to Morgan, as quoted by Carmen Chai  with  Global News back in April of 2013:  “The pricing of medicines is now a game of negotiation, similar to buying a car at a dealership. There is a list price equivalent to a manufacturer’s suggested retail price and then there are  secret deals that everyone negotiates from there,” Morgan said. He told Global News that Canadians pay the second highest costs for brand name drugs in the world, second only to the United States. He said the large countries with multilevel health care systems lose out on drug pricing. New Zealand, for example, is a much smaller nation but it leverages its universal drug plan to lower its prices.

Canada pays about 20 per cent more for brand name drugs. Meanwhile, countries that negotiate the supply of generic drugs pay 90 per cent less than we do, Morgan said.
Tylenol or Advil, for example, would be about a fifth more expensive in Canada, while their generic counterparts, acetaminophen and ibuprofen, would be marked up by 90 per cent compared to other countries’ prices.

This shortfall in our bargaining power ends up on consumers’ shoulders, said Morgan.
“Current differences in price mean that Canadians are spending literally billions of dollars more than they should on prescription drugs. If we do not learn to negotiate rebates as well as comparators around the world, we will continue to pay billions of dollars more per year than we ought to,” Morgan told Global News. Pockets of our population, such as seniors, the poor or the very ill, end up paying the most out of pocket expenses for their drugs.

Across the board, Canadians and Americans paid for the most for their drugs. Deals struck between countries and drug companies are confidential though, so they don’t set precedents for other countries to follow.

Link to complete Global News article:  http://globalnews.ca/news/473107/canada-losing-out-negotiating-lower-drug-prices-study-says/

First of all, Vertex seems to hold all the cards: they alone have the medication that – for some – can make the difference between life and death, or at least restore their quality of life to a point that they are able to live normal lives again. Mind you, a recent announcement by Galapagos NV in Belgium stated that they are about to conduct trials on a CF potentiator that is claimed to be more effective than Kalydeco. This might eventually bring some badly needed competition into the marketplace and result in more reasonable pricing for this type of medication, and CF patients in need of it might feel less like victims in a hostage taking. I know that is putting it very bluntly, but that is how many are feeling in the current situation.

As well, Vertex is not hurting for money at the moment – nor for the foreseeable future – as they have pricing agreements in place in a number countries that will guarantee them millions of dollars in revenue for some time to come, or at least for as long as it takes for the competition to enter the marketplace, but that will likely still be a number of years away. In addition, the key players at Vertex have already cashed in substantially on behalf of Kalydeco’s success, when on April 19 Vertex’ market value rose by 6 billion after positive trial data.  At least one of its executives sold shares worth more than $60 million, nearly doubling the purchase price of his share options.

Secondly – and as we have pointed this out in an earlier blog – there is the lack of political will to make this happen for Canada as a nation. A nation, I thought, that wants to be known foremost as a leader in how it looks after its citizens. With due respect to the Albertan negotiators trying to work out a deal with Vertex, they are doing so with one arm tied behind their backs.  This is so because the Harper government has all but abandoned Health Care in this country – this is not a priority for them, as clearly evidenced by a number of things, such as the refusal to renew the Health Canada Accord due for renewal in 2014, as well as the dismissal of the Canada Health Council by cutting off its funding.

It is important to note the Canada Health Accord and the Health Council of Canada were Pan-Canadian health strategies, designed to provide Canadians with equal access to the highest standards of healthcare, regardless of where they lived. As well, the Council was supposed to monitor and nurture the development and implementation of the 2004 National Pharmaceuticals Strategy that would, amongst other things:

• Develop, assess and cost options for catastrophic pharmaceutical coverage;
• Establish a common National Drug Formula for participating jurisdictions based on safety and cost effectiveness;
• Accelerate access to breakthrough drugs for unmet health needs through improvements to the drug approval process;

With the disbandment of the National Health Council,  this Strategy is now truly dead. Instead, we have what appears to be an ad-hoc agreement by the provinces, the Pan-Canadian Purchasing Alliance, and that is the body now sitting down with Vertex to decide on a price for Kalydeco.  Essentially, the provinces have been left on their own because – Mr. Harper seems to say – “Health Care is a provincial responsibility, so there – go for it, and see if you can sort these things out between yourselves. And don’t come to me for more money, as there isn’t any.”

Well, it isn’t so much that there isn’t any more money in the Tory-managed coffers, as the money they are spending elsewhere – such as in commercial development abroad – appears to flow freely: $25-million for an institute on mining and development based at the University of British Columbia; $16-million to improve environmental practices of Peru’s mining sector, and $17.4-million to “promote economic competitiveness” in mining regions to help build the businesses of small rural farmers in three areas of Peru where Canadian companies operate mines.

Not to say that these projects aren’t of any value to Canada, but you can draw your own conclusions as to the priority our federal government places on the overall Health and Well-being of Canadians.

It remains to be seen if other provinces will follow suit, or whether they will wait to see the outcome of the protracted negotiations between ministry of health officials in Alberta and Vertex; it is assumed that any agreement on a costing formula for this drug will be adopted across Canada (except, perhaps, for Quebec)

This affirmative action by Nova Scotia regarding Kalydeco today and the negotiations in Alberta with respect to its costs suggest that we don’t really have our act together as a country.  While we pride ourselves on the quality and range of social services afforded by Canadians (especially in relation to the U.S.), the federation that constitutes Canada as a nation allows for the fragmentation of these services so, depending on where you live,  you might not be able to enjoy the same degree of coverage.

While it is true that this hodgepodge of federal and provincial jurisdictions  are often able to coagulate remarkably well on behalf of its citizens, there are some areas – such as healthcare – where this fragmentation can be acutely demonstrated and has led to the most deplorable results, with Kalydeco being a case in point.

Lest we forget, already a year has gone by that Kalydeco was approved by Health Canada for use in Canada. Not until the announcement from Nova Scotia today have we had any indication as to when this horribly expensive drug will be covered by provincial drug plans. As a result about 80 Canadians with the G551D CF mutation, who do not have a private drug plan,  are deprived of the tremendous benefits that this drug has to offer.

The negotiations in Alberta for an across-Canada price for Kalydeco are being held under the Pan-Canadian Purchasing Alliance – an arrangement between the provinces (except Quebec) initially agreed on in 2010, and again in 2012 with respect to the bulk-purchasing of pharmaceuticals.  This alliance would have been coming up for negotiation as part of the renewal of the 2004 Canada Health Accord in 2014.

And therein lies the rub, as the Harper government has decided to let the accord expire. The Canada Health Accord is the mechanism intended to enable equal standards of health care across the country. However, by not renewing it, the federal government is signaling is isn’t really interested in that kind of pan-Canadian approach to healthcare.  This in spite of the fact that at one time the conservatives were making noises about joining the provinces in the implementation of a National Pharmaceuticals Strategy.

Not surprisingly, in a further move to dismantle any kind of national governance of public health systems, the Health Council of Canada has been given the boot. Its funding is being cut off and it will be effectively out of business in early 2014. The Health Council was established in 2004 at the recommendation of former Saskatchewan premier Roy Romanow following his report on the sustainability of the Canadian healthcare system. One of its jobs was to advise and monitor the development of a National Pharmaceuticals Strategy. The council has been told that – without the Health Accord – its services are no longer required.

It is in this context of jurisdictional fragmentation and a clear lack of political leadership in health care that the pricing strategy around Kalydeco is being decided.  Apart from what transpired in Nova Scotia today, where is the political will to underpin the costing negotiations to ensure that Canadians who are in urgent need of this life-saving medication will have access to it? Yes, there are lives at stake here!

Finally, we can gain no comfort at all from the knowledge that the only other time the provinces went through the Pan-Canadian Purchasing Alliance to approve an expensive drug (Soliris), it took two years from the day Health Canada approved it for the drug to be funded by the provinces. Let us hope that the great leadership demonstrated by Minister Glavine in Nova Scotia today will now re-energize the negotiation process in Alberta to a swift and successful outcome so all Canadians in urgent need of this medication will be able to benefit from it at the earliest opportunity.