When provincial Health Minister Adrian Dix agreed last month to fund the drug Soliris, his decision brought a disagreeable fact to light.
In Canada, Soliris costs $700,000 per patient per year — the highest price charged in any country. (The drug is used to treat a rare blood disorder.) Dix is suing the manufacturer, Alexion Pharmaceuticals, for overcharging, but Soliris is merely the tip of an iceberg.
Drug prices in Canada are among the highest in the world. Next to the U.S. and Mexico, we pay more than any of the 35 Organization for Economic Co-operation and Development nations.
The reason is simple. The federal board that controls drug prices is shackled by a mandate long out of date.
When the board was created 30 years ago, it was governed by two principles. First, it was charged with offering generous deals to the drug industry in exchange for a promise to increase pharmaceutical research in Canada.
But that promise was not kept. Drug research and development in Canada have fallen from 11.5 per cent of sales in 1998 to 4.5 per cent in 2014.
Second, to establish an objective basis for setting prices, the board was given a list of seven comparable countries. It aimed for the median price in these jurisdictions.
But as time passed, those seven nations rose to the peak of the international price table. As a result, we now pay top dollar.
To remedy this problem, Health Canada, which oversees the board, is proposing an amended list of comparator countries that have much lower prices. It’s estimated this (and other reforms) would save $12.6 billion over 10 years.
However, that is only a partial solution. In 2005, there were 20 drugs on the Canadian market with an annual average cost per patient of $10,000 or more. By 2016, there were 135.
These expensive medications represent nearly one-quarter of all public and private drug-plan costs, but fewer than one per cent of plan members receive them.
Many of the older medications in this elevated price range are so-called orphan drugs, meaning their patents have long since expired. No one has stepped forward to manufacture cheaper generic versions.
There is an opportunity for our health ministers to show some initiative. Ottawa and the provinces could contract with a generic manufacturer to create a stream of affordable, off-patent alternatives. Even the threat of such an option might drive down prices.
For this problem is only going to get worse. There are numerous new medications in the pipeline, as genetic engineering expands its scope.
And variants of these technologies might be tailored to individual patients, now that genome sequencing is a reality. Already, more effective treatments for Huntington’s disease, Alzheimer’s, melanoma and other genetically based disorders are envisaged.
Because of the relatively small size of the population groups affected, companies will want to charge high prices for these specialized drugs to recover their investment. However, they might also see in the life-saving nature of their products an opportunity for profiteering, knowing that desperate patients will pressure politicians to pay whatever price is asked.
We’ve talked about some of the mechanical problems in controlling drug prices, but the elephant in the room is Canada’s federal system.
When it comes to health care, we are a loose coalition of independently minded governments. Getting agreement among them is no easy matter, especially where bold measures are needed.
But necessity is a hard taskmaster, and the necessity we face is to get control of drug prices before they bankrupt us. We need unified action by our country’s health ministers, and we need it now.