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In mid-December 2020, Reuters reported that the pharmaceutical industry in Canada is trying a last-ditch effort to stop certain parts of a drug pricing crackdown scheduled to go into effect on January 1, 2021.
Innovative Medicines Canada (IMC), the pharmaceutical lobbying group in Canada, met with Minister of Health Patty Hajdu on October 16, 2020, and submitted a written proposal for consideration the following week. The proposal requested that in exchange for not following through on some costly reforms, industry would spend C$1 billion over the next decade to boost local manufacturing and commercialization and on new programs to improve access to drugs for rare diseases.
IMC President Pamela Fralick said that the group had “come forward with some considerable options for government to consider and there just does not seem to be that interest.” IMC therefore felt it necessary to “let Canadians know what the government is, in fact, passing up.”
In a statement, the health minister’s office said the government will always consider proposals “about different ways to achieve the Government’s objectives,” but also noted that “no amendments to the regulations are currently in development.” The Canadian government takes issue with the cost of drugs, believing that cost of patented drugs are too high (only behind United States and Switzerland in terms of cost) and that there are other countries with lower drug prices and similar access to prescription medications. “The position of the Government of Canada remains unchanged — Canada has among the highest patented medicine prices in the world, and these high prices negatively affect the ability of patients to access new medicines,” said the statement.
Part of the problem is that even though Canadian sales are not material to most global pharmaceutical companies, the new regulations may lead to similar reforms in other countries, or otherwise directly impact foreign prices. Similar to the way Canada does, many countries set drug prices based on drug prices in other countries, so price cuts in multiple countries may lead to a significant ripple effect across the globe.
Not the First Attempt
This is not the first attempt by industry to stop some of the reforms from being implemented. In February 2019, Reuters reported that industry had offered to give up C$8.6 billion in revenue over the course of a decade. However, since that time, industry has backed down on one part of the plan to change the comparison countries Canada’s Patented Medicine Prices Review Board (PMPRB) uses as a benchmark to set some maximum prices. Because the government believes the United States and Switzerland are the only two countries where prescriptions are more expensive, the PMPRB will drop the United States and Switzerland from its comparisons, and add nations with lower prices.
According to an industry estimate, even if the IMC proposal is accepted, the pharmaceutical industry is still slated to lose at least C$19.8 billion ($15.1 billion USD) over the next decade.