Agency struggled to get pharma companies to engage in drug-price reform: memo
OTTAWA — Health Minister Jean-Yves Duclos was warned that pharmaceutical companies had steadfastly refused to engage on drug-price reforms before he urged an independent federal agency to pause those reforms in favour of more consultation, a 2021 memo shows.
The NDP, which obtained the memo through access-to-information law and shared it with The Canadian Press, is accusing Duclos of delaying meaningful reform to protect drug makers.
"This Liberal government has chosen to continue to protect the profits of these very profitable pharmaceutical industries," NDP Leader Jagmeet Singh said on Thursday.
"And we've got real, concrete proof to back this up."
The memo was a status report from the acting chair of the Patented Medicine Prices Review Board to the health minister about obstacles they were facing to lowering the price of drugs.
The review board is an arm's-length federal agency tasked with regulating the cost of patented drugs in Canada to ensure they aren't excessive, which includes looking at the price of similar medications in other countries.
In 2017, the government announced new rules to bring prices down by expanding the number of countries Canada compares with. Those changes were supposed to be introduced in 2020, but were delayed multiple times because of the COVID-19 pandemic before eventually coming into effect last July.
The agency was in the process of consulting on the finer details associated with the new rule in November when Duclos wrote to the acting chair and suggested the process be paused to give drug companies, patient groups, provincial ministers and himself more time to understand the changes.
The 2021 memo suggested the health minister knew that pharmaceutical companies had been obstinate in the face of the changes, at least from the perspective of the agency.
"After five years, myriad policy proposals and many hundreds of hours of consultation, it would appear the pharmaceutical industry is simply not amenable to any measures that would further constrain its ability to sell patented medicines in Canada at free market prices," the acting chair of the agency's board at the time, Melanie Bourassa Forcier, wrote in the memo.
She said after 110 hours of meeting with members of the pharmaceutical industry to talk about the guidelines for the new rules, they "steadfastly refused to engage on the substance."
The minister's letter to the drug pricing regulator led to discord among board members and was quickly followed by the resignation of the acting chair, a board member and the agency's executive director.
The review board ultimately decided to pause the changes.
Singh told reporters during a press conference on Thursday that the memo contained "glaring red flags" and helped to explain why Duclos urged the agency to halt the changes. He also noted an increase in lobbying efforts by the pharmaceutical industry to the federal health minister's office.
The party's health critic, Don Davies, said the suspended reform would save Canadians some $3 billion dollars on prescription medicines.
He said the memo made it "crystal clear" that the pharmaceutical industry would never agree to anything less than free-market prices, and Duclos had that information in hand when he asked the board to suspend the changes.
"The minister of health simply has suspended these reforms due to pharmaceutical industry pressure," Davies said.
Duclos did not immediately respond to a request for comment, but told the House of Commons health committee in April that he asked for the pause to make sure all the relevant groups had more time to understand what the changes would mean.
The letter was part of the minister's legal obligation to provide feedback on the proposed changes, he said.
He also said that he met with members of the pharmaceutical industry on a range of topics, including drug prices, COVID-19, the shortage of children’s medicine and other concerns.
This report by The Canadian Press was first published May 11, 2023.
Laura Osman, The Canadian Press