Lower-Cost Drugs Could Delay Patient Access, Warns Canadian Viewpoint

Health Canada is looking to lower the maximum prices for drugs through regulation. However, if the agency achieves this goal, it could actually put the health of Canadians at risk, according to a viewpoint published by the Montreal Economic Institute (MEI).

“In wanting to reduce the prices of drugs, Health Canada runs the risk of reducing access to drugs instead,” says Mathieu Bédard, economist at the MEI and author of the piece.

Earlier this year, Health Canada announced a consultation that aims to reduce the price of new drugs as they enter the country. This consultation proposed 5 main amendments to the current policy as follows:

• Introducing new factors (the pharmacoeconomic evaluation for the medicine and others in the same therapeutic class in Canada, the size of the market for the drug in Canada, Gross Domestic Product in Canada) to help determine whether a drug’s price is excessive
• Modernize the schedule of regulations to align with Canada economically
• Reduce the regulatory burden for generic drugs protected by patents
• Modernize the requirements for patentees
• Provide information related to third-party rebates

However, in looking at the aftermath of similar decisions in other countries where drug prices have dipped too low, these measures have resulted in hurting patients rather than helping them by delaying patient access to new therapies, according to Bédard.

“In New Zealand, a country often cited as an example for its drug prices, the public system’s access to treatments for diseases like diabetes, cancer, and high cholesterol can be delayed by more than 10 years compared with Canada,” said Bédard, because pharmaceutical companies first introduce innovative drugs in the markets where the price of drugs takes into consideration the amount of research that went into development, as well as ensuring a return on investment.

“Currently, Canada ranks very high in terms of access to new drugs, but if this balance is upset by a reform that lowers prices, the country could wind up at the bottom of the pack,” says Bédard. “When it comes to delays in launching new drugs, Canada is the second fastest after Japan, with an average time to launch of just 90 days after approval, versus nearly 300 in Portugal and over 400 in New Zealand.”

“The interests of patients are better served when drug prices are at a level that allows for pharmaceutical research to be financed. When prices are set artificially low through the usage of regulation, as Health Canada recently suggested doing, there is a risk that patients will end up paying the price. Before intervening even more in this market, public decision-makers should appreciate the balance that underpins this access,” said Michel Kelly-Gagnon, president and CEO of MEI.