Pharma industry group urges caution on drug-price cuts

by Leo Almazora04 Dec 2017
In many industries, protecting consumers is as straightforward as encouraging competition and keeping prices low. But according to a group representing Canadian drug firms, lowering drug prices could actually end up hurting Canadian patients.

Recently, plans were announced to change the way drug prices are deemed to be excessive. The Patented Medicine Prices Review Board (PMPRB) sets maximum prices in Canada based on those set in several countries, reported the Financial Post. Health Canada is proposing to reduce the maximum prices by removing the highest-priced countries, such as the US, from the decision.

The proposal is supported by representatives from the private insurance sector, including Great West Life. In recent years, it has been taking steps to help employers save money, such as negotiating for lower prices when possible and setting maximums on how much employees can claim for drugs in certain plans.

“This is really, really unaffordable and unsustainable,” Barbara Martinez, practice leader of drug benefit solutions at Great-West Life, told the Post. “We’re very supportive of what [Health Canada] is trying to do to bring back some better pricing to the Canadian marketplace.”

Public policy experts also agree that drug costs are a problem. According to Michael Law, University of British Columbia professor and holder of the Canada research chair in access to medicines, every dollar spent on medicines means less funding for hospitals, physicians, or other therapies.

“On the employer side of things, [excess money spent on drugs is] money coming out of employee wages in the long term,” he said. “The cost of benefit plans is a cost that’s ultimately borne by employees.”

But according to Innovative Medicines Canada (IMC), an association that represents manufacturers of patented drugs, has warned that focusing too much on price could also be harmful. “We need to make sure the countries we’re choosing to compare ourselves with aren’t solely based on price alone,” said IMC president Pamela Fralick.

In a recent statement, the association said excessively quick and deep cuts will mean less money for research and development; citing a 2008 report from the Organisation for Economic Co-operation and Development, IMC said there’s a correlation between a country’s drug prices and research investment. Fralick also warned that drug companies tend to delay launching new therapies in markets with tough price restrictions.

However, a recent report from the PMPRB — which has been contested by the IMC — found that patented drug makers aren’t spending as much as they promised they would on research in Canada. Steve Morgan, a professor in the school of population and public health at the University of British Columbia, also questions the IMC’s claims.

“Any researcher who says the price of drugs in one country, even in the United States, is somehow a driver of global innovation, is fooling themselves,” he said.

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