Health Canada's decision highlights 'dysfunctional' drug-price controls: expert

Price of newly approved drug has increased calls national pharmacare plan

Health Canada's decision highlights 'dysfunctional' drug-price controls: expert

Health Canada’s decision to approve a new drug for cystinosis is serious impacting families who, until recently, have relied on a much cheaper alternative. With their medical expenses rising from $10,000 to more than $300,000 annually, one advocate is arguing that Canada’s drug-price control system must be fixed.

“The new form of the drug, Procysbi, contains the same active ingredient as the old form of the drug, Cystagon,” said Joel Lexchin, Professor Emeritus of Health Policy and Management at York University, in a piece for The Conversation. “It differs only in that it contains a new coating, enabling a slower release of chemicals into the body.”

While reforms to the Patented Medicine Prices Review Board (PMPRB) could help curb such increases, Lexchin said, a coalition of patient groups has urged Canada’s regulators to stop the reform process. The coalition, along with Innovative Medicines Canada, has said that the proposed changes would limit patients’ access to new life-saving medicines and vaccines.

But “contrary to what IMC claims and what the patient groups seem to believe, only one in 10 new drugs are actually major therapeutic improvements,” Lexchin said. He noted that in the case of Procysbi, a 3,000% markup in price over its predecessor drug Cystagon was approved because it’s treated as a “breakthrough drug” simply because of the new special coating.

The basic research and development behind Procysbi was reportedly financed by patient groups, not drug companies. Horizon Pharma, the manufacturer of the drug, has not offered a public explanation for the steep increase, but is currently negotiating a lower price with the pan-Canadian Pharmaceutical Alliance (pCPA).

“But even if [the pCPA] can secure a discount, that will only apply to what provincial drug plans pay,” Lexchin said. “Private drug plans and people paying out of pocket, assuming anyone could actually afford Procysbi, will not get the discount.”

He argued that a national pharmacare plan covering all citizens would allow for lower drug prices to be negotiated. Companies that don’t like the prices offered could still try selling them at a higher price, but would have to contend with a smaller market.

“However, Finance Minister Bill Morneau doesn’t seem interested in a universal pharmacare plan, preferring to try to fill gaps and add to the patchwork in the existing system,” Lexchin said, “although now he seems to be backing off from his initial comments.”