Doug Clark is calling for reform to Canada’s byzantine drug regulation system. Mr. Clark, former executive director of the Patented Medicine Prices Review Board (PMPRB), in Russell, Ont., on April 22.Justin Tang/The Globe and Mail
Doug Clark knows how long it takes drugs to be approved in Canada, because he’s seen the system from the inside.
For a decade up until 2023, Mr. Clark was executive director of Canada’s drug price regulator, the Patented Medicine Prices Review Board (PMPRB). He often bore the brunt of complaints from drug makers about how the government tries to control pharmaceutical costs.
Canada has some of the highest drug prices in the world and among the longest waits for new drugs to come to market.
Mr. Clark has pointed words for the drug lobby, who say the wait times are owing to Canada trying to contain costs. “The price thing is a red herring,” he said.
But he thinks drug makers have a valid point on something else: too much red tape.
“The Canadian system is fragmented, cumbersome, onerous,” he said. “There’s too many steps. It’s like a relay race, right?”
He’s able to speak freely for the first time after leaving government, and his calls for reform to Canada’s byzantine drug regulation system – which involves federal and provincial authorities – comes at a time of heightened interest in tearing down interprovincial trade barriers amid a trade war that could include pharmaceuticals.
Drug makers must navigate a number of regulators and government bodies to get their pharmaceuticals to Canadians. The bodies assess the efficacy of a medicine and its price.
First a drug must be submitted to Health Canada, where it is examined for safety and efficacy. Then it is evaluated for effectiveness and value for money by Canada’s Drug Agency (CDA). The CDA’s analysis is used by public and private insurers. (Only in special circumstances can a patient access a drug before it’s been approved by Health Canada.)
Next, the drug is subject to negotiation by the pan-Canadian Pharmaceutical Alliance (pCPA), which represents provincial, territorial and federal health insurance plans that collectively account for about 40 per cent of spending on prescription drugs. The pCPA negotiates discounts off list prices for medication.
And then within 30 days of a drug’s first sale, it is also subject to review by the PMPRB – the regulator Mr. Clark led for a decade – which can intervene if it determines that a drug’s price is “excessive.” That determination is made based on a few factors, such as how much the drug is sold for in a group of similar countries.
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This whole process can take years. According to an analysis by Innovative Medicines Canada – the main lobby group for makers of patented drugs – it takes an average of 1,301 days from when a pharmaceutical product is launched globally to when it is approved for reimbursement by public health plans in Canada. That is longer than many other developed countries, such as Germany (379), United Kingdom (679) or France (725). Most of that time in Canada – 732 days – is spent on evaluating whether a drug should be publicly reimbursed.
“The numbers on how long it takes in Canada are real numbers,” Mr. Clark said. “You don’t see the government pushing back on those because there’s nothing to say. The industry is quite right. We really don’t stack up well.”
He has a few suggestions. One is that various approvals should be conducted in parallel, not consecutively. So, when a new drug is brought to Canada, it could be examined by health regulators and price regulators at the same time.
Another is that the pCPA, which negotiates prices on behalf of all provincial and federal public health plans, needs to streamline its deliberations. After leaving the PMPRB in 2023, Mr. Clark was named the pCPA’s first chief executive officer, but announced he would step down after less than a year to retire from public service.
The pCPA operates by consensus, and he said it could move faster if the organization had more resources and was empowered by its member plans to make decisions more autonomously. “I did see from the inside how difficult it is when you are a consensus-driven organization with 14 members,” he said.
Finally, he thinks private insurers should be allowed into the process so they can pay the same rates as public plans on patented drugs, just as private and public plans already get the same rates on generic medicines. This would speed up private reimbursement – which also accounts for around 40 per cent of prescription drug spending in Canada – and lower costs.
On patented drugs, amounts that public plans pay are a closely guarded secret, but is widely understood that they pay less than private insurers.
Of course, there are other ways the system can move slowly – such as in attempts to reform it.
Shortly after Justin Trudeau became prime minister in 2015, his government signalled it wanted to tackle rising drug prices by empowering the PMPRB in various ways to lower the ceiling of what it considered to be an “excessive” drug price.
Then-health minister Jane Philpott announced the reform in 2017 and began consultations with industry, patient and health care groups. In 2019, Ottawa said the new powers would go into effect in 2020.
But then the COVID-19 pandemic hit, the industry took Ottawa to court over the new rules and more rounds of consultations were launched. Eight years and four more federal health ministers later, only one small part of the new rules have ever gone into effect. (The PMPRB now compares Canadian drug prices to a slightly different group of other countries than it did in 2017.)
The moment Mr. Clark knew it was time to leave the PMPRB was after the government announced yet another round of public consultations on the latest iteration of the rules. “I was consulted out by that point. I had no more bandwidth for consultation.”
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