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Documents reveal health minister pushed arms-length regulator to delay reform intended to save Canadians billions on drug costs
In its fight to defeat the last remaining fragment of Canada’s embattled drug-price reforms, the pharmaceutical industry received a surprising helping hand from the minister of health.
A series of letters obtained through an access to information request reveal that federal Health Minister Jean-Yves Duclos personally intervened in November with Canada’s drug price regulator on behalf of “stakeholders”—including the pharmaceutical industry.
He asked the independent and arms-length regulator to “suspend” a policy reform process, which it subsequently did.
The minister’s intervention followed a series of communications between his top aides and pharmaceutical lobbyists in the final weeks before new drug price guidelines were supposed to come into force, after having been delayed for six years.
The documents, combined with records from the federal lobby registry, paint a picture of a last-minute, high-pressure move to scrap policy changes that had the potential to dramatically lower Canadian drug prices, which are among the highest in the world.
The original reforms, first proposed by the Liberal government in 2017, were a bold attempt to counter the power of pharma to charge whatever price it wants for new drugs. And because that novel approach could have set an international precedent, it ignited pharma’s furious response.
Doing the bidding of Big Pharma?
It’s a battle that has played out under the bland cover of a regulator with a name so technical that eyes glaze over at the mere mention of it—the Patented Medicine Prices Review Board (PMPRB). Yet the drama over the role of the regulator reveals much about the pharma lobby’s power and influence in Canadian politics.
On Nov. 28, 2022, Minister Duclos wrote a letter to the acting chair of the PMPRB, personally making a case for a delay of the reform process.
“Many stakeholders have raised concerns and questions about the new guidelines and are seeking more information on the potential impacts and the implementation of certain key technical aspects,” Duclos wrote in French, which The Breach has translated into English.
Then he asked that the consultation process be suspended, even though there were only a few days remaining before consultations closed.
“This would allow time to work collaboratively with all stakeholders keen to fully understand the short to long term implications of the proposed new guidelines.”
A top-ranking health ministry official soon added to the pressure with a last-minute submission to the consultation, echoing the minister’s request on behalf of the entire ministry.
Almost two weeks earlier, on Nov. 18, the lobby group that represents corporate pharmaceutical companies, Innovative Medicines Canada (IMC), had already commenced a push to delay the reforms.
The president of the IMC wrote to the acting chair to express “significant concerns.”
That same day, the president was also in touch with an advisor to the minister, one of several contacts between industry lobbyists and ministerial aides that occurred as Duclos was asking the regulator for a delay.
In an email, a spokesperson for Health Canada told The Breach that the minister wrote to the acting chair “to share his views” as part of the official consultation process.
The Breach asked the regulator how often the health minister writes directly to the chair of the regulator to request actions. “Questions of this kind should be directed to the Minister of Health’s office,” the PMPRB said in an email.
The Minister of Health’s office did not respond to the question.
The industry request for more time is being viewed with skepticism by some observers, who note that there has been almost continuous consultation with industry, patient groups and other players in the health care system since the reform process began in 2016.
“I cannot understand how, in 2022, the industry still says it’s not ready yet, that it needs more consultation,” said Marc Andre Gagnon, a political economist with Carleton University’s School of Public Policy and Administration. “There was an overkill of consultation on this issue.”
Minister’s intervention ‘goes to the heart of board’s autonomy’
Gagnon has followed the rise and fall of the reforms that were originally launched by the Trudeau government under the promising title: Protecting Canadians from Excessive Drug Prices.
The original policy would have saved almost $13 billion in drug costs over 10 years.
Almost immediately, the policy hit a wall of resistance from the industry and industry-funded patient groups. After a series of delays, court challenges, and threats that included withholding new drugs from Canadian patients, the industry appeared to have won the fight.
Last April, the health minister announced that most of the planned reforms were being abandoned. All that was left was a change to the list of countries Canada uses to determine if its drug prices are too high. Several countries were added, and the United States, with the highest prices in the world, was dropped.
The lone surviving policy change was still forecast to reduce drug spending by 19 per cent, saving Canadians about $3 billion a year.
The new comparison country list was brought into legal force on July 1, 2022. The next step was to come up with guidelines to put the change into effect.
Just as it had in previous consultations, the regulator invited the pharmaceutical industry and others to comment on the revised guidelines, holding information webinars and other meetings to explain how the process would work.
So in the final days before the consultations were about to close in early December, the acting chair of the board did not expect to be approached by the minister, judging from her response.
“I must admit that I was surprised by your questions in relation to the proposed draft guidelines,” Mélanie Bourassa Forcier wrote in French, which The Breach has translated. “I had understood that Health Canada officials (referring to you) were comfortable and in agreement with the approach presented in the draft guidelines.”
She reminded the minister that the PMPRB is an independent agency that operates at arm’s length from the federal government.
“As you know, Section 96 of the Patent Act authorizes the board to issue non-binding directives on matters within its jurisdiction. This is a function that goes to the heart of the board’s expertise and autonomy as an independent quasi-judicial body.”
She also advised the minister that her agency had already consulted extensively with the industry and with provincial health officials.
Bourassa Forcier offered to meet with the minister to discuss his concerns. She also wanted to talk to him about a meeting invitation she had extended to the industry lobby group, IMC, which was apparently not satisfied with the access the industry had already been given.
“Although, by law, the [PMPRB] is the master of its consultation process, of course, your questions, like those of the industry, weigh heavily on these choices of action,” she wrote him.
A few days later, Bourassa Forcier resigned from her position.
In an email, the regulator told The Breach that no meeting happened with the industry lobby group. When asked if communication between the chair and IMC is a common occurrence, the regulator said “direct communication between the Chairperson and the IMC has occurred in the past, infrequently.”
Reforms stalled after lobbying
Before her resignation and the subsequent delaying of the reforms, there was a flurry of pharma lobby activity.
On Nov. 18, 2022, IMC president Pamela Fralick sent a letter to Bourassa Forcier asking for a meeting to discuss “significant concerns with the guidelines.” The health minister was copied on the letter. Bourassa Forcier wrote back asking for more information about the IMC concerns. The minister was also copied on this exchange.
On the same day, the federal lobby registry shows that Fralick had a meeting with Health policy advisor Chris Zhou. The matters discussed were listed merely as “science and technology,” “intellectual property” and “international trade.” Zhou also received communications from high-powered lobbying firm Hill & Knowlton, which is registered to lobby on behalf of IMC.
On Nov. 28, Bourassa Forcier received two letters—the one from the minister, and a second letter from IMC, asking once again for a meeting. But this time the lobby group was not asking for just one meeting. Rather, Fralick suggested the regulator should agree to ongoing “quarterly meetings,” where IMC would “discuss policy matters, as happens with other departments and agencies of government.”
“Such meetings have proven to help promote a better understanding of issues and foster the development of mutually acceptable solutions,” Fralick wrote.
Gagnon, the Carleton University political economist, said, “I’m very troubled to see that we have a drug lobby group that has such an easy and direct access to the health minister, for one thing, and directly to the chair of different organizations like this.”
The following week, on Dec. 1, Fralick was in touch again with the health minister’s chief of staff and two senior policy advisors, according to the lobby registry.
A few days later, on Dec. 5, associate assistant health deputy minister Eric Bélair followed up with an official submission to the regulator on behalf of the health ministry, using language similar to the minister’s to ask for a delay.
The same day, Bourassa Forcier resigned as acting chair of the PMPRB, giving no reasons for her sudden departure.
In an email to The Breach, Bourassa Foricer said she couldn’t comment on her resignation. Earlier, she said on Twitter that she was seeking legal advice about whether she could talk about her reasons for leaving.
Sometime after that, a decision was made to delay the new guidelines indefinitely, although it’s not clear who made that decision.
There was no news release and no press conference. Just a simple note on the PMPRB’s guideline information page: “New Guidelines will not be implemented on January 1, 2023. The Interim Guidance issued by the Board on August 18, 2022, will remain in place until further notice.”
In an email to The Breach, the regulator said “the Board has not made a decision with respect to next steps in the process to revise its Guidelines.”
New head of regulator is a pharma IP lawyer
So, in the end, the industry got what it wanted. The new guidelines are hanging in legislative limbo and none of the Trudeau government’s policy reforms to “protect Canadians from excessive drug prices” have come into effect.
In the wake of Bourassa Fournier’s resignation, Minister Duclos announced that he was appointing Thomas Digby, a pharmaceutical intellectual property lawyer, to become the new chair of the PMPRB.
Digby “has over 25 years of experience working with the pharmaceutical sector and is highly knowledgeable regarding patented medicines,” the news release stated.
Gagnon said the exchange of letters reveals a closeness between industry, the government and its drug price regulator that might not be in the best interests of Canadians.
“We need to build up the institutional capacity to protect Canadians in terms of affordability and public health,” he said. “If you constantly rely on the private sector to do that by just providing regulations that serve the private sector, you might end up with very bad surprises.”
