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I would really like to know why Canada pays more for its patented drugs than elsewhere. In mobile telephony and the Internet, for example, we know the reason for the high prices, but not for medicines.
Pierre Dauphinais
Canadians pay more for their patented drugs than anyone on the planet except the Americans and the Swiss.
For what ?
The reasons are many. One of them is that unlike many countries (this is particularly the case in Europe and New Zealand), the Canadian government is not the sole payer for drugs consumed in Canada. According to Joel Lexchin, a physician and professor at the University of Toronto, the public plan pays about 44% of the cost of drugs in the country. The rest is borne by private insurers and the patients themselves.
This means that the Canadian government has a weaker balance of power than other countries when it negotiates the price of drugs.
Canada has nevertheless adopted a mechanism to set a ceiling on the price of patented drugs. This cap is determined by the Patented Medicine Prices Review Board (PMPRB), a federal agency.
The ceiling price is established on the basis of comparisons with other countries. The catch is that until recently, only seven countries were used for comparisons, including the two biggest payers: Switzerland and the United States. South of the border, the prices of patented drugs are actually three times higher than in Canada, in part because they are very little regulated.
The Canadian government is aware of the problem and has initiated a reform to lower the price of drugs. This reform provides in particular for broadening the base of comparison countries used to set the ceiling price and for excluding Switzerland and the United States from the list.
Former country basket: France, Germany, Italy, Switzerland, Sweden, United Kingdom, United States.
New basket of countries: Australia, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, United Kingdom.
As we wrote recently, however, this reform has turned into a real soap opera1. Contested by the industry, it has been repeatedly postponed by the Trudeau government.
Although it was eventually adopted last July, the guidelines needed to implement it have caused controversy, led to chain resignations within the PMPRB and further delayed matters.
There is ultimately a whole political game that is played between governments and pharmaceutical companies regarding the price of drugs, their access and investments in research and development.
Canada wants to encourage pharmaceutical companies to invest in it and fears that if it is too aggressive in its price controls, it will discourage companies.
Joel Lexchin, physician and professor at the University of Toronto
“European countries can control prices better than Canada because companies are historically established in Europe, while Canada seeks to attract them,” adds the Dr Lexchin.
It is not for nothing that the PMPRB originally set its price ceiling from countries where prices were high. These countries had not been chosen on the basis of drug prices, but on the research and development investments made by pharmaceutical companies.
Finally, these companies do not hesitate to say that they will not market certain drugs in Canada if the prices there are too low. This argument – one could also speak of blackmail – frightens patients, puts the government in a difficult situation and also contributes to high prices.