Big Pharma's Billion Dollar Bribe -- but don't worry, it's Canada

By which I mean, of course, that it's only $764 million in U.S. dollars (according to the November 16 exchange rate). But if you are keeping an eye on Big Pharma, as I am, and if you worry about exhorbitant drug prices, as I do, and if you think of our neighbors to the north as friends and allies, as I most certainly do, then the drama playing out in Canada right now over this issue is well worth your attention.

Let's start with the basics. Every American who thinks about healthcare knows that Canada has a single-payer system. But it doesn't apply to prescription drugs when administered ouside of hospitals. When it comes to those, Canada's system is roughly as screwed up as ours is. Or worse.

In Canada, to the extent drug prices are regulated it happens at the provincial level. That leads to quite a patchwork, given that there are ten provinces and two northern territories. The bottom line: Although patients in the United States pay the highest costs in the world for prescription drugs, and Switzerland is second, Canada is so far the bronze medal-winner.

Still, Canada has an enlightened national government led by Prime Minister Justin Trudeau,

and so a struggle is playing out in Ottawa, in and around a body known as the Patented Medicines Prices Review Board (PMPRB). Last August, just before Canada's national election, Parliament adopted a law that would strengthen the PMPRB's authority to cap drug prices by pegging them to those prevailing in a bunch of so-called "comparator countries."

Last year's legislation did two really important things. It increased the number of comparator countries from seven to eleven -- and, happily for fans of reasonable drug prices, the bill booted both the U.S. and Switzerland off the list. Also, there's a new requirement that the drug companies tell the PMPRB their actual prices in the comparator countries, rather than just supplying the list prices. Using the list prices in this context would be the equivalent of taking the sticker price for a year of tuition at Harvard and assuming that's what a year of college costs everywhere in the U.S.

Oh, and did I mention that the PMPRB is gearing up to use Quality-Adjusted Life-Years (QALYs) as a metric relevant to setting prices for prescription drugs? Here in the U.S., the pharmaceutical industry hates this admittedly controversial metric for evaluating the benefits of prescription drugs. And, just like in the U.S., Big Pharma has not hesitated to use patient advocacy groups (with their compelling patient stories) as shills in their anti-QUALY campaign.

Here's where the billion-dollar bribe comes in. With the new pricing regulations set to take effect on January 1, Big Pharma has offered to spend that amount, over the next decade, to boost local manufacturing, and to improve access to drugs that treat rare diseases. (One of those rare diseases, of course, is cystic fibrosis -- the life-shortening genetic condition of particular interest to me.)

According to a story published on November 15 by The Canadian Press (the Toronto-based national news agency), the pharmaceutical industry is offering that sum in exchange for backing off from what Big Pharma regards as the most onerous aspects of the drug price crackdown. According to The Canadian Press, the industry believes the scaled-back reforms would still cost Big Pharma nearly $20 billion (Canadian) over the next ten years.

Cystic Fibrosis Canada -- the Canadian counterpart to the Cystic Fibrosis Foundation -- submitted comments to the PMPRB making clear that its problem is not with the new list of comparator countries. Rather, the organization said: "implementing additional measures to further reduce prices will only serve to make Canada an outlier with respect to [countries in the Organization for Economic Cooperation and Development] and an unfavourable target for the pharmaceutical industry, which in turn puts Canadians at risk for further delays in accessing innovative and precision medicines."

Added CF Canada: "The limited and delayed access to precision medicines like Kalydeco, Orkambi and Symdeko, and Trikafta are examples of system failure. Canada’s system of regulating, reviewing and reimbursing drugs that treat small populations is unfavourable to innovative precision therapeutics."

The comments of the Canadian patient advocacy group CF Get Loud are especially worthy of attention. According to CF Get Loud (CFGL), they're "a grassroots patient advocacy group founded in 2019 by three Canadians with Cystic Fibrosis tethered to IV poles during the fight for their lives. . . . Every member of the CFGL team is a volunteer that has made it their life's mission to secure life-saving gene modulators for all 4300+ Canadians with CF."

"There is no justification or reason why Canada must contribute human capital (lives lost), in order to send a message to the pharmaceutical industry. As Canadians, we are pround of our health system and will not, and cannot, copromise on being a leader among nations in bringing innovative therapies to our patient communities."

Fair enough. But I have a few concerns about CF Get Loud. First, their web site identifies no actual human beings and thus we don't know, so far, who those IV-pole wielding CFers are. They got mighty angry with me when I inquired, via Twitter, about who they are and whether they are taking money from Big Pharma. They reiterated that they're volunteers -- which seems credible -- but their web site and other materials look very sophisticated. They have a polished PR feel that is redolent of Big Pharma.

Second, their arguments mirror those advanced by patient advocate groups in the U.S. to blunt efforts by the Institute for Clinical and Economic Review to reign in the price of the Vertex modulator drugs (i.e., the aforementioned Kalydeco, Orkambi and Symdeko, and Trikafta) by demonstrating that the prices charged by Vertex in the U.S. are too expensive when considering the actual benefits of the medications. Just like earnest U.S. groups like the Boomer Esaison Foundation and Cystic Fibrosis Research, Inc. argued to ICER, CF Get Loud claims Canada's PMPRB has been insufficiently attentive to patient voices. "The process is one dimensional and completely arbitrary, very much like the guidelines themselves," CF Get Loud told the PMPRB.

"Our goal is to highlight the human capital your decisions will cost," said CF Get Loud. "So many Canadian lives are at stake. We respectfully ask that you study these guidelines as if it was your family being directly affected by these changes."

As a CF dad, I can't argue with such impassioned pleas for compassion and empathy. Indeed, that's the least we ought to expect from healthcare policymakers on either side of the 48th parallel. But I worry that in a key sense, such arguments are a diversion. Yes, it's important for regulators to gain a visceral understanding of what would happen if, say, a patient who could benefit from Trikafta is denied access. At least one Canadian CF patient has died while awaiting her country's approval of this breakthrough medication which rolled out in the U.S. a year ago. But, ultimately, the 'right' drug price can only be determined from a societal perspective, if only because any individual family would be willing to pay a nearly infinite price for a life-saving drug like Trikafta -- and because every user or potential user of the Vertex modulators expects the drug will be covered via health plans whose costs are borne communally.

The drama playing out over drug pricing in Canada is well-worth monitoring here in the U.S. as we await the arrival of the Biden Administration. Both Donald Trump and Joe Biden professed concern about drug prices during the campaign, but President Biden is likely to support an approach similar to Canada's. That means setting prices in the U.S. with reference to prices charged by so-called comparator countries.

Meanwhile, my message to CF activists in Canada is the same plea I make to my U.S. counterparts: Do not allow yourselves to be co-opted by Big Pharma, don't let patients get caught in the cross-fire between payors and pharmaceutical companies, and know that patient access to life-saving therapies is enhanced rather than undermined by efforts to keep drug prices at reasonable levels.