Vaccines, prices and a pandemic

Faster than anyone could have anticipated, the initial phases of COVID-19 vaccination have begun. Yet, as doses are put into arms, many in Canada have been rightly frustrated with announcements in delivery delays.

There is no shortage of finger pointing by pundits and politicians alike, including attempts to blame shortages on Canadian efforts to address high drug prices and enact a national pharmacare program. In reality, these efforts for fair drug prices have nothing to do with the current vaccine shortage. These reforms have everything to do with improving access to medicines for all.

Canada has some of the highest drug prices and highest rates of drug spending in the world. A major contributor is the way medications under patent are priced, a responsibility of a federal regulatory agency called the Patented Medicine Price Review Board (PMPRB).

In 2017, the PMPRB released a policy document entitled Protecting Canadians from Excessive Drug Prices. Jane Philpott, then Minister of Health, said, “Canadians are paying too much for prescription drugs” and that “measures (proposed for the PMPRB) will go a long way toward helping Canadians afford the medicines they need to live healthy, productive lives.”

She was right. Experts agreed that the pricing changes would do just that. Over a 10-year period, savings to Canadians are projected to be $8.8 billion.

More than three years after that announcement, implementation continues to be delayed, with another six-month delay announced last month. Each step of the way, lobbyists for Big Pharma have fought tooth and nail to stall and weaken reforms.   

Industry lobby groups like Life Sciences Ontario and Innovative Medicines Canada repeat threats that drug companies will stop launching new drugs in Canada and that amended regulations will hamper “the country’s ability to attract investment to our life-sciences sector.”

Industry has been making these claims for almost 50 years. The benefit of time has taught us that threats like this are only rhetoric, not reality.

How do we know?

The United Kingdom, Sweden and France are among the countries that do a better job of reining in drug prices while also achieving higher rates of research and development (R&D) than Canada. This is despite lobbyists continuing to cite the necessity of high prices to support high investment. In fact, even with lower drug prices, these European countries will have a much shorter interruption in Pfizer-BioNTech vaccine deliveries than Canada.

The Canadian contrast is telling. In 2016, sales of brand name drugs hit a record $20 billion while manufacturers of those drugs invested only 4.4 per cent of sales into R&D. Despite the soaring revenues, the PMPRB reported that this low percentage has been falling since the mid-1990s, failing to meet a prior commitment to achieve 10 per cent R&D in exchange for changing Canada’s patent laws in favour of brand-name drug companies.

Research has consistently shown that drug prices are not linked to the levels of industry R&D in a country, despite pharma’s claims. Instead, the links are the locations of head offices of these multinational companies, local infrastructure to conduct clinical trials and the presence of a strong scientific community doing basic research that provides the foundation for new drugs.

In fact, we can look within our own borders to debunk talking points.

In the mid-1990s, British Columbia introduced “reference pricing” to support evidence-based drug coverage and lower drug spending. Like now, and for the past 50 years, industry threatened to halt R&D investment in B.C. However, the B.C. government moved forward with these reforms and a 2008 study found that the changes had no negative effects on pharmaceutical R&D. In fact, from 2001 to 2003, R&D investment in B.C. performed better than expected.

There are no shortages of meaningful solutions to improve access to medications – now and after the pandemic. Importantly, the paths forward do not compromise efforts at aligning drug prices in Canada with the rest of the world.

For example, the Critical Drugs Coalition is calling on Canada to create a publicly owned generic drug manufacturer for critical medications; maintain a properly stocked strategic stockpile of these medications; and allow greater transparency on critical medicine supplies to ensure that supply issues are addressed before there is risk to patients.

A growing list of countries are requesting “compulsory licensing” that temporarily suspends patent rights and increases manufacturing capacity and access to COVID-19 medications, vaccines and diagnostic techniques. While it’s not compulsory licensing, Pharma giant Sonafi recently announced an agreement with Pfizer to boost manufacturing of the latter’s vaccine in an incremental move toward boosting global supply.

And Doctors Without Borders Canada are demanding the federal government attach conditions to R&D that ensure medicines and vaccines developed with public funds be affordable, available and accessible all – not priced out of reach for patients and health systems.

What will not improve access for people in Canada are high prices for medically necessary medicines. If the federal government is serious about ensuring access to prescription drugs and vaccines to all, then it must stand up to industry pressure from Big Pharma on pricing reforms.