Ontario Health Coalition Submission to the Standing Committee on Social Policy on Bill 102, Transparent Drug System for Patients Act, 2006

Posted: May 29, 2006

(May 29, 2006)

Ontario Health Coalition
15 Gervais Drive, Suite 305
Toronto, Ontario M3C 1Y8
tel: 416-441-2502
fax: 416-441-4073
email: ohc@sympatico.ca
www.ontariohealthcoalition.ca

Introduction
The Ontario Health Coalition is a network of over 400 grassroots community organizations
representing virtually all areas of Ontario. Our primary goal is to empower the members of
our constituent organizations to become actively engaged in the making of public policy on
matters related to health care and healthy communities. To this end, we seek to provide to
member organizations and the broader public ongoing information about their health care
system and its programs and services. Through public education and support for public
debate, we contribute to the maintenance and extension of a system of checks and balances
that is essential to good decision-making. We are an extremely collaborative organization,
actively working with others to share resources and information. We are a non-partisan
group committed to maintaining and enhancing our publicly-funded, publicly-administered
health care system. We work to honour and strengthen the principles of the Canada Health
Act.
Our members include over 70 local health coalitions in communities across the province;
local health action committees; health professionals’ organizations; physicians that support
medicare such as the Medical Reform Group; medical students’ groups that support
medicare; non-profit service providers; health sector unions; women’s groups such the Older
Women’s Network, Voices of Positive Women and the Immigrant Women’s Health Centre;
seniors’ groups such as Canadian Pensioners Concerned, the Ontario Coalition of Senior
Citizens Organizations, CAW retirees, Alliance of Seniors to Protect Social Programs; low
income and homeless peoples’ organizations including Low Income Families Together,
Food Share of Metro Toronto, Ontario Coalition Against Poverty; social service
organizations; workers’ advocacy organizations; ethnic and multiracial minorities; the
Ontario Federation of Labour; and other organizations such as the Canadian Council of
South Asian Seniors (Ont.), the Association of Neurologically Disabled, Ontario Coalition for
Social Justice, Social Planning Council of Metro Toronto, Native Women’s Resource Centre,
Aids Action Now, Birth Control and Venereal Disease Centre, the Canadian Federation of
Students (Ontario division), Oxfam Canada and the Injured Workers Resource Centre,
among others.
We are linked to the Canadian Health Coalition and provide provincial coordination of
community-based health coalitions.

Overview
In this bill, the government proposes several key initiatives to control the cost of drugs in
Ontario including supporting the widening of the use of generics to replace the higher cost
brand name drugs, reducing the mark up on drugs and ensuring that the provincial
government pays pharmacies for the actual cost of drugs rather than paying more than the
pharmacies pay for them.
The bill also changes the process for deciding what is on and off the Ontario Drug Benefits
Plan formulary and price levels for drugs. The creation of a new Executive Officer to replace
cabinet as the final decision-maker on these items is one that has raised several questions for
us.
The bill has been accompanied by several announced initiatives that are not actually in the
legislation, including the introduction of patient representatives in the drug review process
and a citizens’ council. With the caveat that it is important for these patient and citizen
representatives to be independent of drug industry influence, we support these initiatives.
In our view, the legislation is an important first step. We have consulted with medical experts
who conclude that the evidence is that the initiatives contained in this bill will not harm the
health of patients and will work to control drug costs.

Achieving a Balance
We recognize that there are serious ethical dilemmas that must be weighed carefully in
dealing with public policy regarding access to medical treatment. Numerous organizations
and individuals advocate passionately for access to particular drugs and treatments that are
not currently listed. There are also numerous organizations and individuals advocating for
particular non-pharmaceutical treatments and care such as extensions to homecare,
improvements in nursing homes and access to a comprehensive range of hospital and
community care. We are also aware that the profit-seeking interests of the private for-profit
drug – both brand name and generic – and pharmacy industries are actively lobbying on this
bill.
We applaud the courage of the government in grappling with the difficult questions that
involve balancing the need for cost control in order to protect the health system as a whole –
including non-pharmaceutical care – and the need to protect access for people to drugs that
are not currently on the formulary. Obviously, in such decision-making it is necessary to
balance the collective good, individual patient’s rights, and the obligations of government
and health providers to protect patients from harm, among others. We believe that questions
about what is covered or not covered and the ethics of protecting a patient or providing
access to a drug that is not listed belong in the public realm and should be decided in as
democratic and transparent a fashion as possible.
Our approach to this bill is to balance the following:
• protect and extend the scope of the public health system under the principles of the
Canada Health Act
• support access to drugs with proven efficacy and safety
• support access to needed treatments for those with rare and life-threatening
conditions, and support democratic accountability and discussion in this process
• ensure the public interest in protecting the scope of the public health system –
including non-pharmaceutical therapies and treatments – from being diminished by
high drug costs
• protect against dangerous or unnecessary drugs
• support steps towards creating a national drug plan for all Canadians accompanied
by an appropriate regulatory regime.
We believe that the government has successfully achieve a difficult balance regarding these
values in the provisions regarding access and cost in Bill 102.

Initiatives supported by the OHC:
1) Widening availability of generic drugs. Previously brand name drugs had to be on
formulary for generic to be bio-equivalent and listed. Under this legislation generics can be
listed without brand name drugs being listed. We believe that this could increase access to
bio-equivalent generics and lower costs without harming patients.
2) Widening what will be considered equivalent – e.g. under this bill, a pill and a tablet
can be considered bio-equivalent. Previously only a pill and a pill could be considered
equivalent. We believe this could increase access to bio-equivalent generics and lower costs
without harming patients.
3) Conditional listings vs. Section 8 – Section 8 was an appeal used by doctors for
coverage if a drug was not listed on formulary. There are no details about this in the
legislation. We support the reduction of paperwork for physicians and the continued access
to drugs for patients who need them. We believe the outcome of this initiative depends on
what conditions will be placed before getting drugs on the listings. These must be
reasonably rigorous to protect patients while allowing people with serious illnesses to gain
access to lifesaving drugs.
4) Elimination of rebates for pharmacies. Previously the government would pay
pharmacies the cost of drugs charged by the manufacturers. But the manufacturers would
give pharmacies “rebates” as a way of getting them to stock their drugs – a kind of open
“kick back”. So the government was paying a higher cost for the drugs than the pharmacy
was ultimately paying. This legislation proposes to eliminate the use of rebates and pay the
actual transaction price that the pharmacy pays for the drug. This will save government (and
the public) money.
5) Dropping price of generics by 20% to 50% of brand name. Currently 1st generic on
market cost 70% of the brand name, the other generics cost 90% of the 70%. These were
meant to be price ceilings but became floors. We believe this will reduce costs without
harming patients.
6) Decreasing the mark-up on drugs from 10% – 8%. We believe this will reduce costs
without harming patients.
7) Creation of best-practices prescription guidelines.
8) Increasing representation of patients on councils regarding the formulary. We support
these initiatives with the proviso that adequate protections against influence of the drug
industry are included. No patients, citizens or patient groups that are affiliated with, funded
by or otherwise supported by the drug industry should be allowed to sit in these positions.

Additional Comments:
• Brand name drug companies argue that generic substitution is bad for health. They fund
and influence some patient groups and coalitions to put out this information. All major
credible studies show this to be untrue.
• One other option is reference based pricing as in BC in which only the cheapest of a
class of drugs is covered by the government plan. Patients wishing a more expensive
product must pay the difference. If there is a genuine medical need for the more expensive
product the government will pay for it in full. Studies in BC have never demonstrated any
adverse health outcomes from this policy.

Recommendations:
• Money being saved through the measures contained in Bill 102 should be invested in
healthcare or social programs.
• The legislation creates an Executive Officer. The EO will have powers cabinet used to
have to determine what is on and off the formulary. The EO will also negotiate deals
regarding price and bulk buying with drug companies – a role formerly not done by anyone
in the Ministry.
To the extent that the creation of this position is motivated by a desire for the
government to more effectively negotiate the price of drugs and use its buying power
to get the best possible value for Ontarians, we are supportive.
On principle we believe that the decision about what is listed and not listed on
Ontario’s formulary must be one that is accompanied by democratic accountability.
In shifting the resposibility to determine what is listed to the Executive Officer, we
would like to see clearly that the responsbility for the contents of the formulary
remains with our elected government. We would support additional initiatives to
ensure that this Executive Officer operates with the maximum possible public
transparency and the minimum possible influence of the drug industry.
• The section of the legislation relating to rapid review of breakthrough drugs may or may
not be a good thing. It could just get more drugs that do not provide additional benefit on
the formulary. This depends how rigorous the controls are. The need for rigorous protection
of patient safety and assurance of efficacy of drugs needs to be balanced with patient need
and demands for access to drugs in urgent cases and in cases of rare conditions.
• Some pharmacies are arguing that the reduced revenue for them resulting from some of
the initiatives in this legislation will lead to closures of pharmacies in rural areas and in the
north. It is impossible for us to verify these claims without having access to their financial
reports. While we obviously support protecting access to pharmacies, if their financial
viability is based on “rebates” from the drug companies to stock their profits then another
system to ensure access to pharmacies would be more ethical and should be considered.
• Any additional initiatives to control the drug industry lobby would be positive, including
increased democracy and transparency, reduced corporate donations to political parties,
and additional steps regarding drug company influence over physician prescription
practices.
• We support the Canadian Health Coalition’s pharmaceutical strategy and encourage the
Ontario government to advocate at the federal level regarding these initiatives. See More for
Less: A National Pharmacare Strategy at: http://www.healthcoalition.ca/

Conclusion:
We believe that the government – through this proposed legislation – attempts to balance the
need for drug cost control with protection of patient access to needed drugs and safety
issues. Based on the available information and the evidence, we conclude that the
legislation will likely work to contain costs and will not harm patients. This legislation will
provide benefit to Ontario’s health system and will protect access for Ontarians using the
Ontario Drug Benefits Program. This is an important first step.
But Ontarians need more. Canada and the United States stand out among industrialized
countries as two of the wealthiest nations without national drug plans. Yet, pharmacare has
long been envisioned as an essential step in the evolution of Medicare, recommended by
Justice Emmett Hall in 1964. While we support this legislation, we also strongly support the
Ontario government advocating at the national level. All Ontarians and all Canadians need
a safe and affordable national pharmacare program that would provide equal access to
prescription drugs, be publicly funded and controlled and cover essential drug costs. While
provincial governments pay the costs of provincial drug plans and have some regulatory
powers, many regulatory powers rest with the federal government. We hope that Ontario’s
government will play a leadership role in advocating for a national formulary, an
independent agency with more rigorous practices for drug approval, patent reform,
post-marketing safety monitoring, enhanced controls on drug company advertising and
other measures that would improve our drug regulation regime as well as a national
pharmacare program.

click here for printable version