5b Pharmaceuticals and the Health Care System

Question 1

How much was spent on drugs (dollars and percentage of total health expenditures) in 2004?

Answer 1

$21.8 billion, 16.7%

Question 2

Are drug expenditures increasing faster, slower, or at the same rate as total health expenditures?

Answer 2

Increasing at a faster rate than total health expenditures.

Question 3

What was The Patent Act of 1923?

Answer 3

The Patent Act was amended to provide for
compulsory licensing for manufacturing purposes for
food and drug patents.
• allowed a compulsory licence to be granted if a medicine’s
active ingredients were manufactured in Canada.

Question 4

What is a compulsory licence?

Answer 4

A compulsory licence is a statutory licence that gives the
licensee the right to manufacture, use, or sell a patented
invention before the patent expires. Licences could be
granted without the consent of the patent holder and
the licensee was required to pay a royalty.

Question 5

What was changed in the Patent Act in 1969?

Answer 5

The Patent Act was amended to permit
compulsory licences to import medicines into
Canada.

Question 6

What did the 1969 changes to the Patent Act result in?

Answer 6

allowed generic drug producers to import a
medicine’s active ingredients and process them into
final form for sale.
Generic drug manufacturers gained significant market
share
low levels of research and development (R&D)
investment (about 4.9 percent of sales in 1969)

Question 7

What did the federal Minister of Consumer and Corporate Affairs call for in 1983?

Answer 7

The federal Minister of Consumer and
Corporate Affairs called for a rebalancing of the 1969
policy on compulsory licensing in order to generate
growth in the pharmaceutical industry.

Question 8

What was the 1987 Bill C-22? (Amended the Patent Act)

Answer 8

10 years of protection against compulsory licences
to import and 7 years’ protection against
manufacture.

Question 9

What is general patent law?

Answer 9

general patent law; term of a patent would be 20
years from the date on which a patent application
was filed, rather than 17 years from the date the
patent was issued.

Question 10

What is the Patented Medicine Prices review Board (PMPRB)?

Answer 10

independent, quasi-judicial body.

It is responsible for ensuring that prices charged by manufacturers of patented drugs are not excessive.

Question 11

Who does the PMPRB (Patented Medicine Prices Review Board) report to?

Answer 11

The PMPRB reports to Parliament through the Minister of Health

Question 12

Does PMPRB set prices?

Answer 12

No

Question 13

What are the guidelines for reviewing prices by the PMPRB (Patented Medicine Prices Review Board)?

Answer 13

reviews prices of individual products to determine if they
are excessive:
(1) Existing cannot increase by more than the Consumer
Price Index (CPI).
(2) New drug is limited so that the cost of therapy with the new drug is in the range of the costs of therapy with existing drugs in the same therapeutic class.
(3) The price of a breakthrough drug is limited to the
median of its prices in France, Germany, Italy, Sweden,
Switzerland, Britain, and the United States. In addition,
no patented drug can be priced above the highest price
in this group of countries.

Question 14

What is the 1991 Bill C-91? (and what were the effects following negotiations under the General Agreement on Tariffs and Trade (GATT) and the North America Free Trade Agreement (NAFTA)?

Answer 14

Increased patent production up to 20 years

Eliminated compulsory licensing.

Question 15

What occurred in August 2003 (what did the WTO do)?

Answer 15

WTO allowed generic copies of patented pharmaceutical products under compulsory licenses for export to developing and least-developed countries that did not have the capacity to manufacture such products domestically.

Question 16

What are some approaches the provinces are using to cut costs?

Answer 16

Formularies, generic substitution, reference-based pricing, price freezes, controls on markups and dispensing

Question 17

What is a formulary?

Answer 17

Manufacturer makes a submission to a provincial government to have the drug covered by a particular drug program, which “covers” a specified list of prescription drugs (the formulary)

Question 18

What is the CDR (Common Drug Review)?

Answer 18

The Common Drug Review (CDR), at the Canadian
Agency for Drugs and Technologies in Health
(CADTH), is a pan-Canadian process for conducting
objective, rigorous reviews of the clinical, cost-
effectiveness, and patient evidence for drugs. CDR
also provides formulary listing recommendations to
Canada’s publicly funded drug plans (except
Quebec).

Question 19

What is generic substitution?

Answer 19

Provincial (and other) drug programs use generic
substitution to control expenditures. If a drug is
available from multiple sources, provincial
programs usually pay the price of the lowest-cost
alternative.

Question 20

What is reference-based pricing? (RBP)

Answer 20

Reference-based pricing categories are identified. The “reference product” in each category (drug family) is that with the lowest price. The drug benefits program will only reimburse - for any drug in the category - the price of this reference product.

Question 21

What is the difference between

Answer 21

Generic substitution - the meds are chemically equivalent

Reference-based pricing - the meds need only to be therapeutically equivalent, not chemically identical.

Question 22

What is the Pharmacoeconomics Program?

Answer 22

BC - is multi-disciplinary team consisting of physicians, economists, bio-statisticians, pharmacists and epidemiologists.

Question 23

What does the Pharmacoeconomics Program do?

Answer 23

Undertakes many different projects in a number of areas of study, including pharmaceutical prices and regulation, health and technology assessment, economic burden of illness and health services research.

Question 24

Who established the the Therapeutics Initiative and when?

Answer 24

Established in 1994 by the Department of Pharmacology and Therapeutics in cooperation with the Department of Family Practice at UBC

Question 25

What does the Therapeutics Initiative do?

Answer 25

Provides physicians and pharmacists with up to date, evidence based, practical information on rational drug therapy.

Question 26

What is the Therapeutic Initiative?

Answer 26

An independent organization, which is at arms length from government, pharmaceutical industry and other vested interest groups.

Question 27

What are some of the consequences of adverse drug effects and drug errors?

Answer 27

Being given the wrong prescription/wrong med has caused very serious health problems.
Higher admission rates (especially of seniors)
Causes preventable morbidity and mortality
Increases costs of health care (to treat adverse effects, admissions, etc)

Question 28

What is the Drug Safety and Effectiveness Network? (When was it established and why)

Answer 28

June 2008 parliamentary report, “Post-Market Surveillance of Pharmaceuticals” recommends drug safety and effectiveness network be established “immediately”.
Ongoing funding for DSEN (Drug Safety and Effectiveness) announced in 2009

Question 29

Who has granting authority for DSEN (Drug Safety and Effectiveness Network)?

Answer 29

Canadian Institutes for Health Research

Question 30

What does DSEN (Drug Safety and Effectiveness Network) do?

Answer 30

DSEN, a virtual network, connects researchers throughout Canada to conduct post-market drug research to study the impact of drugs.

Question 31

What are the six points of Vanessa’s Law?

Answer 31

1. Requires strong surveillance, including mandatory adverse drug reaction
   reporting by healthcare institutions;
2. Recall unsafe therapeutic products;
3. Impose tough new penalties for unsafe products, including jail time and
   new fines of up to $5 million per day instead of the current $5,000;
4. Provide the courts with discretion to impose even stronger fines if
   violations were caused intentionally;
5. Compel drug companies to revise labels to clearly reflect health risk information, including potential updates for health warnings for children; and
6. Compel drug companies to do further testing on a product, including when issues are identified with certain at-risk populations such as children.

Question 32

How many Canadians have their meds paid for by private insurance, public insurance, and out-of-pocket? (percentages)

Answer 32

About 40% of Canadians have private drug insurance (about half of those have catastrophic coverage) 40% have public health insurance (with big differences in deductibles and co-payments) and 20% have no coverage and have to pay for drugs out-of-pocket.

Question 33

What drug program change occurred in 2003?

Answer 33

BC implements income-based drug benefit program for seniors and non-seniors.

Question 34

What drug program change occurred in 2007?

Answer 34

Newfoundland and Labrador implements income-based drug benefit program for non-seniors.

Question 35

What drug program change occurred in Nova Scotia 2008?

Answer 35

Nova Scotia implements income-based drug benefit program for non-seniors.

Question 36

What drug program change occurred in Saskatchewan in 2008?

Answer 36

Saskatchewan implements income-based drug benefit program for seniors, with maximum copayment for eligible recipients.