Universal Pharmacare:Solving Canada’s Drug Problem

Pharmacare ForumWindsor Public Library, April 26, 2011

Canadian Health Coalition

Canada’s Drug Problem

1. No ability to control costs, rising 10.5% a year

2. Drug are overpriced – Canada 3rd highest in world

3. 8 million Canadians uninsured or underinsured

4. Prescription drug over-use and misuse especially with children and the elderly

5. New drugs rushed to market based on secret, dubious data. Rx drugs are 4th leading cause of death

Pharma’s 7 Deadly Sins

1. Conducts unethical clinical trials 2. Ghost-writes studies, hides negative results

and promotes illegal off-label use to doctors3. Bribes doctors, pharmacists and medical

researchers4. Advertises hazardous drugs with misleading

information5. Invents illnesses in order to sell more drugs 6. Buys silence from regulators and politicians 7. Prevents the poor from getting medicines

Illegal off-label promotion to MD’s

Big Pharma Profitscompared to Fortune 500 firms

(1954-2008; in millions of constant 1984 US$)Source: Fortune

Dominant Business Model:massive promotion of ‘me-too’ drugs & control over Medical Knowledge

• Sales: $239.8 billion • R&D: $24.1 billion (10% of revenues) • Promotion: $57.5 billion (24.4% of revenues) • Promotion directed towards physicians: $42.8 billion • Average promotion spending per physician: $61,000 • 1 drug rep for every 6 physicians • Undisclosed promotion: Fellowships, ghostwriting, « off-label »,

seeding trials, astro-turf groups…

Merck made $12.9 billion in 2009

and then closed its research lab in Montreal (180 jobs lost)

Retail price for an identical volume of pharmaceutical products

OECD countries, 2005 (US$, market exchange rate)

Source: OECD 2008 - Eurostat OECD PPP Programme, 2007.

Most New Drugs Have No Significant Advantage

Category Percent

Nothing new 51%

Possibly helpful 21%

Harmful 14%

Offers an advantage 7%

Judgement reserved 5%

A real advance 2%

Major breakthrough 0.2%

Total 100.0

Source: France 2001-2010, Préscrire International, 2011

Direct-to-consumer-advertising

• Drives up prescription drugs costs• Fails to inform• Compromises public safety: exposure to

dangerous drugs before risks are fully recognized, Additionally, most new drugs are costlier than existing treatments, but few provide any therapeutic advantage.

• Promotes the medicalisation of normal life

The Economic Case for Universal Pharmacare

Pharmacare Savings - A• Current expenditure on prescription drugs $ 25.141B • Growth in expenditures from increased use +10% • Reduction from decrease in dispensing fees - 2% • Reduction from drug assessment - 8% • Elimination of the monthly deductible in Qc $144M • Elimination of rebate system for generics $1.3B • Elimination of the 15-year rule in Quebec $102M • Change PMPRB price fixing $1.43B • Elimination of extra costs for private plans $560M • Elimination of tax subsidies $933M

Total net savings annually $ 4.479B

Pharmacare Savings - B

• Savings from competitive purchasing $10.2 B • Growth in expenditures from increase in use +10%

Reduction from decrease in dispensing fees -2% • Elimination of the deductible in Qc $ 144M • Elimination of the 15-year rule in Quebec $102M • Elimination of extra costs of private plans $ 560M • Elimination of tax subsidies $ 933M

Total savings annually $ 10.744 Billion

Industrial Policies = Total Failure

Innovation policies are justified by the multiplying effect on the benefits it creates as compared to costs. With a negative multiplying effect, innovation policies in the pharmaceutical sector are a total failure:

• Canada spends $7.4 billion in subsidies

• Value-added in return is only $4.8 billion

Rx spending up 73.7%CANADA,1999-2009, per capita, inflation adjusted

Public spending is stable

• Replace our patchwork U.S.-style drug insurance plans withuniversal, first-dollar coverage (no deductible or co-pay)

• Pay only for drugs that have been independently established to be safe and cost-effective

• Establish a National formulary

• End the price-fixing and public subsidies of Big Pharm

• Start bulk purchasing

www.PharmacareNow.ca

Universal Pharmacare will save $ billions

Pay for What Works

Next steps for Canadians

“Democracy is the thing that lets ordinary people do extraordinary things. There isn’t anything we can’t accomplish if we set our minds to it.”

- Tommy Douglas