Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 4 - Evidence

The Standing Senate Committee on Social Affairs, Science and Technology met this day at 3:35 p.m. to examine the state of the health care system in Canada.

Senator Michael Kirby (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, we are here this afternoon to continue our work on our second report on the federal role in health care. We are in that phase of our work where we are talking about what are the big cost-drivers affecting the health care system.

Our witnesses this afternoon will talk about the impact of drug prices on health care. I will ask each of them to make a presentation, after which we will have a round table discussion.

I suggest that we begin with Dr. Robert Coambs, whose company is affiliated with the University of Toronto Centre for Health Promotion.

Dr. Robert Coambs, President, Health Promotion Research: Mr. Chairman, why are drug prices increasing? Why does it always feel as if a little farther down the road, there is some terrible impending disaster? In fact drug prices are rising precipitously. If you look at just dollar data, you will see this massive increase. One interesting fact about this graph is that there were vigorous efforts undertaken at about this time period shown to constrain the increase. In fact those efforts were successful. We all know about the political pain associated with it. This is just to point out that it is possible to constrain that growth rate. However, there is an inevitable reality that goes along with that growth rate.

If you look at it on this graph as a percentage of GDP, you will see a different story, although it is similar in a way. However, in the end, we have a continuous upward trend. Of course, we are not the only ones to be in this spot.

You will see a similar pattern in OECD countries in general. We have selected four because they are particularly interesting. If we start in the year 1960 and take it to 1997, we see increases everywhere. Germany is interesting because they are perhaps comparable to us. They start out at a fairly low level. They are now approaching 11 per cent of GDP. The U.K. is lower, but they are still increasing. You will notice that every one of the OECD countries is increasing. There is huge demand for health care systems.

We know a little about the U.S. The point here is that it has the highest expenditure of all developed countries in terms of percentage of GDP. Canada is by no means the leader. You also see us having mostly levelled off in the last seven years, which is probably the result of cost-cutting and efforts to constrain.

The point here is that we are seeing significant problems with upward pressure that no one can resist. Please remember, senators, the figure you see being projected here is not dollars spent, it is percentage of GDP. It just seems like we are on an upward trend.

We are currently feeling tremendous upward pressure. In the most recent past, we have not responded to that pressure by increasing spending. New priorities get set, budgets have changed, and we consider what we can do about it.

Let us think about what we could actually do about it, because there are some things possible. However, I will stick to some common sense stuff.

First, we do have increasing costs, but we do not have inflation, not in the way the press would have us believe. We actually have deflation in the health care system. Forgive me for speaking to such an august body in such a simple way. Senators have a history of having governed many of the boards that set prices and so on.

Inflation occurs when identical goods increase in purchasing price over time. The point here is that if a loaf of bread doubles in price but triples in quality, then that is in fact deflation. Of course, this is a common problem with economists. One thing that gets lost in the health care system debate is that health care resources are actually deflating, in the sense that the cost to get a particular "piece" of care now is less than it used to be. Valium used to be expensive; it is now cheap. The same applies to Prozac. Kidney transplants are now much cheaper than they used to be. Any particular unit cost you can think of in the health care system tends to be declining. It is not the case that we are getting inflation. We actually get a better deal from every unit of health care supply than we have ever had before, and it is likely to decline further. Deflation is helping us a lot. It would be far worse in terms of increased expenses if it were not for deflation.

The cost of health care is declining and drugs and other services are cheaper. When drugs come off formulary they become cheaper, no matter where they started out.

How do we hold it at 10 per cent? Actually, the increase is in the amount of health care that can be provided per person, but demand is increasing faster. Thus we are seeing increases in what we can supply to a patient in terms of costs per unit, but demand is increasing very quickly. The number of possible services is increasing very rapidly.

I direct you in that regard to recent activities. Kidney transplants used to be a big deal; they are now fairly routine. The same applies to dialysis. Arthroscopic surgery and brain tumour diagnostics used to be impossible. Treatment for depression used to be impossible; now it is routine. People want these services. We are seeing tremendous increases in demand. Even better treatments are coming for schizophrenia, arthritis, Alzheimer's, heart disease, and cancer. The list goes on and on. The point is that it is not static. It will not stop this year with these new services that are available, because there will be a flood of new services next year. Even if we tried to stifle these services at the patient level, we could not. Nor could we stifle them at the clinician level, because doctors want to give these things to their patients.

The current situation is that policymakers assume that they have only about a 10 per cent envelope with which to work. However, if you look at public disaffection, I would put it to you that the public is implicitly consenting to 11 per cent of GDP. That seems to be what they are saying. They are demanding more and better health care. They are demanding that more be spent on it. There is no way out of it. If we are going to do that, we will increase spending as a percentage of GDP.

As I just said about my earlier figure, it would not be out of line with OECD countries. In fact it would be quite congruent with Canada's history. The problem is how to do that. More precisely, even if we do that, how will we get any benefits out of it? We learned in the past that throwing money at it does not necessarily produce any benefits.

There are some simple, straightforward ways to do this. One is to reduce demand. I said that demand is growing, and we have to manage that demand. We will never eliminate it, but we can reduce it and manage it. A good example is better early intervention and prevention programs. It used to be these were "do-gooder" programs. Do you remember those? They were the ones about which we thought we could do something useful, but we did not. We spent a lot of money on them. We are now in a situation where these programs are much more scientifically based than they used to be. If you just go with the scientifically based prevention programs, you still have a large number of options available.

The other thing to do is to reduce unit costs, which may be why I am speaking at a pharmaceutical session. Obviously, one way to reduce unit costs is to keep people out of hospital as much as possible, which can be done with medication. It does not have to be brand-name medication, but we have to make better use of what is out there.

When we go about trying to meet health care demand, we can see what the media does. They talk to health care professionals and professional associations and try to find out from them what needs to be done. My point here is that we have to focus on the patient. Remember how we do it in family law? We focus on the needs of the child and ignore everything else. Everything else is secondary to the needs of the child. We are not doing that here with patients. We are not saying, "I do not care, Dr. So-and-so, or Nurse So-and-so, whether you think that should we give you more money." A better question is: Will what you are proposing improve patient health?

There is good news and bad news about life expectancy in Canada. Canada has very long life expectancy, both for males and females. Japan is ahead of us, but we are one of the leading countries in the world, which makes us look very good. We have a very successful health care system. Whatever we are doing, we are doing it very well.

The U.S. is not doing as well, which is perhaps not quite so encouraging. Perhaps we have an idea why. However, it is more inexplicable when you look at Cuba or Costa Rica. Why are we only slightly better than Costa Rica? We certainly spend far more per patient. I put it to you that we are allocating resources disastrously badly. When people say that it is not a good idea to throw money at it, let us hope no one pulls out some Costa Rican data, because it is very hard to defend ourselves against it.

These types of programs do work. What you are looking at now is a California ad. It is on billboards all over California, which now has rates of smoking at about 16 per cent. The only way they were able to achieve that was by doing what I was describing. They take a dedicated tax, which is actually a small amount of money, and spend it specifically on early intervention and prevention. They get tangible results in slowing the rise in smoking.

What you see in this next slide has to do with prescription drug compliance. The point here is that if you look at any particular medication, you will see terrible drop-offs in compliance.

This graph concerns cholesterol-lowering medication. This is Saskatchewan data, an excellent data set. It looks at patterns of cholesterol-lowering drugs over a two-year period. You have to take these drugs for about 18 months to 2 years before you get any clinical benefit. Of 100 patients who start out using these medications, after 800 days you see this rate of use illustrated here. Basically, only 10 per cent of them are still using these medications. You might say, "Okay, but this is just cholesterol-lowering drugs." I put it to you that it is not just cholesterol-lowering drugs. We have written books on this topic. Every chronic care medication has severe compliance problems.

When we go back to unit costs, you see that these people in here are unprotected. They have high cholesterol and they are not protected against it. They wind up in our hospitals, clogging up the arteries of our hallways because they did not get adequate protection. Their unit costs are astronomically high when they do not need to be. All we needed there was a good patient support program to ensure that they were taking their medication properly.

This next figure is one for which we are rather well known. It shows that the Canadian economy is losing $7 billion to $9 billion per year because of non-compliance. That is worth more than medications combined.

The Chairman: Can you explain non-compliance?

Dr. Coambs: It means not taking enough of the medication or discontinuing early. You might dribble along or stop completely. You might take it intermittently or have "drug holidays." You might be prescribed two medications. Do you remember the Aspirin-type drugs which are very good for pain control but which irritate the stomach? You might be prescribed two drugs, one for pain and another for stomach irritation, yet you only take one of them.

Non-compliance can be a problem there.

You are also non-compliant if you are overusing opioids, and you can be overusing your angina drugs. That is what is meant by non-compliance.

We would be glad to send you a copy of the book. The point is it is very expensive for our system if we do not control these types of unit costs.

Let us take the example of 100 people who are diagnosed with hypertension. Of those 100 people, how many of them have it under control? Remember that there are approximately 4.1 million Canadians with hypertension. Take a sample of 100 and see how many are in control. What would your guess be?

Senator LeBreton: Twenty per cent.

Dr. Coambs: The number is 16 per cent. Eighty-four per cent of the people who should be in control are not. They are undiagnosed and not presenting.

Cardiologists will tell you the number is 24 per cent because they only see about half the patients that are detected. What happens to that 86 per cent? They clog up the hospitals, they suffer, and they die. They are expensive to the health care system and they suffer unnecessarily. We need to look at that type of expenditure because the cost benefit is far better than for heart transplants.

That completes my presentation.

The Chairman: Thank you.

Next we have Dr. Jeff Poston, the President of the Canadian Association of Pharmacists.

Dr. Jeff Poston, Executive Director, Canadian Pharmacists Association: I would like to make a correction. I am the executive director of the Canadian Pharmacists Association. Our president is Garry King. He works in a hospital pharmacy.

The Chairman: I do not know if that is a promotion or a demotion.

Dr. Poston: It is a demotion.

I would like to thank you and the committee members for the opportunity to talk to you today about the provision, cost, and utilization of drugs. The Canadian Pharmacists Association is the national professional volunteer association providing leadership to pharmacists in all areas of practice. Our members are active in community and hospital pharmacies and in academia and the pharmaceutical industry.

Pharmacists are the most easily accessible health care providers in Canada. We are on every main street, in every hospital, and many pharmacies are open for extended hours in order to better serve their communities. Pharmacists have at least five years of university education and some of the most stringent requirements amongst the health care professionals for the maintenance of professional competency after licensure. We are well integrated into our communities, and successive consumer surveys indicate that the public is very happy with us.

Pharmacists make substantial contributions to primary health care every day by fixing patients' drug-related problems, improving patient compliance -- the problem identified in the earlier presentation -- managing minor illnesses, and promoting good health. However, it is also a fact that the knowledge and skills of pharmacists are underutilized, and this is part of our discussion today.

There is one caveat I would like to apply to all current debates on health care. Like many health care professions, we are facing a critical shortage. Already, we are seeing pharmacies close in rural areas. Without resolution of this issue, moving forward to improved patient care will be extremely difficult.

I want to focus on three issues. We have spent a great deal of time in the past 10 years examining these issues in detail. These are, the escalating expenditure on drugs, the promotion of optimal drug therapy and drug use, and the problems created by inadequate access to drug benefits.

Much of our brief is based on the discussion document we sent to you earlier entitled, "Building Pharmacare: Expanding the Health Care Contract with Canadians," in which we examined the challenges that must be met to create a national pharmacare plan.

We have been actively involved as an association in seeking a better understanding of the escalation in drug expenditures and have worked to find ways to ensure cost-effectiveness and value for money from drug plans.

I will give you a few pertinent statistics. In the early 1990s, we saw double digit percentage increases in drug expenditures in public drug plans, much greater than the rate of inflation. Provincial governments introduced a variety of cost control measures, with some success. By the mid 1990s, increases were down into the lower single digits. However, now we find at the beginning of the 2000s that we are back into double digits, with 12 per cent growth in drug expenditures estimated for 2000.

One of the consequences of the changes that took place in the 1990s was that the public plans shifted costs to either the pockets of Canadian consumers or to private insurance or private employers.

One way that private insurers sought to control costs was to cap pharmacists' fees. Needless to say, we became even more interested in the issue and formed the National Pharmacy Coalition on Managed Care to work constructively with the private sector to develop strategies to manage costs.

A further consequence of drug cost control was an increasing administrative burden on pharmacists. This added an average of $28,000 per pharmacy to the cost of filling prescriptions in 1997.

At the same time as we saw these changes taking place in public and private sector drug plans, evidence was accumulating on the inappropriate prescribing and use of medicines. Estimates for patient non-compliance with prescribed regimens and early discontinuance of medications for chronic conditions have been as high as 50 per cent. Some studies, like Dr. Coambs', have shown even higher levels.

Fortunately, evidence has also been growing of the contribution that pharmacists can make to improving value for money in drug use. While drug use management strategies such as trial prescription programs can save money, the greatest improvement in value for money comes when pharmacists sit down with patients and critically review their therapy.

In a recent study in Ontario, pharmacists reviewed the medications of elderly patients who were receiving five drugs or more. Eighty-eight per cent of those patients had, on average, 3.23 drug-related problems. The pharmacist informed the physician taking care of the patient about these problems, and in 69 per cent of cases, the physician accepted recommendations from the pharmacist to make changes.

Given the changes to the drug plans that I mentioned earlier, there has been growing concern about patient access in Canada to basic drug therapy.

Two-tier health care is alive and well. First estimates vary, but approximately 3 million Canadians have no drug coverage, and probably another 3 million or more have inadequate drug coverage because of the high deductibles and copayments that were introduced in many public plans in the 1990s.

The recent paper evaluating the effects of cost-sharing in Quebec by Tamblyn and others saw patients going without essential drugs, making more visits to the ER, and suffering more adverse events as a result.

Given this picture, clearly something needs to be done. To provide leadership in the call for a national pharmacare program, we formed the national Canadian Pharmacy Coalition on Pharmacare that produced the document that I mentioned earlier.

We see the need for a national pharmacare program and believe that it needs to be built on four cornerstones. First, we need a set of guiding goals and principles. We believe these should be based on the principles of the Canada Health Act, but that three new principles need to be added. Those three are affordability, effectiveness, and efficiency.

The second cornerstone is the need for the active involvement of key stakeholders. Problems in drug use are not created by one group, and they are not going to be solved by one group. We need to bring in patients, all health care providers, and the private sector.

Pharmacists are currently underutilized, and have the potential to play a far greater role in primary health care, relieving the pressure in other areas. We already see community and hospital pharmacists doing this, and a recent good example is the granting of prescribing authority to trained pharmacists in British Columbia to deliver emergency hormonal contraception, making it more easily available to women when needed.

The third, and perhaps most important, cornerstone for a national pharmacare program is government leadership. Federal and provincial governments must develop the political will to tackle change. Sustainable funding must be put in place, and civil servants must develop efficient and cost-effective administration.

The duplication of effort that goes into producing 10 or more different public drug plans in Canada should end.

The fourth cornerstone is funding and implementation. If cost-sharing is necessary, it should be minimal; it should not place an undue burden on patients. Projecting costs for a national pharmacare program is difficult, but the public and the private sectors need to come together to work on this issue. We have seen a bold policy development in Quebec. We need to examine their experience closely to see what we can learn from it.

We believe that a stepped approach is the way to go, with benefits going first to those most in need. We have six recommendations today, in addition to those in our discussion document, that we would direct to provincial and federal governments.

The first step is to finance research that critically evaluates the quality of drug use. There has been a strong focus on drug costs, but little on the quality of drug use. It is through improving the quality of drug use that true savings will be found, both in costs and human life. Evaluation research should focus on the value of interventions developed to improve the quality of drug use.

Our second recommendation is that, as provinces develop primary health care reform, they should look at ways to integrate pharmacists into the proposed models for primary health care delivery. Such models should be designed to make maximum use of the consultative services pharmacists can provide to optimize drug therapy.

A related recommendation is that pharmacists be paid for the consultative services that they provide. There is a need to disconnect reimbursement from the provision of a product.

Moving to some of the specifics on pharmacare, we would first like to see some tangible evidence of action on the commitment to pharmaceutical management that was made in the first ministers' communique on health issued in September. We would like to see this take the form of a detailed plan to harmonize provincial drug plans and reduce the duplication of activity in administering public plans.

We believe that it is important that the public sector and the private sector start talking to each other, and that the consultation process needs to go on to identify approachs to integrating public and private sector drug benefit plans.

Our final recommendation is to start work urgently on a national pharmacare plan, and in addition to the two previous recommendations, take a first step by ensuring that adequate coverage is provided to individuals currently without insurance, particularly low income families, children, people between jobs, and the less well-off self-employed.

Finally, two strong drivers that will make all this necessary are an aging population, the rapid advances being made in treatments such as gene therapy, and the emergence of pharmacogenomics. This science is fascinating, and in some ways, frightening. We see significant increases in both the sophistication and cost of treatment. Major debates will need to take place on the ethical and moral dilemmas that some of these therapies may pose.

One thing is certain. Genetic research will mean that the economic model that has underpinned the pharmaceutical industry in the 20th century is very likely to change in the 21st century.

The Chairman: Thank you.

Dr. Roger A. Korman, President, IMS Health, Canada: Since I have appeared before this committee previously and have spoken about IMS, I will assume that you know our credentials.

The Chairman: We have had the advertising before, so we are happy to go right to the substance.

Dr. Korman: You pose a very serious question, which is why are drug costs increasing? Clearly, no one has the definitive information.

I will present two main bodies of thought. The first is that we need consistent and continuous evaluation. Second, we can suggest some of the reasons for the variations in utilization, but it is clear that more research needs to be done.

As for continuous evaluation, any organic body requires feedback, whether it is an organism, an organization, or society, and what plagues us, as mentioned by the previous speakers, is simply a lack of feedback as to what is happening. As a result, this society cannot maintain its equilibrium with respect to drug funding or any other health care intervention.

In order to maintain equilibrium, we need a continuous process of evaluation that looks at not only disease, but also interventions, and finally, the population itself. We can summarize those along three dimensions: disease, treatment, and outcomes. Until we can continuously collect that information and then feed it back into the system, disseminate the results, and educate the practitioners as well as the policymakers, we will not have an understanding of health outcomes. In effect, we are driving down a highway without any idea of where it leads, and without clear indications as to how much fuel we have in the tank, how fast we are going, or in which direction we are headed.

To now relate the question to the three dimensions of the Canada Health Care Act, we can look at the increase in costs with respect to universal access, the quality of care, and the impact on the economic dimension.

The total cost of use of drugs is now documented. However, we cannot definitively answer the question of whether it is too much or too little. We can answer the question, more or less, but we cannot answer the question, is this better health?

The variation with respect to the utilization of various therapies is dramatic, as you can see from this slide. However, when we look at the question of universal access, we quickly see that there is significant variation with respect to the utilization of various therapies across the country. In particular, we focused on two kinds of therapy in this presentation, the use of benzodiazepines and the use of Ritalin for attention deficit disorder. We see noticeably dramatic differences across Canada which cannot be explained by variations in population distributions.

The variation with respect to benzodiazepine utilization across the country is greater than a factor of 2.

With this information from the small-area analysis, and looking at the province of Alberta, we can see distinct geographic variations, north to south. When we look within small areas, for example in Calgary -- and we have done this in many metropolitan areas -- we can see the benzodiazepine utilization can vary from as low as less than 1 per cent to in excess of 8 percent in some of the inner-city areas in Halifax.

We know that there is a significant variation in the utilization of pharmaceuticals that does not correlate to population distribution.

Senator Morin: Does that have anything to do with the economic status of the regions?

Dr. Korman: We have noticed a correlation between the use of benzodiazepine and socio-economic status. It is higher in lower socio-economic status areas. That may correlate to lack of access by those populations to other forms of psychotherapy intervention, and so the alternative is drug therapy. Again, we can observe correlations, but we do not understand the causal chain here.

Looking at the use of methylphenidate, which is known as Ritalin popularly, used in the treatment of attention deficit disorder, in the provinces of Quebec and Ontario, there is a wide seasonal variation corresponding with the school year. We cannot explain why, for example, there is a 63 per cent drop-off in utilization during the summer in Quebec, as opposed to a 32 per cent drop-off in Ontario. Is that because children in Quebec are healthier, or are physicians in Quebec more responsive to changes in the children?

The Chairman: The pattern is the same. The seasonal pattern is identical.

Dr. Korman: The seasonal pattern is identical, but the decrease in utilization during the summer months is much greater in one area than the other. Are there different schools of thought? Are there different sensitivities to the population? These are factors that can help us understand utilization.

Looking at other aspects of quality of care, other variations, and looking back to benzodiazepine utilization, there are significant differences with respect to both age and gender.

One statistic not presented here is that we have seen the use of benzodiazepines correlate more closely with the age of the physician than with the age of the patient. That is not surprising. Older physician use older drugs. Of the top 100 prescribers of benzodiazepines in Alberta, Quebec, and Ontario, 90 per cent graduated before 1981. This is another critical factor in the use of pharmaceuticals that points back to continuing medical education and the degree to which physicians are current with the latest therapies.

One dramatic statistic relating to the use of antibiotics, again looking at international comparisons, is that we show twice the utilization of antibiotics compared to Holland. There is a fascinating project in Alberta called "Do Bugs Need Drugs?" We find that when physicians are re-educated and given their own practice information, utilization can be decreased by some 13 per cent. Again, as previously mentioned, putting information back into the system and re-educating the practitioners certainly can impact how drugs are used.

Senator Morin: You do not have recent statistics on that, because I suspect it has dropped very much in Canada. There has been such a drive for physicians to use fewer antibiotics.

Dr. Korman: IMS data are current as of February this year. Indeed, we do see a decrease in use of antibiotics in the country. There certainly has been progress made.

The Chairman: We will have our researchers talk to you, Senator Morin, because I think it would be useful for our report to have more up-to-date data. That pattern is fascinating, but we will get the up-to-date data.

Senator Morin: I am sure it has dropped.

Dr. Korman: I am not exactly sure where I am with time, but I hope there is some allowance for questions.

The Chairman: Yes, there is lots of time.

Dr. Korman: Again, looking at Ritalin, we see a dramatic pattern difference between ourselves and the United States. We are both on the same continent. The physicians are attending the same conferences and reading the same material. Is that to say we are doing a better job of treating attention deficit disorder than practitioners in the United States? It is difficult to know, but there is a dramatically different pattern.

Moving ahead quickly in the interests of time, and looking at variations within physician specialty, two-thirds of the diagnoses of attention deficit disorder are made by psychiatrists in this country, but they only account for one-third of the actual drug recommendations. There is clearly a difference in how different specialties view and use pharmaceutical care.

We know that information at the physician level is highly significant in evaluating patterns of care. There are approximately 17,000 physicians in Quebec. About 5,000 of them write prescriptions for methylphenidate, and 53 of them account for 25 per cent of those prescriptions. Another 131 account for the next 25 per cent, and 408 account for the next 25 per cent of all methylphenidate. Approximately 600 physicians in the province of Quebec account for 75 per cent of the utilization. That is a very striking pattern. If one wanted to alter or change that pattern, one need only address the practising patterns of a very small group.

One may say that there are all kinds of physicians in that analysis. We looked at the pattern of one group, paediatricians, and we noticed the same dramatic variations that beg to be explained by variations in the population. We see 33 of them accounting for one-third of all of the prescriptions written by paediatricians in the province.

There are very dramatic variations in pharmaceutical care and how drugs are viewed and used. The change in the global pattern of use has been observed, but again, do we know whether this is good care or bad care? It is very difficult to say with the available information.

We do know, as was pointed out, that as many as half of all patients do not take their drugs as prescribed. However, other research also shows that half of all patients who walk out of a physician's office do not understand the drug they were given, why they were given it, or how they were supposed to take it. They then go to a community pharmacy -- and Dr. Poston spoke to the woes of community pharmacies. Pharmacists are underfunded, or struggle to be funded to provide any kind of consultative care, and the patient is again under-served. When Dr. Coambs presents statistics on compliance rates in the 10 to 15 to 20 per cent range, none of that should be surprising, based on current information.

The Chairman: Thank you.

Ms Barbara Ouellet, Director Of Home Care and Pharmaceuticals, Health Care Directorate, Policy and Consultation Branch, Health Canada: Thank you for inviting me today. I understood, from the request to Health Canada for me to attend today, that the specific focus was to discuss two recent, or perhaps not-so-recent documents that were produced, one entitled "Drug Prices and Cost Drivers, 1990-97" and the other "Drug Utilization in Canada." These were released in 1999 and initially produced from the federal-provincial point of view as a result of direction from the conference of deputy ministers.

I am aware you have received these reports, so I do not want to take too much time in summarizing the information within them, but I would say that pharmaceutical issues were identified as a priority area. A two-year collaborative work plan was the result. The documents that I mentioned were produced through the co-operative efforts of a federal-provincial-territorial committee known as the Pharmaceutical Issues Committee. Together with Mr. David Bougher from Alberta Health and Wellness, I currently co-chair this committee composed of drug plan managers from federal, provincial, and territorial drug benefit programs. We also have expertise and representation from the Patented Medicine Prices Review Board and the Canadian Institute for Health Information.

As I have said, my purpose today is to help summarize some of the conclusions of the two reports that I mentioned.

"Drug Prices and Cost Drivers" demonstrates the productivity of the collaborative efforts of the federal and provincial governments to actually perform research together and to analyze this critical health care issue.

The analysis of price and expenditure trends, price levels and cost drivers in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia was undertaken. The main findings resulting from the analysis were as follows: Over the seven-year period, 1990 to 1997, the six programs I mentioned saw an increase of 44 per cent in expenditures for prescription drugs from $1.5 billion to $2.2 billion.

One major component accounting for the 44 per cent increase in expenditures was the growth in utilization of existing drugs -- existing drugs were those already in use in 1990, so any drugs after 1991 were considered new drugs for the purpose of the analysis.

The other key factor was the impact of the newer drugs, which were also more costly.

Another finding was that for single-supplier, non-patented drugs -- these are not regulated by the PMPRB -- there was a 13 per cent increase in expenditure in 1997. These were, on average, priced at 30 per cent above PMPRB's median foreign prices index. This index includes the countries of France, Germany, Italy, Switzerland, Sweden, the United Kingdom, and the United States.

The Chairman: For the record, what is the exact name of the PMPRB, the prices review board?

Ms Ouellet: It is the Patented Medicine Prices Review Board.

The Chairman: Give me an example of a non-patented drug versus a patented one.

Ms Ouellet: Not being a pharmacist, I will not give specific drug names. Basically, a patented drug is one for which the manufacturer has applied to the Commissioner of Patents.

The Chairman: It is covered under the 20-year rule.

Ms Ouellet: Yes. There may be drugs that, for example, have had patents and are now off-patent. Generics would fall into the non-patented category. Single-source drugs might also be non-patent.

In comparison to the 30 per cent increase for single-source non-patents above the foreign median prices, those patent drugs that are regulated by the PMPRB actually fell 11 per cent below the median foreign prices. Therefore one can see the impact of the PMPRB.

Senator Morin: This is very important. Putting it another way, the cost of generics is much higher in Canada than it is in any other country. People do not realize that. This is a very important issue the witness is pointing to here.

Ms Ouellet: In addition, an interprovincial analysis showed that between 1993 and 1997, the price differentials amongst the six provinces actually narrowed from an average difference of 8.8 per cent down to 5 per cent. Therefore, there is a certain convergence across the country in the prescription drug area.

You might also be interested to know that work on drug prices and cost drivers is continuing under the guidance of the federal-provincial Pharmaceutical Issues Committee. In 1999, with funding from the budget of that year, Health Canada entered into a memorandum of understanding with the PMPRB to conduct further studies of price and expenditures trends, price levels and cost drivers, as they relate to prescription drug products. One part of this work will be to extend the analysis in these documents to include the other provinces that were not covered, and also to include the federal drug plan for First Nations, known as the Non-Insured Health Benefits Program. This work is currently in progress. At its conclusion, we will have actually completed this analysis for all jurisdictions, for all provincial and federal plans.

The relevance of this work has been highlighted by the priority assigned to pharmaceuticals management issues in the September 11, 2000, first minister's meeting communiqué on health.

You are also probably aware that in March, the Canadian Institute for Health Information released its own report on drug expenditures for the period 1985 to 2000. Just to very quickly highlight from that report, they indicated that drugs continue to consume an increasing share of Canada's health care dollar, accounting for the second largest category of health expenditures next to hospital services. That has perhaps already been mentioned.

Spending on drugs is expected to reach $14.7 billion in 2001, representing 15.5 per cent of total health spending. This is following on increases of 8.9 and 9 per cent in 1999 and 2000.

The second report you asked me to speak to was the "Drug Utilization in Canada" report. Like the report on drug prices and cost drivers, this was undertaken under the direction of the same federal-provincial-territorial Pharmaceutical Issues Committee. The objective was to define the scope of drug utilization issues in Canada and to identify and assess possible initiatives that could be undertaken to ameliorate them.

The main conclusion from that work was that approximately 254 million free prescriptions were dispensed in Canada in 1998, which was an increase of 5.4 per cent over the preceding year. This translated into an average of 8.3 prescriptions per citizen in 1998.

Drug therapy is also an increasingly important component of health care, and appropriate, cost-effective use of drugs is essential in order to optimize health outcomes and avoid other, unnecessary costs -- and I think our previous speakers have mentioned some of those impacts.

Canada does not have good, comprehensive drug use and cost information, which in and of itself is a barrier to any analysis, including analysis of some of the policy directions or potential implications of policy directions. Canadians are also seeking authoritative, evidence-based, patient-oriented information when their prescriptions are written or dispensed.

These efforts, taken all together, are important. I would also point out that we have worked with the Canadian Medical Association, the Canadian Pharmacists Association, and others in conducting this work.

By way of conclusion, I would say that the first ministers' communiqué identified some further priorities for work by governments. These include assessing issues with respect to best practices, including appropriate prescribing; cost-effectiveness analyses of pharmaceuticals; and the extent to which some of the governmental processes for the review of evidence coming from clinical trials and other sources might be streamlined. In fact there may even be some common areas where we could work together.

The Chairman: I would ask the group a broad question. I can take the context for it directly out of Dr. Poston's comment, toward the end of his paper, that the first step should be to ensure that adequate coverage is provided to individuals currently without drug coverage, particularly low income families, children, people between jobs, and the self-employed.

I would like to know what we know about those people. For example, do we have any data on prescriptions that get written but never get filled because people do not have the money? Do we have data on prescriptions that get written, get filled, but in fact are not used properly? Do we have data on people who need drugs but do not get them, largely because of economic considerations? Do we have any data in that general ballpark?

Dr. Coambs: The important element in that whole issue is in your last question. Of course, it is the easier one to answer. After all, there are quite a few good published studies, both Canadian and American, showing a very strong trade-off between the access to and the use of the medication, and later consequences.

In other words, if you raise the price or make the drug less accessible, people will fill the scrips less, renew the scrips less, and use other health care resources more. They will drive up your hospitalization charges if you deny them the drugs. Yes, economics is a barrier, and other access issues are also a barrier.

The Chairman: I was convinced economics was a variable. Do we have hard data?

Dr. Korman: Dr. Tamblyn evaluated the impact of the Quebec program, and that information ought to be obtained by the committee. While it provided universal coverage, it also increased the deductible or the copayment. It did have a measurable impact, as Dr. Coambs pointed out.

Dr. Poston: The bad news is that we do not have good data for Canada. American studies have been done, and Dr. Tamblyn's recent paper, which I referred to in our brief, is one of the first significant studies in Canada to illustrate the scope of the problem. I talked about the administrative burden that pharmacists are currently carrying. Much of that is because people turn up in pharmacies with prescriptions that are no longer covered by their drug plans. The physician does not know what is covered. He writes the prescription. The private drug plan or public drug plan has been changed in the last six months or in the last year. The drug is no longer covered. Our members find themselves having to phone the physician and explain that the drug is no longer covered, or they are faced with having to send the patient back to see the physician at additional cost and inconvenience.

We are certainly hearing a lot of anecdotal evidence. Our members see situations every day in stores across this country where the physician has written a prescription for two drugs. The question to the pharmacist is, "I cannot afford both of them. Which one should I pick? You choose for me and tell me which one I really need to take." That is the burden that is falling on community pharmacists and on patients as a result of the changes in drug plans.

We do not have good statistics on it. Dr. Tamblyn's paper is the first comprehensive effort to study this in Canada, but I think there is significant concern at the grass roots level.

Ms Ouellet: I would agree that there are studies that would be useful. Another report that might be useful to this committee is one that we funded quite extensively under the Health Transition Fund. It is called "Canadians' Access to Insurance for Prescription Medicines." This study identified three scales and attempted to measure access along them: the first having to do with our coverage for routine costs, the second on catastrophic expenses -- essentially last-dollar coverage there -- and the last on the overall ability to pay. In the context of that study, we identified ability to pay according to percentage of disposable income spent on drugs. I think this study might provide some useful information, and we can get that to you.

The Chairman: Is that a public document?

Ms Ouellet: Yes.

The Chairman: How old is the data?

Ms Ouellet: The study was published last year, so it is relatively recent. I will see you get copies of it.

Dr. Poston: I have one more point to add. One of the common findings of studies where pharmacists have critically evaluated patients' drug therapy -- and this is a figure emerging from both the U.S. and Canada -- is that in about 20 per cent of cases, the recommendations are to add drug therapy. This is always a problem when you are trying to evaluate improvements and looking at cost savings. Quite often, you find patients who really need to be on drugs and who, for a variety of reasons, are not receiving them. There is a recommendation to add drugs in about 20 per cent of cases. We obviously need to evaluate the impact of not receiving therapy on long-term health.

Senator LeBreton: These were very helpful and informative presentations. I have questions for each of you based on those presentations.

My first question is for Dr. Coambs. You arrived in your presentation at an assumption that the public is implicitly consenting to an 11 per cent GDP envelope. I do not disagree with that. I think the public is prepared to spend more of GDP. What did you base that on? How did you come to that figure? Was it an assumption, or were there some data you used to come to the 11 per cent GDP figure?

Dr. Coambs: That is a good question. I am glad you asked it, because I expected that someone would. It is mostly a matter of rising trends in which all OECD countries are moving in the same direction. It is fairly safe to suggest that Canada will always retain a position near the top rung, but below the U.S. That 11 per cent is an estimate on my part.

Actually, to answer your question in a very succinct way, it was an educated estimate.

Senator LeBreton: It is at least that.

Dr. Coambs: The best I could do is show you the underlying data that led to the conclusion, but it was especially the upwardly rising trends. It is easy for me to say this. You are the politicians and have to make this happen, but that just seems to be where the data are leading.

Senator LeBreton: It is supported by the public when you ask them about the issues.

Dr. Coambs: They do not say, "We need 11 per cent of GDP," but they do say, "My uncle went to hospital and received poor care. He should have got better."

Senator Morin: That figure rising towards 11 per cent does not necessarily mean that the public is prepared to pay taxes that will lead to 11 per cent, or that the provinces are prepared to pay that. I do not agree that the public or the provinces are prepared to pay for that.

Dr. Coambs: More precisely, I am saying the electorate seems to be telling us in all kinds of different ways -- through public opinion polls and through voting patterns -- that they are not satisfied with current expenditures on health care. I did not even like the idea of raising it to 11 per cent, because I do not like the way we are spending it now. However, I do think we need to raise it a little to buy some elbow room to get things fixed, because we will have to spend some money on some of these prevention and early intervention programs or we will be squeezed in the long run. Either we step into the future or we get dragged into it. If we get dragged into it, we will be spending large amounts of money on last-minute medicine the way we are now, and not really making headway in terms of lengthening lifespans.

Senator LeBreton: The percentage is probably correct. Your assumption is probably correct. They are probably saying, "Take it away from somewhere else and put it there," but they will not pay any more in taxes.

Dr. Coambs: Yes.

Senator LeBreton: Dr. Poston, on the issue of inappropriate prescribing and use of medicines, especially when it comes to the elderly and their use of prescription drugs, how do pharmacists monitor and control that? Is there a system in place so they actually see where drugs are being abused? What powers do they have to step in? They should not be wanting to question doctors. It would be fine if people went to the same pharmacy for all their prescriptions, but is there any way to be linked to other pharmacists? Is there any system whereby, if a senior went and filled three prescriptions here and two there and two somewhere else, that they would be caught? They could be endangering their health.

Dr. Poston: I will answer the last part first. By and large, pharmacies are not able to exchange data. In fact I do not think we will see much progress on that currently because of the privacy debate.

They are all linked in British Columbia. All prescription claims in British Columbia, whether paid for by the public sector or the private sector, go through the government switch.

In fact there is a record on the B.C. pharmacare database of all prescriptions that a patient has received, irrespective of who paid for them. As a pharmacist practising in British Columbia, you do have access to that complete record.

Senator LeBreton: Is that like a smart card?

Dr. Poston: No. It is just the way the health information network is set up in B.C. PharmaNet is the technology.

In most of the public plans and much of the private sector, payment for prescriptions is adjudicated on-line and in real time in the pharmacy. At the time the pharmacist fills the prescription, he or she knows it will be paid. There is messaging to and fro between the payer's database and the pharmacy database. In British Columbia -- and I think they are working on the project in Manitoba and Saskatchewan -- the plan is to be able to provide pharmacists with a complete record of drugs through the PharmaNet systems.

Senator Ferretti Barth: Is that in Quebec too?

Dr. Poston: Yes. Information technology is solving that problem of access to the records. A big area of debate is that pharmacists often do not have access to information on the indication for which the drug is prescribed. That has come to the fore in Ontario recently as a result of some of the policies of the Ontario Drug Benefit Program.

Going back to the first part of the question, that is one of the issues that makes monitoring of outcomes quite difficult. You must have access to that information to be able to successfully monitor outcomes. You can look for patients coming back for refills. There have also been experimental programs to provide pharmacists with a call-back system. The work load is such that they cannot call everyone back, but they will call back those patients who they think really need it.

Then there have been experimental programs using consultative practice models, where pharmacists, through separate funding mechanisms or whatever, have the time to sit down and talk with patients in a more detailed fashion.

Senator Robertson: Can you tell me who has access to the PharmaNet?

Dr. Poston: Community pharmacists have access to it. I think hospital pharmacists have access. That is basically it.

Senator Robertson: The issue of who had access to the information pharmacists have came up last fall, when we were studying privacy legislation. I agree with you that pharmacists should play a larger role. I do not know what I would do without my pharmacist, to tell you the truth. That is not a reflection on my family practitioner. He is so busy that I hate to bother him.

We were advised last fall that there are data collection groups that buy files from pharmacists for the information they contain.

I would be interested in knowing how accessible those files are to organizations or groups that make their livelihood by collecting data and distributing that information, because they contain a great deal of private information. This is one argument we have heard consistently when it comes to privacy.

Dr. Poston: Perhaps I will answer first and then pass the question over to Dr. Korman.

One of the interesting things about the B.C. PharmaNet program is that patients can use a pin number to control access to their records, in the way that we use pin numbers to conduct transactions with the bank or through Interac. The patient has to opt to do it.

Senator Robertson: What percentage uses the pin number?

Dr. Poston: It is very low.

Going back to the sale of files, what usually happens -- and it is a bone of contention -- is that some pharmacies sell data for research and market research purposes, but the patient's name is removed. There is information on prescription drug utilization, but you cannot identify the patient through it. That is the practice.

Senator Robertson: We can debate that again.

Dr. Korman: I cannot speak to the access rules with respect to PharmaNet, but I think they are well documented. I know that PharmaNet de-identifies summary information available for research purposes.

With respect to our own practices, again, I would toss the ball back to Dr. Poston. Our access to information across the country will be governed by the provincial rules with respect to pharmacy, and we have no interest in collecting that information at an identified patient level. However, I think the provincial laws across this country prevent that kind of access. I think the control point is well regulated.

Dr. Poston: It is certainly prohibited in some provinces. B.C. is an example. In others provinces, there are requirements that it not be identified by patient.

We have been serving as the secretariat of the national working group funded by Health Canada to look at privacy of health information issues. One focus of debate and contention is on the appropriate use or otherwise of identified and de-identified information. You will certainly be hearing more about it.

The Chairman: For committee members, I will say that the issue that we were disputing with the government on Bill C-6 may well come back to this committee. It has been left such that if an amicable solution, acceptable to all parties, is not worked out over the next two or three months, the issue will return. I have discussed this question within the last week with senior officials.

Dr. Coambs: One good way to look at this is through patient-level data. There are many different ways to collect data. Basically, we are looking at patient-level data that either have had the identifiers stripped off, or not. They must be present if pharmacies are going to exchange information.

Ultimately, if we are going to run pharmacare, we must have patient-level data with patient identifiers, and we will be exchanging the information. I know that is worrisome, but after all, every provincial health care system also uses patient-level data. Some provinces make them available to researchers; others do not. Some exchange the data and do nuanced research; others do not.

The point is, it will happen anyway. In fact if we are going to implement pharmacare and do it properly, no matter which way we cut that pie, we will need some type of universal patient-level data. How else will we avoid throwing money away on prescriptions that are not necessary, or be able to follow up patients to make sure these drugs are actually being used, or that insulin is being renewed, for example?

Fifty percent of diabetics are not renewing their prescriptions. It is a problem. There is no other way to proceed.

Senator Robertson: It seems to me that we heard evidence that certain pharmaceutical companies could obtain the names of doctors who were not using their drugs from pharmacies.

Dr. Coambs: That is doctor-level data. That is different.

Senator Robertson: They are still getting records. Then they visit them and make sure they understand how to prescribe them to the patients, and try to sell the drugs. That is another privacy issue. I mention it because I know it is a concern to many of our colleagues in the Senate.

Dr. Coambs: We cannot just say it is terrible and we should avoid it because it is so complicated and intimidating. Unfortunately, I think we will have to go the Bill C-6 route and roll up our sleeves and figure out how to manage our way through it. The data will get used. Every provincial ministry is talking about electronic patient records. It will either get control of us or we will get control of it.

Senator Robertson: You may well be right.

Senator LeBreton: I think that has improved. We will have to face reality at some point.

Dr. Korman, I have one specific question about slide 21 on page 11 of your binder. I was shocked by these comparison figures between Canada and the United States on Ritalin prescriptions. Do you have any background for that data? Are Canadians over-prescribing, or do we not tolerate kids who are more active? What is the reason for that? Do you know? Have you had a chance to delve into it?

Dr. Korman: I think your question is at the nub of a larger issue. We systemically lack information as to why practice is conducted in various ways. I just recently saw the U.S. numbers, and I am shocked at the difference myself. It may point to Canadian physicians having better information, being more appropriately educated, and using the drugs as prescribed. It is very difficult to tell at this point.

Senator LeBreton: When a statistic like that comes up in your study, is there some mechanism to trigger further research? What happens? Does it just sit there as a statistic on a graph?

Dr. Korman: We are able to analyze the information down to certain levels of geography. Clearly, we want to first establish whether there is a relationship in the broad population demographics that supports such a differentiation. Within that, we will look at small areas of analysis, or we will look at groups of practitioners.

Going back to the question of the value of the information, this is one of its most valuable uses -- comparing groups of practitioners and trying to understand what is happening in their local population area, as well as perhaps within their specialty, their own educational profile, that might explain these variations. We have peeled back some of the correlational variables, but we do not necessarily understanding the real cause of the difference. We see that there is variation with socio-economic status of the population and their ability to fill prescriptions or have access to alternative kinds of care. Again, back to the Ritalin example, if one does not have access to psychotherapy, or has limited access to the provincial system, perhaps higher drug utilization is a generally effective alternative. We will see differences in physician profiles that correspond with utilization.

We really are only scratching the surface. This is where one is torn. Yes, the system requires more resources, but yet at the same time we have such a poor understanding of how well the existing resources are used that the choices are not easy to make.

Senator Fairbairn: I too was shocked to see this particular graph. I would have thought, if anything, that it would have been perhaps the other way around. Through research, there are new types of therapy being tried and tested and indeed used in Canada that deal with attention deficit disorder problems without focusing on drugs. There is a clinic in Calgary where, through some special type of brain scanning and whatever, they are working on other strategies. Would there be more access to that type of treatment in the United States than there is here? Would the use of Ritalin be more of a solution here because of a lack of some of these developing processes?

Dr. Coambs: I will put on my psychologist's hat, which is another hat that I wear, to answer that. Basically, Ritalin-type medication has been used to treat hyperactivity for a lengthy period of time. It is actually a very good medication. It started to lose popularity about a decade ago because, almost exactly as you are saying, there was a feeling that there had to be a better way. A better way has not been found. Canadians, who are much less narco-phobic than Americans, realized that the best thing they could do right now was mediate with methylphenidate and support it with therapy. It has come back into favour because the clinicians out there saw it was the best thing to do. Americans will always be worried about anything that could be subject to abuse. We write many more scrips for codeine, and they write scrips for other things that they think are not addictive, but in fact are, like Darvon. They are narco-phobic and do silly prescribing things in the U.S., whereas in Canada we are more likely to say, "If it helps, we will write a scrip for it and manage the substance abuse risks."

Dr. Poston: If you are using methylphenidate as a micro-example of the problems, I think you need to be extremely careful in interpreting data based on small area variation. Let us stick with methylphenidate as the example. First, we need evidence-based medicine to develop prescribing guidelines for the appropriate use of methylphenidate in the management of this disorder. Is it the best choice of treatment or not? Who does it work for, and who does it not work for? Let us get good prescribing guidelines in place. We should be careful, though, that we interpret utilization data correctly and address the quality-of-use issue. If you have a child with attention deficit disorder, you will take that child to the best physician in Ottawa who manages hyperactivity and attention deficit disorder. Certainly that physician will write a lot of prescriptions for that particular drug. You will get clusters like that normally.

This is at the root of our first recommendation. CIHR needs to conduct studies to evaluate the quality of drug use as a priority. You do not know, from these data, whether this drug has been used appropriately or not. Are the right children getting it? Is it being used in the right doses? What are the outcomes? The real need is to dig, as Dr. Korman said, below the surface of the utilization data and get to the quality question, so we know that we have guidelines in place and that drugs are being prescribed and consumed appropriately. All the systems to ensure that need to be in place before we go to a national pharmacare program.

Dr. Korman: For additional emphasis, we have tonnes of data, but we lack mechanisms to feed that information back into the system. We know that when information is fed back into the system, it has a material effect. In the right context, it can have a positive effect. I mentioned the Alberta study, "Do Bugs Need Drugs?" It was a public health initiative. Physicians were reacquainted with the prescribing guidelines, and there was a 13 per cent reduction in antibiotic use and a more appropriate use of the various levels of therapy.

The difficulty, by and large, is that many people are data-phobic. It is as if information will be injurious to their misconceptions. People feel that they are doing the best job they can and that they are up to current speed. How many people have you met who have less of an opinion of themselves?

We also have to overcome the context in which information is shared, and it has to be done in an educational, not punitive manner.

We have a big task in first collecting good information, then evaluating it and cycling it back into the system in such a way that it can make a material impact. It will make a material impact.

Senator Morin: I have three short comments. My first one is addressed to Dr. Poston. He talked about the bold experiment in Quebec. Was he talking about the introduction of user fees for older patients? Was he talking of the two occasions on which the legislature introduced back-to-work legislation for the pharmacists? Or is it the pharmacare plan, which is by far the most expensive in the country?

I was interested to see Dr. Korman's data. I did not have the information for last year. It has been increasing by between 15 and 17 per cent per year. I see that again, last year, Quebec is on top, at 11 per cent. The other provinces are at 3 per cent, 2 per cent, 4 per cent, and Quebec is at 11 per cent with this pharmacare. This is a bold experiment, as you say.

Dr. Poston: Those are excellent questions.

Senator Morin: Should I put all my questions first?

Second, I applaud Dr. Korman's point on the need for information. I think it is very important. We will be discussing this information on other occasions. I understand the comments concerning privacy. I note the discussion we had this afternoon about the absolute necessity of having more information on drug utilization, regions, patients and physicians, so we can have feedback. We do not currently have feedback for the physicians or for the regions. I think that is very important. If someone is really showing an unusual pattern for whatever reason, I think there should be feedback.

I was hoping for more recommendations from our experts concerning the role of the federal government. Much of what we are discussing is really at the provincial level. For example, should we have a national formulary? That would help. The provinces are subjected to many political pressures to introduce new drugs. There is a strong multiple sclerosis lobby in each province, which is okay, and they are trying to bring in new, expensive medication. That is their job. However, it would be easier to have a national formulary, where the federal government, or the provinces with the federal government, could resist those strong political pressures. You see, often all the scientific advice is against putting a new drug on the formulary, but finally the minister bows to political pressure. I personally think that would be a good way of reducing that.

I was expecting more from Dr. Poston concerning pharmacist prescriptions. I am a strong believer in that. You referred to it briefly as far as contraceptives go. I think there is a large field where pharmacist prescriptions could be used more. This would be an important role and would reduce costs. Unfortunately, as you probably know from all the work done south of the border on HMOs, there is no proof that evidence-based utilization of drugs reduces volume. It increases volume. Your example, cholesterol-lowering drugs, do not reduce costs, but increase them, because they are expensive medications and you have to treat 1,000 patients to prevent one case. I am not saying you should not use them, but these are not cost-reducing procedures. They increase costs.

Our major problem right now, as you pointed out, is the fact that we are trying to find ways to reduce costs.

Dr. Poston: The bold experiment was the introduction of a universal pharmacare program, particularly the focus on integrating public and private funding. It is the first experiment -- perhaps I should not use the word "experiment" -- where we have seen a constructive, creative effort to integrate the public and private sectors in funding a pharmacare program. We need to look at that carefully. Now, whether that type of model is reproducible in the rest of country is a matter of debate, because the history of the insurance industry in Quebec is rather special.

We have to realize that clearly there were some assumptions made going into the program that have since been proven wrong and have caused problems, and we have seen other problems emerge. However, I give a lot of credit to the Quebec government for seeking to evaluate the changes they made. Most of the provincial governments in Canada have made significant changes to their drug plans but have paid little attention to evaluation. Quebec needs to be given credit for actually putting money into an evaluation of the impact of the program.

The increasing costs we are seeing is a separate issue in Quebec because it has chosen to sustain the international pharmaceutical industry within its borders, and to some extent, public policy on the provincial drug plan reflects a less restrictive approach to the listing of new pharmaceuticals than in other provinces. As a consequence, we are seeing the increases in cost. Those are my comments on the first question.

Do we need a national formulary? We would say yes. In the report we circulated, we discussed that issue and recommended that should happen. I think the advantages outweigh the disadvantages.

As to pharmacists prescribing, we actually have a discussion paper that we prepared for the profession and we are having a very active debate within the profession at the moment about exactly what form pharmacist prescribing should take. As I say, the initial progress has been in British Columbia with emergency contraception, and that model is also being actively looked at in Saskatchewan and in Ontario.

Dr. Coambs: To reply to Senator Morin about costs, is there a way you can make a trade-off? I understand your concern. If you started reimbursing for all the cholesterol-lowering medication, that would cost you a lot of money. Perhaps you would save some money on hospitalization, but it seemed to you there would be a net loss. I think that is an interesting position. I certainly think we need to be sceptical about every medication class. Specifically with cholesterol, it is likely that reimbursing for at least a generic drug, because there are some new, good generics in that category, could be cost-effective. Certainly, it is generally a good deal across the board. Antidepressants would be a good example of where the cost of the medication is tiny compared to the associated cost. Basically, you get a different pattern with each one. Without antidepressants, you get a lot of productivity loss because people cannot work, so the meds are cheap compared to that. As for cholesterol, the cost of a death is about $400,000. That is a very conservative number, assuming that after 65 you have no value. If you die in mid-life, you lose, but just a few deaths can pay for a lot of meds.

The Chairman: Explain that. That is a wonderful number to pick out of the air. Tell me how you calculate it, roughly.

Dr. Coambs: I am referring to mid-life death. This is done by health economists. We are doing it right now in a publication that we are completing. Basically, we look at the productivity of that person on an annualized basis and the number of years they live. Assuming that the day that they retire, they cease to be productive to the world and are worth zero, you still come up with those kinds of numbers. If you die in mid-life, you lose about $400,000.

The Chairman: In your theory, if you die at age 70, it is cost free.

Dr. Coambs: Right.

Senator Morin: They give you money back.

The Chairman: Only an economist could come up with that.

Dr. Coambs: That is the way economists think.

The Chairman: You have restored all of my natural scepticism about economics.

Dr. Coambs: The point is that that is a very conservative number. Does reimbursing meds pay for itself? Usually. Should we be sceptical in each case and make sure the arithmetic works out? Definitely.

Senator Keon: There is much talk about a national pharmacare program and so forth. It seems to me that we are going at it all backwards. The whole focus is on the drugs. You have given some examples already, but in reality, the drugs are simply a tool in the management of a disease. If we do not know the outcome of the disease relative to the drugs used, we are just wasting our time, pretty much.

Hypertension is a good example. It is a total mess right now, if you want to be realistic about it. Again, you get the problem of people being on anti-hypertensives that they can afford, because the new ACE inhibitors are not paid for in the plans or are just not being properly managed, and so on. You pointed out already that about only 20 per cent of them are properly managed.

Therefore, if you people are here collectively to try to sell a national pharmacare program, I think it has to target the big diseases that are associated with big drug use. You must have the population health resources and the epidemiological resources in place to see the outcomes of the interventions you are making.

There has been a tremendous amount of good epidemiology done on drugs. I am not suggesting there has not been, but it is all focused on the drugs and driven by the pharmaceutical companies. It is not focused on the disease.

Dr. Korman: Let us think about this globally. I am torn with respect to a pharmacare program. I am not one to advocate a policy or program. On the one hand, we understand that some people lack the means to obtain important drugs. On the other hand, when we look at drug utilization alone, without reference to disease, many studies show that approximately 10 per cent of drug prescriptions are not filled, sometimes for economic reasons, but sometimes because patients do not understand what they were prescribed.

Much research over the last 50 years on patient compliance shows the same results. About one-third of patients take their drugs to therapeutic effect. About one-third do not. That it is a wasted expenditure. One-third take their drugs, depending on the severity of the illness, the symptoms, and a host of other factors.

While we talk about increasing spending and resources in the system, we know at the same time that the efficiency of the utilization of that spending is rather suspect. I often think of my car going down the road, the map is not all that clear, and I have very few gauges. Are we talking about now putting super gas in the tank so we can go that much faster? I am not sure that is the right thing to do.

It occurs to me that we ought to ensure that this country has an excellent water supply, because we know that public health has a material impact far greater than medical intervention. We ought to have excellent nutrition, and that really speaks to some of the causes of disease that manifest themselves in the physician's office.

I am a great supporter of your line of thinking that we have to be much more focused in how we apply resources to the system, as opposed to taking this broad-brush approach and assuming that one program will be the best way to make an impact.

Dr. Coambs: I talked about unit costs in my presentation. Perhaps I did not clarify that. I was not speaking of the unit cost of a drug, but of a disease. If you have hypertension, that is our unit. What is the cost to control that unit?

Put aside for a moment how much the rubber gloves or the hospital gurney will cost. Let us look at the cost of the whole package to treat hypertension. I completely agree, we must think of it as a disease entity experienced by a patient. That is my unit. I agree with that.

Dr. Poston: I agree with the comments. You may have noticed that when we called for an investigation of a national pharmacare program, we saw the need to add the principles of efficiency and affordability. We must look at the efficiency issues that Dr. Korman spoke about.

I think the critical point here is that it is an equity issue. Even if you target the big diseases, for example, and have a pharmacological intervention to manage a disease successfully that adds significantly to an individual's quality of life, there are people in the current system in Canada who are denied access to that medication because of their lack of ability to pay. There is an enormous equity issue here in the funding of health care interventions.

Senator Keon: That is certainly true. It is a terrible problem. My question to you, though, is how can we look at a solution to that problem? I think, in Dr. Coambs' presentation, he was trying to look down the road at preventing serious consequences at the beginning of a disease.

I have felt for a very long time that our whole health care system is wrong. For example, I have spent my life zeroed in on the heart. I believed if you zeroed in on the heart, you could make an impact on the local population, and we have done that.

If our federal government, for example, could handle the politics of it, and if the ideal drug management of hypertension were addressed and published, I think that would eliminate the problems with the guy walking in and wanting an ACE inhibitor that he cannot afford. I am interested in your thinking.

I enjoyed all of your presentations.

Dr. Korman: I am stuck on my theme for life, which is information. There is an enormous amount of waste in the system. Drugs are inappropriately prescribed, for one reason or another, or prescribed and not used. My mind first turns to how we can reduce that waste so those resources become available. You raise an excellent point about equity, and I do not have an easy answer.

I just return to the point that if we can get information back into the field, so that practitioners as well as patients can understand what is good practice, we could say, "Well, here is the ideal." We have a project on the drawing board to feed back to physicians their prescribing profiles and standards of practice.

We do not know their patients and their diagnoses, but it is the beginning of a process where a physician can see the guidelines of best practice and their own practice pattern. This will start to provoke a series of questions in one's mind such as, "Am I doing the best job? How can we get information back?" Obviously, physicians are intent on giving good care or they would not be in that occupation. If we can get information back into the system, I think we can recapture some of the resources.

Senator Morin: Feedback both to physicians and to regions is very important.

Senator Robertson: Dr. Korman, you touched on something that is of great interest -- you mentioned safe water, public health, et cetera, that do so much for the health of our people. I am getting away from the pharmaceuticals for the moment, but do you have any information on countries that are doing so much better than we are with sustainable longevity? That is, where you start early to teach people how to live properly and how to conduct their lifestyles, et cetera. Some countries do very well at this. Have you data on that?

Dr. Korman: Unfortunately, we do not. However, those are the kinds of questions that we should be asking and answering and finding the outcomes, too.

Senator Morin: We are not doing poorly at all. We are second in the world.

The Chairman: "Second in the world" in what?

Senator Morin: In longevity. If our First Nations had the same health status as other Canadians, we would be by far the first nation in the world. We are not doing that poorly. The health status of Canadians is good. That was in the report that you presented today in the Senate, Mr. Chairman.

The Chairman: It is also a very sad comment on the way that we have handled Aboriginals.

Senator Morin: That is the major problem. What is even more tragic is that this is a federal responsibility.

The Chairman: Exclusively.

Senator Morin: Yes. We cannot point the finger at anyone else.

Senator Fairbairn: Dr. Poston, you touched in your comments on your concern and the concern of the industry over the situation developing in rural areas. One always hears of practitioners being difficult either to find or to retain. I had not focused on the notion of pharmacies and pharmacists in the same way. As it is with so many doctors, is this a question of quality of life in going to rural or remote areas? Is that the same kind of barrier that exists with people in the pharmaceutical and pharmacy business, or is it something else? Is it the ability to earn a living or is it the quality of life?

Dr. Poston: It is a little different from the physician situation. With the store closures that we have seen, pharmacists usually have independent pharmacies in rural areas. Because of the national shortage that we are facing, they are unable to get relief. They decide to take early retirement and close their stores. We have been able to get pharmacists to work in rural areas, but usually the pharmacies there must pay significantly higher wages to attract them. Where there is a shortage, we are seeing a brain drain to south of the border, for example, where higher wages are being paid to attract pharmacists. If the choice is between going to Seattle or to rural Northern British Columbia, people are opting for Seattle. That is the type of effect. It is economic to a certain extent. It is not that people do not want to work in rural areas, but it is becoming increasingly difficult, because of the shortage situation, to get enough people to provide relief, so stores are simply closing.

Senator Fairbairn: What can you do about it?

Dr. Poston: We have been working closely with HRDC. We have done a situational analysis and we are doing an occupational sector study to try to develop a forecasting model to help us do better human resource planning for pharmacies and to try to predict these cycles. We have seen cycles in human resource requirements for pharmacy and we are trying to evaluate and investigate that more. HRDC is leading an initiative to broaden the perspective by looking at integrated health human resource planning. For example, what do we need a physician to do and where do we need a physician? What do we need a nurse practitioner to do and how should we use nurse practitioners? I have called today for a greater role for pharmacists, particularly in primary health care. Where should we be using pharmacists and how can we make the best use of them? How do we use pharmacy technicians to do more of the routine distributive work? We must look at the big picture in solving the health human resource problem. We are trying to do what we can within our own sector. The problem is that, historically, Canada solved the problem by importing a few more Brits or South Africans. The bad news is that Britain and most of the other English-speaking countries are also experiencing severe shortages of pharmacists. That solution that we have had on the shelf over the years is not available this time.

Senator Fairbairn: I will direct my next question to Ms Ouellet and then anyone else can jump in. I have long been involved with literacy in Canada and the ability of our population to read and write and to communicate in a meaningful way.

I was struck by the report on drug utilization and the emphasis that was placed towards the end on the importance of information, accessing quality information, the expertise required, and your own presentation today. We were talking about other surveys and about information that we get from the OECD, and the very sophisticated information that we get from Statistics Canada. We are told that over 40 per cent of adult Canadians are at risk because of varying degrees of difficulty in daily reading and writing of routine material clearly presented to them that everyone in this room would take totally for granted. That statistic rises to over 60 per cent in older Canadians.

In the work with which I have been involved, I do not think there is anything more frightening than the impact on those who cannot read their medication details and cannot understand instructions. In addition to not having those skills, there are also eyesight problems in older people. Equally as shattering are young mothers, often teens, who have babies and find difficulty even reading a formula box.

Has Health Canada partnered at all in trying to find some way, whether it be with physicians or dentists or pharmacists, to use plain language, plainly and clearly presented, so that when things of vital interest and necessity to a person's health are prescribed, they can be understood and properly carried out?

Some quite terrible things have happened in many cases over the years. There must be a solution. Is this part of the work that you are doing? Is anyone really making an effort to see what we can do? This potentially affects millions of Canadians.

Ms Ouellet: I would say that in general terms, this is obviously an important issue for Health Canada. I would not say that we have particularly undertaken any significant initiatives as it relates to the topic today, which is prescription drugs, reading drug labels and understanding interactions and so on. I would say that is an important area where we need to move further in thinking about the impacts of non-compliance -- either non-compliance because of confusion about one's medication, or non-compliance because of misreading or the inability to properly understand instructions. Quite frankly, some of the things Dr. Poston talked about with respect to the role of pharmacists are important.

We have been discussing the work on primary health care with the provinces. You may know that some federal funding was provided, as a result of the first ministers' agreement in September, to support provinces in bringing together multi-disciplinary teams of frontline providers to give Canadians that one-stop access to information. This could come from a physician, a pharmacist, a nurse, or some combination of providers who are attempting to work together to meet needs. In fact these primary health care organizations would actually have something of an outreach function, a needs assessment function, and be able to identify people at risk for a variety of reasons, including literacy, and perhaps not receiving appropriate care or achieving the best outcomes associated with prescriptions or other kinds of interventions.

We have actually done this in, for example, heart health, where we have partnered closely with a variety of professional and voluntary organizations. We have tried to initiate community-based initiatives that can reach out, that can talk about disease and proper courses of treatment, and support individuals. I would certainly agree that this is an important area in the potentially adverse consequences of pharmaceutical use.

Dr. Poston: You are correct that we have not done a good job. We are working closely with the Canadian Public Health Association, which currently has a major initiative on literacy and health. We have lobbied Health Canada over the years to address issues like sound-alike, look-alike names, to try to reduce some of the confusion, particularly over non-prescription medicines. Health Canada has an ongoing initiative to look at labelling of non-prescription medicines. That certainly is an issue.

Many pharmacy software systems now enable you to print off an information leaflet to hand to the patient at the time of dispensing. Some of the more sophisticated ones actually allow you to set the level of literacy that you want the leaflet to use. That is not widely available, but the technology to do it is there. We are making some progress.

We developed a program called "Just Checking," which is a simple, 10-question tool for community pharmacists to identify drug-related problems in seniors. We developed that tool with focus groups of seniors, and it was the simple issues that came out. They were not concerned with grand therapeutic dilemmas, but rather with being able to read the label, being able to get the container open, and having something to help them to remember to take their medicines. Those were the grassroots seniors' issues, and the program we developed involved the packaging and the labelling, where we put together a series of tips and guidelines for pharmacists to use to try to make the information more legible. It is an ongoing issue.

A further complication, which involves some of the privacy issues, is that many times, the pharmacist does not see the patient. It is a caregiver, a son, a daughter, a relative, or the neighbour, who visits the pharmacy. One thing that we have called for, and which has been funded on an experimental basis in some provinces, is having pharmacists do domicile visits to patients in need. Often it is the health visitor, the community nurse, who comes into the pharmacy and says, "Mrs. Smith's medication is in an awful mess. Could you go and see her?" There are compliance aids and various devices that can help with medicine management, but it is one of those really practical areas of everyday patient care where everyone needs to focus on doing a better job.

Senator Fairbairn: Particularly when we are getting more and more into the question of home care, which makes it even more difficult.

Dr. Coambs: We have suggested a way to do that. We have a national formulary, and if drug company X wants a drug on that formulary, there will be a patient support program, including a 1-800 number that anyone can call to get advice. Furthermore, we will make it an outreach program. Dr. Poston's group will feed us information, or our patient-level system will tell us this patient is not refilling the prescription, and we will call to see if there is a problem. Perhaps they did not understand the instructions. Who will pay for that? The drug company, if they want to be on the formulary. That is the motivator for them. Everyone wins, because they get their drug on the formulary, but we get to see to it that patients use it more effectively and appropriately, and the ones who need help can receive it.

The telephone line is there for any patients who are not renewing or are having trouble. It is worth doing because we are keeping the patients out of hospital or keeping them from dying, which is expensive.

That was my solution. Of course, it goes with a pharmacare program. You have the national formulary in pharmacare. If you want your drug X on the formulary, then this is what you need to do.

Senator Robertson: Ms Ouellet, most provinces have some sort of pre-authorization for new drugs through their clinical experts, the panels. Are they working well or not? The only information I have is from Veterans Affairs, who advised that they have saved millions of dollars -- I believe $10 million was the latest figure -- by using an expert panel to pre-authorize drugs. Do you have any other information on that?

My second question is also to Ms Ouellet. As you work with the provincial ministers and their staff, are you hearing any constitutional issues being raised on a national pharmacare program?

Ms Ouellet: I will deal with the first question first, since the second one is quite "loaded."

The only other jurisdiction that I can comment on is British Columbia. Representatives from British Columbia and I were at a conference that took place earlier this week. Questions have been raised about the extent to which their approach, including the reference-based pricing system and prior approval process, does not permit appropriate access to different medications according to need. They informed us -- and this has not yet been published but I understand it will be shortly -- that three universities are currently conducting an analysis of the impacts.

The University of Washington is looking at gastric acid suppression drugs, McMaster at anti-angina drugs, and Harvard at ACE inhibitors. They are trying to identify -- obviously there are data limitations here -- impacts on drug plan costs, as well as unexpected or rising admissions to hospitals or visits to physicians, or other kinds of indicators of "under-treatment," if you will. These data are not available yet.

It is very helpful that British Columbia, and I suspect other provinces, is very concerned about overall health budgets. As much as they must pay attention to the double digit increases in their pharmacare budgets, that cannot be at the expense of inappropriate use of other resources across the system. There is a growing interest in managing not just the drug budgets, but also the overall use of services. That may in fact mean some drug budgets should continue to increase, if it can be proven that that is creating benefits elsewhere in the system and contributing to overall better health.

With respect to pharmacare, a fairly broad proposal was made to governments in the early 1990s that included aspects of what we are talking about here, including national formularies. The issue for the provinces is that they are trying to manage their own resources in ways that best meet the needs of their own populations. That may mean, for example, that if they have a high senior population, then there will be certain demands for access to pharmaceuticals for that population. If they have a high proportion of AIDS patients, then they will need to deal with those needs as well. They are desperately trying to ensure that the drugs they list are appropriate for their citizens. In fact, as some drugs lose their effectiveness and better ones become available, can they actually be removed from the formularies? I would say that there is currently no desire or will to talk about one national formulary because of the need to respond flexibly to their own population needs, which they argue would differ.

The Chairman: I have to ask this because of your last sentence. I believe the provinces may well tell you that the needs of their populations differ. I have to believe that although people may say that, there is absolutely no factual basis for it. When you look at 1 million people or more, the basic health needs of the population in the Canadian context are statistically not different at all. Would you agree with that statement, or am I wrong?

Ms Ouellet: I would say that is generally true on a population level. At the same time, we do know that the proportion of seniors, the proportion of, for example, HIV-AIDS cases, may vary from province to province, depending upon the make-up of the populations.

The Chairman: That has nothing to do with the formulary. That has to do with the usage rate of different drugs on the formulary. I understand that. If you have a population of only seniors, you will have a different usage rate of drugs. It has nothing to do with the common list of drugs.

Ms Ouellet: That is true, except that in terms of deciding whether or not to list, most provinces now -- and some are asking that it be put in writing -- are looking at projected utilization, and therefore total cost to the formulary five or ten years out.

The Chairman: That I believe. You are saying -- this is really scary -- that drugs which happen to be expensive and impact a large portion of the population are less likely to get put on the formulary, because, by definition, they will use up more of the budget than less expensive drugs that affect fewer people. Looking at the problem the way you have described it, which is the way I believe many people who only look at the dollar costs would do, is about as perverse a way of deciding what ought to go on the formulary as I could possibly imagine.

Ms Ouellet: I would not describe it exactly as you have done. The decision on whether or not to list is taken on a number of grounds. Obviously the greater therapeutic benefit that this drug will provide over existing drugs is a key factor. "Breakthrough" drugs will have significant therapeutic benefit over what is currently available. Even if the clientele for that drug group is limited, provinces will not refuse to list it because it is high cost. It becomes much more difficult when there is a very moderate or minor benefit over existing treatments. Some provinces will simply want the flexibility to choose not to list. Others may decide that there is enough value for their populations that they do belong on the list. I do not think it is about limiting treatment for any particular high-cost, narrow clientele. Obviously your question is based on constitutional issues.

The Chairman: Not my question.

Ms Ouellet: The original question was. There will always be a desire to try to balance the resources to meet needs and have the flexibility to decide, particularly on the marginal issues, the extent to which they feel they have the population base that will benefit.

Dr. Coambs: Yes, you might have problems with each province over the national formulary, but you can still set one up and say, "This is the national formulary. We recommend you use it." That does not mean every province would adopt it, but most would because it is so much easier just to take it off the shelf. You see, that is what is General Motors does when figuring out what drugs they will reimburse the workers for. They say, "What is the provincial formulary in Ontario? We will just use that." Off-the-shelf formularies are commonly used. It could be a legitimate way to go. Just set up a formulary and then back-sell it over the year.

I think Ms Ouellet is being too nice to the provinces. Imitrex is a migraine drug that is quite expensive per unit. There is huge pressure on the formulary people in each province to say, "Well, perhaps we should de-list it because it is too expensive." They often respond to that pressure, although not always. That is a major part of the dynamic.

We have been dancing around this all afternoon. This "silo effect" is the worst problem. How do you manage a disease when people are trying to manage their own budget silos and fighting over resources, while the poor little patient is getting lost?

Dr. Poston: The comments go right to the principle of universality. If you adopt that principle, the logic is 100 per cent correct. We are hearing rhetoric about people managing catastrophic drug plans. This is why the logic seems perverse to Canadians brought up on a publicly funded health care system. Targeted formularies become important. Target the provincial drug plan expenditures of the people who control access through issues like what will cost a lot of money and where will the benefits be. If you adopt the principle of universality, many of the issues disappear.

The Chairman: That is why we do not have a universal public health program. We have a universal hospital and doctor program, which is quite different.

Senator Cohen: We heard earlier today that generic drug prices are often higher here than in the United States. Senator Morin says that must be addressed.

The federal-provincial-territorial pharmaceutical task force that is checking pharmaceutical prices also found that some generic drug prices in Canada were higher than their patented equivalents.

I would like to hear your comments. As a layperson, I was always under the impression that generic drugs were less expensive and therefore more accessible. I would like to hear your comment on that too.

Dr. Poston: In the succession of reviews and consultations that have gone on with respect to the PMPRB and patent laws over probably the last seven or eight years, our association has consistently called for the mandate to be expanded to cover all drugs paid for in Canada by public plans. Thus, it would cover patented, non-patented, and generics. We would certainly see that as a critical condition if we ever moved to a national pharmacare program.

One of the consequences of Canada's unique compulsory licensing system is decreased competition among generic companies in our market. Although having said that, it is becoming more competitive. Structural changes are at work that will lead to that. There is more competition in the generic market in other countries, particularly in Europe.

Senator Morin: We are saying that patented drugs in Canada are between 10 and 15 per cent lower than internationally, while generic drugs are 30 per cent higher. We are not saying that generic drugs are more expensive than patented drugs, we are just comparing them to the international prices. The generics remain cheaper than the patented drugs.

The Chairman: The data say we are doing a better job of controlling the cost of patent medicines than we are of generics if the frame of reference is corresponding international prices.

Ms Ouellet: The difference is because, as you said, we are doing a very good job now on the patent medicines. Before the PMPRB was established, we were also on the high side on patent drugs relative to those seven comparative countries that I mentioned. We were well above the median. We have been able to reduce the prices of the patented medicines. However, the generics are not price-managed or influenced in the same way.

Dr. Coambs: At the expense of having Dr. Poston never speak to me again, you must remember that you are not selling a generic to a patient, you are selling it to someone who will pass it on. Generic drug companies do a significant amount of work with pharmacies and pharmacy chains. They want to get into the "pharmaceutical good books." The guy who makes Valium has five other competitors making the same drug. The price is about the same. He may offer special perks, goodies, or volume discounts to the pharmacy or pharmacy chain to ensure that the pharmacist dispenses his Valium. There are deals within deals with pharmacists that can be part of that pricing problem.

Dr. Poston: Provincial governments are well aware of those issues and are addressing that through some of the reimbursement strategies they are working on.

The Chairman: On behalf of all members of the committee, I thank you all for a fascinating two and a half hours.

The committee adjourned.