Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 7 - Evidence - February 26, 2014
OTTAWA, Wednesday, February 26, 2014
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 4:13 p.m. to continue its study on prescription pharmaceuticals in Canada (topic: The nature of unintended consequences in the use of prescription pharmaceuticals).
Senator Kelvin Kenneth Ogilvie (Chair) in the chair.
[Translation]
The Chair: Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
[English]
My name is Kelvin Ogilvie, a senator from Nova Scotia and chair of the committee. I want to start the meeting by asking my colleagues to introduce themselves, starting on my left.
Senator Eggleton: Art Eggleton, senator from Toronto and deputy chair of this committee.
Senator Chaput: Maria Chaput, Manitoba.
Senator Cordy: Jane Cordy, a senator from Nova Scotia.
Senator Enverga: Tobias Enverga from Ontario.
Senator Seth: Asha Seth, Toronto, Ontario.
Senator Eaton: Nicole Eaton, Ontario.
Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.
Senator Seidman: Judith Seidman from Montreal, Quebec.
The Chair: I want to welcome our distinguished witnesses here today. I'm delighted you were able to accept our invitation and appear with us regarding our agenda, which is the topic of prescription pharmaceuticals in Canada. This is part 4 of a series of studies that we have been doing on prescription pharmaceuticals. In this phase, we're dealing with the unintended consequences of prescription pharmaceuticals. Today we are looking at drug shortages, issues all of you folks have some clear knowledge about.
I understand from the clerk that there hasn't been an arm wrestling contest to decide who would like to go first or last, so I'm going to call you in the order that you appear on my agenda. I will invite Diane McArthur, Assistant Deputy Minister of the Public Drug Programs Division of the Ontario Ministry of Health and Long-Term Care.
Diane McArthur, Assistant Deputy Minister, Public Drug Programs Division, Ontario Ministry of Health and Long-Term Care: Thank you for your invitation to present to you today. Unlike almost everybody else who comes to speak to you, I do not have prepared remarks. I circulated a slide deck, just to keep to some of the high points into which my colleagues will probably delve in more detail.
To start off, for the most part, pharmaceutical shortages are not new to the health system. They are the reality that has always been in place in the system. However, I think the extent and intensity of those shortages have changed over the years.
So far, the shortage issue really has impacted us in the health system in hospitals, primarily. In places where we have critical and vulnerable patients, the shortages have resulted in delays and cancellations of surgeries and have had some serious health impacts for individuals.
We are seeing some shortage impacts in community pharmacies as well, and the real impact there is on the pharmacist working with the patient to try to find alternative therapies where they can. In some places, there are no alternatives. That's a workforce issue, a time issue and a patient care issue.
Why are we seeing drug shortages escalate in the system? Part of that is the impact of globalization. We're one player in a worldwide market. There is greater reliance on a limited number of active ingredient manufacturers. Those active ingredient manufacturers, many of which are offshore, are dealing with quality control issues as we try to deal with a better regulatory framework so that quality inspections are jointly done with the FDA and with some European countries. As you're looking at South Asian countries and trying to meet those quality requirements, sometimes we see interruptions in the active ingredient piece. That then makes it a problem for the manufacturers to be able to actually make the product and get it into our marketplace.
When there's a worldwide shortage, Canada is a relatively small player in that environment, and you see market forces come into play, which we also see even within the marketplace in Ontario. The business people would say, "Get the supply to where your biggest clients are." In a global marketplace, for example, that would be in some of the European countries and the United States. In an Ontario context, we see it play out in "get it to your big chain retailer," perhaps leaving the community pharmacy a bit at risk.
We're also seeing a change in the nature of the product, so we have more sole-source drugs in the generic world where we have only one manufacturer. When that one manufacturer goes down, we have challenges with there being no alternative available. In those cases, we look to access in the international marketplace, and we work with our partners at Health Canada to try to expedite that.
I would say that the federal government needs some new tools in its tool kit to try to respond to that kind of mass shortage issue. They have programs that are structured around getting a drug for an individual. They really don't have a great way of getting a new person in through a regulatory approval process to know that the drug is safe enough for us to sell in a period of crisis. I know they are working on that, but we need it much more tightly.
The other piece that goes along with that is that when we ask Health Canada to bring us in a new supply of drug, we need to know that we're actually going to use it, and as a public payer we're one step removed from that process. We will pay for it, but we don't purchase or take title to the drug.
I'm close to my seven minutes and I've touched on the big key points. I don't want to go over my time, to leave lots of time for questions and answers. The rest of the slides speak in more detail to those same principles, and those are the key highlights from a health system perspective.
The Chair: Thank you very much. I will now turn to Kathleen Boyle, Vice President, Pharmacy Services for HealthPRO Procurement Services Inc.
Kathleen Boyle, Vice President, Pharmacy Services, HealthPRO Procurement Services Inc.: Good afternoon. Thank you for inviting me to present before the Standing Senate Committee on Social Affairs, Science and Technology on the unintended consequences of the use of pharmaceutical drugs.
At HealthPRO, we know that the well-being of many Canadians is dependent on the ability to access high-quality prescription pharmaceuticals in a timely fashion.
This accessibility was in serious jeopardy when in February 2012, hundreds of medically necessary injectable products went into alarmingly short supply. A drug shortage of this magnitude is perhaps one of the most significant and unforeseen unintended consequences.
Although we are not facing a crisis today, shortages continue to be a daily acute issue, and they are not going away.
Today I will identify three casualties of drug shortages. The first is the patient who must accept less than optimal therapy when the first choice of medication is not available. Even worse is the patient who is faced with the reality that there is no other viable option.
The second casualty is the front-line health care worker who must implement drug conservation strategies to make what they have go further; find an alternate supply, either somewhere within our Canadian borders or even beyond them into the global supply chain; identify sources of alternative treatments, if a supply of that alternate medication is still available; manage the risk to medication safety that a new product introduces into their facility; and above all, face the challenging ethical dilemmas of deciding who gets the last vial and, most importantly, who does not.
The third casualty is our health care system overall. There is no hard data available in Canada to express the impact of drug shortages, but estimates in the United States run as high as $216 million per year.
Since 2012 we have made some progress. HealthPRO implemented split-award contracts for medically necessary drugs, in other words, awarding contracts to more than one supplier to mitigate the impact of shortages. This was an effective strategy, and we now have 23 molecules available to our members through split-award contracts.
We also adjusted our contracts to ensure suppliers who bring an alternate version of a medically necessary drug into Canada have immediate access to a business opportunity. As of today, we are no longer relying on one supplier for six new critical products.
HealthPRO has also represented our members' voices in national forums. We participated actively in the Multi-Stakeholder Steering Committee on Drug Shortages co-chaired by Health Canada and Alberta Health and Wellness, representing the provincial-territorial group, and we contributed to the production of two documents to improve communication and action plans around shortages. The first is the Multi-Stakeholder Toolkit and the second is an integrated response protocol.
I led a group of national stakeholders in preparing a report that outlined contract and procurement best practices. The report identifies contracting practices that can improve the relationship between trading partners to mitigate the impact of drug shortages.
HealthPRO also actively participates on the regular teleconferences of the Provincial/Territorial Drug Shortage Task Team. The PT group holds bimonthly calls to address the most critical problems as they arise across Canada and involves Health Canada where they are needed to resolve these issues.
Through the power of collaboration we have made progress, but there is still much to be done both within Canada and globally. Within Canada, we need to improve the functionality of our national drug shortage reporting system, drugshortages.ca, and suppliers must take action to populate it with timely and complete information well in advance of possible planned and unanticipated shortages.
Within Canada, all stakeholders must increase their safety stock for critical items and increase the visibility of their inventory. We must do more to diversify the number of contracted suppliers, especially for sole source drugs.
From a global perspective, suppliers along the entire supply chain must be encouraged to increase production capacity and inventory capacity. This will allow us to better absorb unexpected disruptions in supply.
Within our terms and conditions, we can oblige global suppliers to notify contractors when problems arise at critical agreed points within their production processes, and in some cases this advance warning can help us prevent shortages and identify root causes. We also need to encourage global suppliers to further diversify their own supply chains to mitigate risk.
When drugs in Canada are in short supply, health care providers need greater flexibility and access to safe drugs in the global market so patients can get treated. When we are facing a shortage, we need a national ethical framework to allocate drugs. This responsibility should not fall on the shoulders of our health care workers.
Ensuring the reliable access to pharmaceuticals in the global and highly complex supply chain is far from being straightforward and will take time to attain. To truly mitigate the consequences of drug shortages, every link, every stakeholder in the supply chain globally and within Canada has a role to play. We have achieved good momentum, but we must not be complacent. We can and must do better for Canadians. But all is not gloom and doom. The positive unintended consequence is that health care workers have been reminded of the great value that pharmaceuticals bring to the health care system and now they take pause when considering therapy. I believe that is resulting in better patient care.
On behalf of our 800 member hospitals, HealthPRO is committed to continuing to put great effort into mitigating the effects of shortages, and we will continue to support every Canadian's right to access critical medication in a reliable and timely fashion.
Thank you for the opportunity to present before you today. I will welcome any questions you have.
The Chair: Thank you. Just before I move on to the next presenter, I would like you to clarify the meaning of "alternate version of a medically necessary drug." I know what an alternate medication is, but I'm not sure I understand what an alternate version of a medically necessary drug is.
Ms. Boyle: A medically necessary drug is used to treat either a disease that is —
The Chair: I understand what a medically necessary drug is, but it's the alternate version of.
Ms. Boyle: An alternate version can be the same molecule made by an alternate supplier or it can be an alternate format. It could be a format that is similar to the original, but can be different. It may have latex in it, or it may have preservatives. It may be a powder format; it may be a ready-to-use format.
The Chair: You are still speaking of the identical chemical entity, which is the drug, and you're referring to formulations that have all been approved by Health Canada.
Ms. Boyle: All of which have been approved, yes.
The Chair: I will turn to Dr. Peter Doig, President, and Dr. Gary MacDonald, President-elect, of the Canadian Dental Association. I understand Dr. Doig will be making the presentation.
Dr. Peter Doig, President, Canadian Dental Association: Thank you, Mr. Chair, and good afternoon honourable senators. It's a pleasure, as the national representatives of Canada's dental profession, to participate in this important process.
There are more than 18,000 practising dentists in Canada. As the primary practitioners in the diagnosis and treatment of oral disease, the prescription practices of dentists involve the treatment of infection, pain control, mild sedation and anxiety control, and for a subset of dentists, deep sedation and general anesthesia. There is virtually no off-label use of pharmaceuticals by dentists except in the treatment of chronic pain and sleep disturbances, a small subspecialty in dentistry.
The Minister of Health in Canada has identified the problems of unintended consequences in the use of prescription pharmaceuticals as an issue. Specifically, the abuse of narcotic prescription drugs used for pain control. This issue is not the result of prescription practices in dentistry alone but is inter-professional.
The specific area of concern identified by the past Minister of Health, the Honourable Leona Aglukkaq, was the abuse of prescription narcotics by First Nations and Inuit in Canada.
I'm sure that your committee is aware that NIHB, the non-insured health branch of FNIHB, the First Nations and Inuit Health Branch, is the payer of pharmaceuticals for this cohort of our society. It is unfortunate that NIHB has placed restrictions on the ability to prescribe alternatives to narcotics. These restrictions, specifically the inability to prescribe the non-steroidal anti-inflammatory drug, or NSAID, Toradol, effectively increases the amount of narcotics prescribed to this population and makes narcotics more available for abuse.
There is a definite concern when payers can restrict prescribing practices based on cost, without responsibility for the consequences.
To help address the abuse of prescription narcotics, the development of a functional electronic health record that would include a prescription history on patients and be accessible by physicians and dentists would help all practitioners identify situations where there is a risk of abuse. Strategies to combat abuse must also involve the education and regulatory arms of all the involved professions.
While dentists use a relatively short list of drugs in everyday practice, it is important to our profession to have timely access to safe and efficacious prescription drugs. Timely access is an issue of particular importance to our profession because of the issue of drug shortages. Most dentists operate in private practice within their communities and cannot reasonably maintain large inventories of pharmaceuticals on site. When shortages occur, the priority for allocation of pharmaceuticals is given to primary care institutions such as hospitals. The effect of this is that certain pharmaceuticals, such as local and general anesthetics, sedatives, antibiotics and other emergency drugs, are effectively unavailable to out-of-hospital venues such as oral care facilities. Unfortunately, this can affect the availability and level of patient care dentists can provide their patients.
The federal and provincial governments, along with industry and health care professionals, all play a vital role in helping to address drug shortages. For its part, Health Canada has responded to shortages by authorizing alternative supplies for a variety of critical drugs. However, third-party policies and the requirement of pharmaceutical manufacturers to generate profits have led to many pharmaceutical suppliers stopping production of these necessary drugs, leaving only a single supply source.
To prevent future shortages, effective systems that work with the pharmaceutical industry to provide advanced warning of expected drug shortages need to be developed.
As the national representatives of our profession, the CDA supports the harmonization of Canadian requirements with international standards for the review process of new drugs, new manufacturing sites and new suppliers. This process could be similar to the development of other international standards through the International Organization for Standardization, or ISO. The CDA is already active in the development of standards in dentistry by hosting the secretariat of ISO/TC 106.
We thank you for your invitation to speak, and we look forward to any questions you may have.
The Chair: Thank you very much. I will turn to David Johnston, who is the President and CEO of the Canadian Association for Pharmacy Distribution Management.
David Johnston, President and CEO, Canadian Association for Pharmacy Distribution Management: Thank you very much. My name is David Johnson, president and CEO of the Canadian Association for Pharmacy Distribution Management, or CAPDM as we are known.
On behalf of the Canadian Association for Pharmacy Distribution Management, I want to thank the members of the Standing Senate Committee on Social Affairs, Science and Technology for the opportunity to outline the role of pharmaceutical wholesalers in respect to drug shortages, an issue that our industry is very concerned about and is working closely to address with other health care organizations in Canada.
First, here is a brief overview of CAPDM so you know how we fit into the health care system generally and the drug shortages situation specifically.
Established in 1964, CAPDM is the voice of the Canadian pharmacy supply chain. Members consist of pharmaceutical wholesalers, self-distributing pharmacy chains, prescription and non-prescription drug manufacturers, both brand and generic, as well as goods and service providers to the pharmacy supply chain sector.
Over 95 per cent of pharmaceuticals across Canada are distributed to community and hospital pharmacies as well as long-term and specialized facilities by pharmaceutical wholesalers and self-distributing chains, with order accuracy greater than 99 per cent.
Distribution of pharmaceutical products by pharmaceutical wholesalers is safe, secure and efficient and is the system of choice for pharmacies and manufacturers. By offering same-day and next-day delivery five days a week to all parts of Canada through thousands of employees working in distribution centres in nearly every province, pharmaceutical wholesalers help to ensure timely patient access to vital pharmaceuticals and over-the-counter medicines.
We are a significant element in the Canadian health care system. CAPDM pharmaceutical wholesalers, working with Health Canada regulators, are proud to be part of a pharmacy supply chain that has come to be admired at home and abroad as one of the safest, securest and most efficient systems in the world.
Within our role, it's very important to understand that pharmaceutical wholesalers do not influence product pricing or product ordering or product availability to patients and the public. We do not cause drug shortages. The role of wholesalers is to obtain available products from pharmaceutical manufacturers and distribute them under highly regulated pricing regimes in a safe, secure, timely and economical manner to pharmacies.
On the surface this may seem like a simple process, but behind the scenes there are highly complex skills and technologies used by wholesalers daily to consolidate shipments from hundreds of manufacturers and deliver them to thousands of pharmacies. This is crucial to sustaining the safety and viability of Canada's pharmaceutical distribution system, which in turn means the viability of the health care system itself. In today's world of growing demands and service levels and shrinking margins, just-in-time storage and delivery is critical to pharmacies, wholesalers and manufacturers alike.
For a wholesaler there is no value in holding onto a product at its distribution centre. Not distributing to a pharmacy means there is not a sale, and, therefore, there is no revenue. In fact, not shipping a product as soon as possible to a pharmacy customer or hospital, or whatever the end point is, can result in a lost customer; that is, if a pharmacy orders from a wholesaler, and that wholesaler cannot fill the order, the pharmacy will order from another wholesaler and may end up using this second wholesaler preferentially.
In times of shortage, pharmaceutical wholesalers will influence the allocation of products as dictated by the manufacturers and sometimes by government bodies. The first filters of product availability in times of shortage are allocations by manufacturers who will direct products through pharmaceutical wholesalers to regions and customers. With their available inventory, pharmaceutical wholesalers will then implement order limits to ensure that as many customers as possible will have access to the product that is experiencing a shortage and that no one region or organization will have a disproportional amount of product.
Pharmacies order products primarily through one pharmaceutical wholesaler, and secondarily through others. In times of product shortage, a pharmaceutical wholesaler, according to its business relations and contracts, will ship products preferentially to its primary customers. It is important to note that every pharmacy is a primary customer to at least one wholesaler. As a result, every pharmacy is able to order from a primary wholesaler and receive preferred distribution.
Since the emergence of the environment of short supply on several products at any given time, wholesalers are discovering even better ways to work with their trading partners to communicate which products are short and which are not. There is still much to be done by all stakeholders, and we look forward to continuing the progress made to date in creating a system to help Canadians better manage their medication needs within shortage situations.
However, it's important to point out that shortages also affect wholesalers directly, not only through the loss of revenue derived from the non-distribution of a shorted product, but through the added complexity of costs associated with managing through the allocation processes described earlier for each affected product. Wholesalers operate in a very low margin business model that calls for the smoothest running and most efficient systems and processes possible. The systems work best when there is consistency and predictability. When there is a drug shortage, the efficiencies are thrown into disarray, which is further complicated when the shorted product becomes available and needs to be managed as a priority.
In summary, during times of drug shortage, pharmaceutical wholesalers will continue their essential role of distributing all available products through the safe, secure and efficient systems they have developed. Pharmaceutical wholesalers do not influence the causes of drug shortages, but they do help to manage the flow of available products in the market during shortages. Thank you very much.
The Chair: Thank you all very much. I will now open the floor up to my colleagues for questions, and I will begin with Senator Eggleton.
Senator Eggleton: Thank you for your input. In addition to that, we had other materials that attempted to describe the causes for the shortages we have, everything from the raw materials issue, which seems to be particularly affecting the generic industry, insufficient domestic manufacturing, sole-source contracts that can create some issues, and perhaps the profit motive. There is not enough profit in some of these drugs, so they cease to manufacture them.
Now, manufacturers are required to report intentional discontinuations to Health Canada, but there is no requirement to report disruptions in production, which also seems to be a major concern.
You've made a few suggestions about things to be done, but I'd like to leap to a suggestion of four different solutions, things that Canada can do that were put into a blog in October of last year by Dr. Jackie Duffin from Queen's University.
She says, first of all, that there needs to be mandatory reporting, that the voluntary system doesn't work well enough, and that mandatory reporting, I believe, is a requirement in the United States.
Second is tracking harm. Death certificates don't allow us to indicate if the illness has been exacerbated by a lack of remedy. They just talk about the cause of death.
Third is demonstrating international leadership and working with other countries, perhaps through the OECD or the WHO, to determine the cause and solve it on a more international basis.
Fourth is by fostering its own industry. With our intellectual and fiscal capital, she says, why do we not start making these missing remedies ourselves?
Those are four suggestions from somebody who spent a bit of time looking at this. What do you think of these four suggestions as being the basis of a solution?
Ms. Boyle: I would be happy to address at least two of them. Around the issue of mandatory reporting, I think the more important issue is that suppliers give us much more advanced warning than what they do.
We have a reporting function now. It works reasonably well, but the information on it is not timely. It's not complete, and although it's supposed to be anticipated shortage, it usually is anticipated within the next couple of days.
Within the global supply chain, the time frame to manufacture and produce drugs is three to four months, and I don't think it's unreasonable for us to expect suppliers to give us that kind of notification. I do understand that some of the information is proprietary, but I think we need to find a way to get the information where things go wrong with a supplier's production problems far enough in advance, whether it's through the contracting process or through another process, that we have enough warning so that the other people in the supply chain can activate their contingency plans and put them into place. We could considerably reduce the impact on the patient through that.
I think advance warning is a greater issue than the mandatory warning.
As far as solving the problems internationally, I couldn't agree more that we do need to get to the root cause of drug shortages. Certainly, identified in the literature, the greatest causes are production quality problems and capacity problems in the supply chain. Unfortunately, they seem to be beyond the scope of things that some of us can do here in Canada.
I did meet with the international pharmaceutical conference last June in Canada, and what we are going through is exactly the same as what people are going through in the other countries. Twelve other countries were represented, and our differences were very minor. We are coming together to try to escalate it, and the report that came out of the committee did go to the World Health Organization.
Ms. McArthur: I would echo Ms. Boyle's comments on advance notice being more important than mandatory reporting, but mandatory is a component of that. But the further in advance we know, the better the health systems and the health providers can plan.
Tracking harm is one for a retrospective. I don't know that it helps you in advance to be better prepared. It lets you know what the consequences are, and it is important, from a patient perspective, that we understand how patients and health systems have been impacted by those decisions.
Fostering our own industry is an ideal goal. I don't know how realistic it is to have our own domestic production across all products.
What we do need to have are stronger partnerships and stronger requirements about maintaining an adequate supply within the country, should there be some sort of an issue elsewhere in the manufacturing process, and that's something that certainly has been built into a lot of the procurement contracts, which works in a segment of society. It does not work for right now as to how we are paying for drugs through public drug programs or private insurance, which is more on just as the market flows. I think that is certainly a piece we should be working on with the regulator about what's the requirement of supply to be maintained within the country.
Dr. Doig: I think the suggestion of taking the discussion to an international advocacy level is very important. In 2013, at the FDI, which is the World Dental Congress meeting in Hong Kong, the Canadian Dental Association brought up the issue of drug shortages at the open forum and the congress and got a commitment from the FDI to raise the issue directly with the WHO and to explain the impact of drug shortages on the dental community and its impact on our patients. So I think advocacy at the international level to foster the discussion is extremely important.
Senator Eggleton: If you're finished, let me come back to this mandatory thing.
They do it in the U.S., don't they? Why wouldn't we do it here? Even those of you who said, well, advance warning is more important than making it mandatory, you're telling me that the system isn't working on a voluntary basis. That's what I'm hearing. So why wouldn't we make it mandatory as in the U.S. and other places, I believe?
Mr. Johnston: When you look at reporting, you also have to look at what type of reporting because, remember, there can be multiple reasons for a drug shortage in the supply issue of the manufacturing and delivery of the product.
Ms. Boyle mentioned that the life cycle to make a product is two to three months, so if you knew it wasn't going to work, you could give us that two to three month warning. That would be true if the shortage happened because the active ingredient wasn't available or the factory wasn't able to produce it. But what, for example, if it was a cold chain product, and, farther down the line, the cold chain system breaks down and the drugs become unavailable, just as one example?
So in the continuum of "let's start to make this product" to "let's deliver it into the pharmacy," there are multiple reasons why you could not have the product available. You have to be careful about looking for that magic bullet reporting. I think reporting is starting to come in Canada. With Health Canada, the industry is building a website as organizations are starting to report on that. It's one of those things you have to watch.
Also, don't forget that sometimes drug shortages are because of increased demand. It's not always because of a decrease in supply. There are two sides to the equation, and you particularly look at that inside of things such as the flu vaccines in the fall period, that type of product.
Government jurisdictions and Canada as a whole are making a guesstimate as a purchaser of product and allocating that to the various provinces, but in the end, if there is a push on the flu, or if it becomes very popular in the press and everybody thinks it's time to go get their flu shot, demand will also cause a shortage.
Also, don't forget that in cold chain products, it depends on how it's distributed. Once a cold chain product is out of the distribution system — for example, in a pharmacy — it can't move around between pharmacies. So if you allocate product to some region of the province that doesn't have the same demand for something like a vaccine, and another province or area does have it, but you've already allocated it, you can't move it across. It's a compromise of the product.
For example, a cold chain product that is distributed by a pharmaceutical wholesaler, from the moment the wholesaler takes title of that product, there is a temperature mapping that follows in every warehouse, in every truck, in every box that it's contained in, and there's a full printout of exactly what band of temperature it was held at. Once it leaves the distribution system, with the best of intentions, it's no longer tracked, so now something like a cold chain product can be compromised very quickly.
There are many reasons for a shortage, and it's not always supply.
Senator Eaton: Thank you all. It's riveting.
You refer to active ingredients. Is there one country that controls most of the active ingredients, or are they kind of made a little everywhere?
Ms. McArthur: I think I was the one who mentioned the active ingredient. We've been seeing a bit of an evolution in where active ingredients are being manufactured. It used to be that they were in the countries that were manufacturing the drug products. We have very little active ingredient manufacturing in Canada. We are seeing a prevalence of a shift towards some of the developing countries — Southeast Asia primarily, and some of the Eastern European countries.
Senator Eaton: Are these active ingredients rare?
Ms. McArthur: They're chemicals. Historically, they're chemicals. However, the nature of drug products is changing quite a bit as well. We tend to think of shortages as happening in generic medications. There are lots of competitors, very low price points. They're all driving to where the most economical place to manufacture a drug is.
We did see massive shortages in a drug product for a rare disease not that long ago, and that's because the type of drug that was being manufactured was now a biologic. It's actually manufactured not out of a chemical but plant-based. The starter — I like to think of it as like when you're making yeast. The mother for the manufacturing got contaminated, and so then that whole line of drug was unavailable. It took the company many years to come back. We were lucky we had an alternative.
Senator Eaton: Just to pick up on something you said, there was a shortage of drugs. We've all lived through — in Toronto, anyway — the crisis of SARS and others, such as H1N1. What if something like that happened? What if next winter there was a pandemic? Do we have a plan in place that if there's a pandemic, say, in Toronto or downtown Vancouver, the hospitals get first allocation? Do we have any kind of emergency plan?
Ms. McArthur: I can speak for the province of Ontario. Ever since SARS, we have worked and maintained a pandemic plan, and every year it gets better.
Senator Eaton: That includes drugs?
Ms. McArthur: It's hard to predict, though, what the drug issue will be. When we went through the Sandoz shortage, where we lost a wide number of drugs that are used primarily in hospitals, and it went across the country, we developed an ethical framework that helped us guide the hospital system and the health care system as to the best way to allocate the limited amount of product we had.
So what were the first priorities? The life, limb and organ-threatening kinds of things go to the top of the list — making sure you had the drugs to deal with the open-heart surgery that had to happen versus the elective surgeries that could wait. There was a whole process.
Then how would you reallocate within your hospital, across hospitals within your region and across regions? How would you cooperate to make sure you were making the best use of what limited resource you had?
The pharmacies were phenomenal in working together to develop common understandings of which drugs could be used as alternatives to others. Most drugs have an alternative. It may not be as good. It may have to be taken in a different way or it may be more expensive to administer, but there are other ways of managing the illness.
That's one of those pieces that, through the pan-Canadian effort, we've been working on making stronger — a tool kit for people working in the health system: When you face these shortages, how do you manage your way through them — so that we're being as consistent as possible, because that's in the best interests of patients. That's where we're all thinking the bottom line is: How do we keep those patients' health optimized?
Senator Eaton: I would like each one of you to answer: On a scale of 1 to 10, how serious is the drug shortage? Is it 5? Are we at a crisis point at 8.5? Is it just on the horizon?
Ms. Boyle: Maybe the best context I could use is that we have, under our contract portfolio — so that's not every drug that's in the country; that's only what we touch under our contract portfolio. In 2013, 47 per cent of our line items were touched by a drug shortage in some way. That's a lot of line items. That's almost 2,000 line items. Some were quite serious and some are easily handled locally, but you never know which.
Senator Eaton: Forty-seven per cent?
Ms. Boyle: Forty-seven per cent of our line items under contract were touched.
The Chair: Let's get the response.
Ms. McArthur: I would be hard pressed to put a number on it, because it is so dependent on what drug you're talking about, whether or not the shortage is a life-threatening impact. To me, that's 10.
Overall across the system, we're living with drug shortages. We're living with them probably more than we used to. If you were to say that 10 years ago we were sitting at a 1, I would say we're probably sitting at about a 3 or 4, because we have a multitude of products available; there are alternatives. We are managing through shortages every day, but any one of those shortages could instantly become a 10.
Mr. Johnston: Part of the answer is that what a shortage is is not overly well defined. If you go to your pharmacy and you want a product, and they say, "It's Tuesday. We don't have it, but I'll have it by Friday," is that a shortage?
Senator Eaton: Well, if you're sick it is.
Mr. Johnston: Exactly, if you're dealing with a critical illness.
Senator Eaton: Or infection or pneumonia.
Mr. Johnston: Absolutely. But if you're dealing with something else — and I'm not belittling that, but I'm saying: Is that a shortage?
It's like everything else. If you want Canada to never, ever have any drug ever shorted, that would be impossible. You have to make compromises on making that decision. So what is the shortage?
The other question is that if a drug is short — and, as Ms. Boyle says, 47 per cent of our products have been touched by it — is it shorted with no alternative? So a drug is shorted, but is there an alternative? Then it's a question of managing that, and that's where the health care professional comes in and manages that.
Was the patient adversely affected? They came in on a Tuesday and their drug wasn't ready, but the pharmacist was able to say, "Product B will work for you as well," and in consulting with the physician, they agree that that's a good product to give.
So, again, was it a shortage without an alternative? You have to work your way through it.
I think shortages are an increasing issue, and certainly from the distributor point of view, it is occupying an incredible amount of their time as they try to figure out what drugs are available. Because what the pharmacist is doing, the pharmaceutical wholesalers are doing exactly the same thing: trying to figure out with their customer, who has ordered 100 doses of X and that's not available, whether they can send 100 doses of Y instead. They also have the medical tree that says this is an acceptable alternative, but they have to go back to the customer.
It's happening at all different levels when it comes through. It's quite a complicated world. Is it more than it used to be? Yes.
Senator Eaton: Would you put it at a 3 or a 4?
Mr. Johnston: It's different. Here I'm going to be quite ambivalent. There are more shortages, but we're also managing them much better. Would it be better and more economical if we didn't have as many shortages? Absolutely. The system is getting pretty good at managing it, but every once in a while it comes up to a wall that they can't manage around.
The Chair: Dr. Doig, from the Canadian Dental Association's point of view, what is the nature of it? It's increasing, and can you give it a number out of 10?
Dr. Doig: When you look at the practice of clinical dentistry, two different cohorts of our members get affected in different ways by drug shortages. One is the general practitioners who deliver the vast majority of general dental care to the population of Canada. I would say the impact of the drug shortages over the last few years have been relatively minor to that group, so I would put their concern at about a level 2.
There are subsets within that group that do a lot of practice with IV sedation and anxiety control that have been affected more by the drug shortage.
Then you have the other class of dentists, which are the oral and maxillofacial surgeons. That group has been, at times, affected a great deal by the shortage of drugs.
As I'm sure you're aware, most oral and maxillofacial surgery is done in non-hospital surgical settings. And when there is a drug shortage it becomes acute in those non-hospital settings. Some practice is done in the hospital settings, and of course there is a great impact there.
In terms of the GPs, I would say probably a level 2. For the oral and maxillofacial surgeons, it would be a level of concern that would be in the 6 to 7 range.
The Chair: Thank you very much.
Senator Seidman: I would like to ask you about drugshortages.ca, which I think all of you have made mention of. It was in September 2013 that the Minister of Health announced the website. The purpose is for manufacturers to be able to post all drug shortages, anticipated or actual.
I think HealthPRO and the Canadian Association for Pharmacy Distribution Management were part of the original multi-stakeholder steering committee that developed or helped develop the website. During the development of the website, did the steering committee consider how to measure the success of the website? Do you have any data to indicate that drug shortages have been avoided as a result of the reporting system?
Ms. Boyle: Although as a member of the Multi-Stakeholder Committee on Drug Shortages, I wasn't actually involved in the drugshortages.ca development, I did put in a proposal for it. At HealthPRO we internally had been running our own drug shortages website since about 2002.
There are things about it that could be better. It could be a little more functional and a little easier to search. I do know at the original proposal the tracking of who was presenting on it and who was putting their information on it was going to be a key feature of it. I can't tell you exactly that it's being done, but I'm pretty sure it's being done, because I have been advised that it is being monitored, that it will be monitored and that compliance to putting information on that website will be monitored.
As to whether it has avoided a drug shortage, notification is not prevention. Notification helps mitigate and helps health care providers determine what work they need to do to manage the drug shortages. When we talk about drug shortages — and, yes, our health care providers manage it — the unfortunate thing is they're spending all their days managing shortages and they should be managing patient care. That's one of the issues.
Mr. Johnston: CAPDM was very much a part of the building of that opportunity in response to the need to have better communication about drug shortages.
I might add that in the pharmacists' capacity in hospitals, when they're looking to find out if a drug is being shorted or whatever, they actually call the wholesaler first. They're the ones that have probably the most up-to-date data, because they know what's on their shelves and what they're able to ship. Pharmacists actually come to the distributors and wholesalers first, as a general practice. However, the website is very important because they can look into the future.
I might add that the distributors look to that website as well for that information, because we don't have any more advanced warning than anyone else. The distributors only have the information that there's a drug shortage when they place an order and it doesn't show. We're very much in the same boat, just farther up the stream, if you will.
As far as how that site is functioning, I agree with Ms. Boyle that it will have nothing to do with preventing a drug shortage. All it does is report whether the products are available, what's available and whether there's going to be a shortage. As far as whether the companies are reporting, the database is there. But you would have to go into each of the individual companies to know at what point they are informing the website.
Senator Seidman: The website was meant, if I understand it, to post drug shortages, anticipated or actual, at the earliest possible date by the manufacturer, to provide available information on alternatives and to communicate the anticipated duration of the shortage.
Do you know if there is satisfaction from the health professionals? Perhaps Dr. Doig would know that. Is there any satisfaction from health professionals regarding suggestions for drug alternatives, for example?
Dr. Doig: The feedback I have gotten from the cohort, oral and maxillofacial surgeons, is that their satisfaction level with drug shortages has gone up. It has improved a little bit over the last while. They are still extremely concerned about the potential for future shortages.
Senator Seidman: Is there more of a shortage of generics, for example, than there is of brand name pharmaceuticals?
Dr. Doig: I believe so.
Senator Seidman: There is?
Dr. Doig: Yes.
Senator Seidman: If I could try to pursue this a bit, because I think the concept of an advanced warning system, which you've all mentioned, is related to tracking, monitoring and the concept of reporting potential shortages. I note that health professionals have stated that there is no formal mechanism by which they can be kept informed or are kept informed of an actual or anticipated drug shortage.
From your point of view, what do you see as the best type of mechanism that would be most useful for health professionals so that they could be alerted in a more timely fashion?
Ms. McArthur: I think one of the problems is that that website is a passive website. So it requires the health professional to go to the website to check, as opposed to a push notification, which is I think where we were all hoping this would go. There would be mandatory advanced notification that a shortage was coming — there has been some kind of a plant malfunction. It's got to be on a large scale. We're not talking about one shipment cold chain problem. We're talking about the whole supply going down. The notification would get pushed out. That requires a centralized resource. I think it requires federal government leadership to actively maintain that, requiring it and then communicating it.
We often hear about drug shortages from our pharmacies. We don't hear about it in advance from the manufacturers or the distributors, so we hear from the retail end that there's a shortage. Then we start digging back into how real is this shortage issue and who is connected to whom.
One of the challenges with that approach to hearing about things is that our health care system is really good at working collaboratively together when somebody has a shortage. They actually do move product around, in a very safe way, or they start to redirect themselves. Particularly in the hospital system they are very cooperative with each other. At the retail system you will see pharmacies in a community move product between the pharmacies. They will manage a local shortage for a while.
It's interesting that when you compare Canada to the United States we have a much stronger management system here in the practice. The health care professionals are taking care of the system because the system can't take care of itself.
Ms. Boyle: I would say we're in a very early phase in developing how we can really establish an appropriate notification pattern. In the United States, the suppliers are obliged to tell the FDA if they have a known disruption in supply. At that time the FDA will do an assessment of the inventory, at which time they will post it on their website. There are two websites, actually, in the United States.
In Canada at this point, we are looking to establish within our contract model an incentive to encourage suppliers to give us that kind of notification earlier on. But that kind of contracting probably isn't going to come into place for another couple of years; we noted that in the best practices contracting model that we put there. It's going to take time to do that.
There is a whole issue of proprietary information, so suppliers are quite reluctant to give out too much information to the broader public. The other issue is that if you give out the information to the broader public, unless you have a very good, well-planned allocation system in place, you're going to cause drug shortages, or you will create rumours and drugs will end up in the wrong place anyway.
It is something we are starting on. I do think there is a role for government in this. There already is a good relationship between Health Canada and suppliers in discussions and notification. There is quite a bit of work yet to do on that, but it is a critical piece, if we are really going to stop drug shortages higher up in the supply chain and not let them get down to the front line where it's happening today.
Senator Seidman: As recently as this morning, there was a press release entitled "Ritalin shortage prompts call for Health Canada changes." It was the Quebec Order of Pharmacists who say they were left in the dark about a drug shortage. They say that it could have been reduced if Health Canada had taken a tougher stance on pharmaceutical companies. I don't know how you see that feeding into — you were touching on that; you say there is a role for the federal regulators, legislation, Health Canada or something here.
Ms. Boyle: This is where it's a difficult situation. If it's your child who needs the Ritalin, then it's a crisis for you, and it's very difficult to play that role. I didn't read the press release, so I'm not really sure of that situation.
Certainly, we see all the time that the medications for epilepsy are shorted. Although we are in hospital and don't necessarily deal with a lot of that, we certainly see any drugs that are used to treat epilepsy as critical drugs.
We are again in the process of trying to identify and share with each other. When I talk about collaboration and transparency, we need to tell suppliers which ones we really want to do, which ones we can deal with, and which ones we really need your help on. We're still in very early stages.
I'm betwixt and between when it comes to regulatory management of the issue, because the minute you put rules in place, some people go around the rules. We would be much better off if we could get to a more collaborative stage. It would be better for us all if we did not have shortages.
Suppliers want to sell their product, wholesalers want to sell their product, hospitals want to have the product, and retail pharmacies want to have the product. If we can voluntarily step up to the plate, we will get there sooner than forcing people to do something that they could maybe easily get around.
Senator Cordy: This is a follow-up to that question. You said earlier that 47 per cent of line item drugs are touched by shortages. Ms. Boyle, you also said — and Ms. McArthur touched on it — a national ethical framework to allocate drugs, because I wouldn't want to be the person making the decision on who gets the drug and who doesn't.
Ms. McArthur, you did not say "national," but I think you did say an ethical framework. How would you go about developing this framework? Would it be each time there's a shortage? Because if 47 per cent are touched by shortages all the time, how would it be a framework that would be loose enough to be national but at the same time hold up for whatever the shortage happened to be? Also, who would be part of developing this ethical strategy?
Ms. Boyle: I will start, but I think Ms. McArthur would be better to finish on this one. I know B.C. also developed an ethical framework during the Sandoz crisis as well. So now two provinces in Canada each have an ethical framework. If you're within that province, you're really good.
The problem is — and this is the issue the people I talked to are dealing with — if you have an ethical framework and you've gone through all the responsible things on conserving the drug and you are making all the right decisions, but the province next door to you has a shortage and they haven't done much of anything, or they don't have the ethical framework, then they have done a very good job — they trade drugs all the time and they move them around. Sometimes, they move them around when they don't have a cold chain because they are not distributors, but the patient needs it, so they step up and do these things.
We need a national ethical framework so that things can move between provinces in this nation of ours, and so that we can move things from one coast to the other coast or from the North to the South if it's required, and we can all do it with a level of comfort that it's being done under the same rules.
Ms. McArthur: I would say that we are pretty close to a national ethical framework. Because Sandoz happened and B.C. and Ontario responded quickly, we both now have centres for ethics in health. We worked very closely with our centre, and we had an ethicist help us develop pillars under which the health system could make decisions. It was a guide for the health system. It's remarkably similar to what is in British Columbia, and we shared that with our provincial colleagues, as we all came together to manage the impact of Sandoz, because it hit us all at the same time.
While we are all multiple health care systems, there are some things in this country that help us with a neighbouring province having a shortage when you don't, which periodically happens. We have a strong distributor system that is well connected, and we are dealing with national retail chains as well. Those two pieces on the retail side work together.
When we have hospital to hospital, even then, when you're looking at border communities, they are quite close to each other; the hospitals that are in northwestern Ontario are very closely linked with the ones in Manitoba. And many patients go to Manitoba from northwestern Ontario for care, because it is closer.
There is a culture of sharing. Could it be strengthened by more of a pan-Canadian health care system or a national pharmaceuticals strategy? Absolutely. Those things would give us more power, both domestically and internationally. But we overcome some of the challenges and take advantage of the strengths that comes from having different health care systems as well.
Senator Cordy: So we're moving in that direction is what you're saying. This committee has talked about a national pharmaceuticals strategy in the past. Thank you for that.
Dr. Doig, you rightfully said that the federal and provincial governments and Health Canada have a role in looking at shortages. But you also said third-party policies and the requirement of pharmaceutical manufacturers to generate profits have led many pharmaceutical suppliers to stop production of these necessary drugs, leaving only a single supply source, and one might guess that would be more expensive, since you said earlier that it's very often the generic drugs that experience shortages. I wonder if you would expand on that.
Dr. Doig: When we refer to "third parties," we include the government as a third party. Some of the policies of single sourcing for some pharmaceuticals make the production of certain pharmaceuticals unprofitable for pharmaceutical chains and manufacturers that are not the source of the primary supply. So the tendency will be for them to withdraw from the production of those drugs, leaving only that single supplier. If that single supplier has an issue that causes a drug shortage, we do not have an alternate supply source.
One of the dangers that a third party — being government — can get into is when they start single sourcing pharmaceuticals and they create potential areas that can be shorted.
Senator Cordy: We have seen that in the past with single sourcing.
Dr. Doig: Yes, we have. In the United States, in the recent past, there have been suggestions of massive single sourcing of pharmaceuticals, which would exacerbate, make that problem far worse.
Ms. McArthur: The Government of Ontario has barely touched its toe in the water of tendering. Certainly the historical approach to tendering, and that's what I think Dr. Doig is talking about, has always been drive to best price. The United States, absolutely, saw some manufacturers move out, big hospitals and HMOs drove to best price. This is the thing I think the whole world is tendering in a variety of different sectors, not just health care. You have a price quality, stability of supply, guarantee of supply, those things are critical elements of any good tender going forward, and that's the tendering framework that HealthPRO and Ms. Boyle were talking about. Certainly as we've been thinking about whether we would get into more tendering, there is a balance here.
You will guarantee supply so you guarantee stability for the two or three companies that come out the other side. That will guarantee that they stay in the business longer.
There is a natural attrition that happens in drug products. As you get down to fewer patients on a product, at some point the manufacturer will say there is not an economic structure anywhere that will make it profitable for me to make that drug. That's where we have to be prepared in advance, when someone is going to stop supply thoughtfully. You would be surprised at how few times we know in advance that a manufacturer is making that decision. That's another element that we need to bring into the whole pharmaceutical landscape.
Senator Cordy: Ms. McArthur, you also said the feds need more tools to solve the shortages — I am not sure if it will ever be solved — to help alleviate it.
Ms. McArthur: Greater partnerships internationally. We need to have more of a thought around how to use a national stockpile, requirements when a drug is coming through for regulatory approval and about their ability to supply. If they're going to ask to be sold in Canada, they should be able to demonstrate that they will maintain a supply in Canada to meet the market need. They need tools to expedite reviews when we get into shortage situations, ways that they can quickly assess a drug to bring it in for sale when it's already got an NOC. Right now there are drug products for sale in Canada and Europe and they have slightly different formulations, different packaging. There will be a different shape or colour in Europe than in Canada. If we ran out of supply in Canada, we would have difficulty bringing that in even though it's virtually the identical drug. It has been reviewed by a body that we agree has equal standards to us, and yet the rules and regulations prevent a quick importation of that product.
It also prevents our generic manufacturers, who are getting down to those smaller volumes and want to globalize their production, to seamlessly use that as a production source for supply.
[Translation]
Senator Chaput: My first questions are for Ms. Boyle. My understanding is that HealthPRO is a group purchasing organization that negotiates bulk purchases for clients in Canada.
You mentioned that your 800 members are hospitals. Do you sell to any organizations other than hospitals? And do you purchase only drugs that you sell to hospitals or do you provide other services as well?
[English]
Ms. Boyle: Thank you very much. Yes, for the 800 hospitals that we have, we only sell into the hospital market at this point. That is in most provinces in Canada, but only to the hospital market. That's the mandate we have. We don't sell into the retail trade as is the custom, but if there is a problem in the retail sector or the community sector and there is a shortage, the retail and the hospital sort it out between them. It's much easier to transfer the drug, if needed, to the community than have the patient come into the hospital for the treatment, so there is a lot of collaboration locally around drug shortages.
Senator Chaput: Do you offer services?
Ms. Boyle: No, we don't technically. We call ourselves a full-service GPO — group purchasing organization — and we don't just do group purchasing and leave it at that. We have had a website for our members for drug shortages. We have a service in the way that when there is a shortage, and under the penalty of the contract, the supplier must pay the difference. If the hospital has to purchase that product somewhere else, the supplier needs to pay a penalty on that. We offer a service to our hospitals that we can collect that money for them and manage that financial transaction for them.
We haven't done a compounding service. Basically we look at where our members need support within the pharmacy supply chain, and if there is anything we can do to help them then we offer that, but it's not a service for fee; it's part of their membership.
[Translation]
Senator Chaput: How many drugs do you buy and how do you select them? Do the hospitals tell you what they need? How do you then sell the drugs to the hospitals?
[English]
Ms. Boyle: We have 5,700 line items on our database. We have a number of them that we have been unable to get contracts for and some of them are for supplies, like vials, bags, oral syringes or things hospitals would buy. It's not entirely pharmaceuticals. For the pharmaceuticals on contract — when I talked about the 47 per cent — that was around 3,700 pharmaceuticals we have under contract. How do we make the choice? The choice is governed by business rules of competitive bidding. We also comply with procurement directives that exist in the provinces. Ontario has broader public sector procurement practices; there is the Agreement on Internal Trade at a national level; and the Western provinces also have a set of procurement directives to which we all comply.
When we go to the markets, as a result of those processes, we must indicate to the supplier what things are important to us and how we are going to judge their proposals. So we will go out with an RFP to the marketplace, and for HealthPRO and our last round of contracts, price was actually only worth 33 per cent. Product quality, which is directly related to patient safety, was at 37 per cent. We had vendor quality management, the way the vendor performs, at 15 per cent. Then in September 2011, we introduced a new section called assurance of supply. We were measuring supplier performance directly around their ability to deal with and manage drug shortages. In the end, of all the hundred points that a supplier could get under the procurement process, 12 per cent were directly related to their absolute drug shortage practice and performance.
When we award contract, we assess the packaging and labelling to the standards we have. We assess their financial proposal. We assess their assurance of supply and how they have served their fill rates, and we score the proposal of each supplier according to the way we have said we were going to. The supplier who has the highest score at the end of the day is the supplier who wins the business.
We do always say that if there is an issue for patient safety or for occupational health and safety, it is an exception, and under the broader public sector rules we are allowed to have them, but those are very rare indeed.
Senator Chaput: Are you a not-for-profit organization?
Ms. Boyle: We are a not-for-profit organization based on a cooperative model.
Senator Chaput: Oh, I see.
Ms. Boyle: Whatever revenue comes into our organization gets dividended back to our membership. It's a patronage dividend, so according to their participation, the money goes back to our member organizations.
Senator Chaput: Your membership being the hospitals; right?
Ms. Boyle: Membership is hospitals.
Senator Chaput: It can be all hospitals. Do you pick and choose hospitals?
Ms. Boyle: We would love to have every hospital in Canada as a member. I am going to just clarify. Certainly in Ontario we have a couple of children's centres; so they're not specifically hospitals, but they are still in the public sector.
Senator Chaput: No senior centres or senior homes?
Ms. Boyle: Senior centres are organized quite differently in most provinces; much of it is in the private sector and supplied through the provincial organizations. In some provinces the organizational structure is a little bit different and the line of demarcation between senior centres in the community and hospitals is a little bit blurred.
Senator Chaput: That's fascinating. If I may ask, what would be the total budget in a year?
Ms. Boyle: The total contract?
Senator Chaput: Approximately, yes.
Ms. Boyle: The contract value that we have under management I believe is around $800 million.
Senator Chaput: How many staff do you have, approximately?
Ms. Boyle: Eleven in my pharmacy services, and that includes staff that are serving in B.C. I have a staff in Alberta that gives service to the local provincial membership there. They also make a contribution into the head office.
Senator Enverga: Thank you for the presentations. It looks like we're bound to have shortages in some pharmaceuticals, and my question is about managing shortages. How would we compare with other countries? I know that we're better than the U.S., but how about the other European countries, or maybe Australia? How would we compare with our managing shortages processes?
Mr. Johnston: Perhaps I can talk about that. When it comes to the distribution of the products, when they're shorted, or even before they're shorted, and this is where I get to blow a little trumpet here, the system in Canada is globally recognized as one of the very best because it is safe, secure and efficient. It compares favourably to the United States, to Europe and to other areas. We actually have a gold standard as far as distribution of product is concerned. As I mentioned, in Canada greater than 95 per cent of all pharmaceutical products come through a distributor. They are distributed with greater than 99 per cent accuracy. And if you go back through the history of distribution through pharmaceutical distributors, we can't find an example of a compromised product going through the system.
Whenever you read or hear about someone who got a bad product or a placebo or something like that, it's usually because they've gone outside of the system, and they bought it on the Internet or down on a beach in the Caribbean or something like that. If they stay within the Canadian system, it's a safe, secure and efficient system.
Take that as the backdrop, and then the distributors themselves work very much in partnership with both the manufacturers and government jurisdictions to define how the products are distributed in times of shortage, and they also have their own filter system inside of it that disallows an organization to over-order compared to their regular pattern, so that no one organization or location can hoard a product, if you will.
Senator Enverga: Well, it looks like we are getting the best. From what I heard, we get the best, but I don't think it's 100 per cent yet.
Are there any obstacles that you've been getting so we can reduce it further?
Mr. Johnston: The main obstacle is if the product is unavailable. That's the core of the shortage. Once there is no shortage, or it needs to be managed, the management is very strong, and I think that everyone here has been talking about that, how health care workers and private industry all do come together to manage a shortage. The weakness is if the product is not available.
Senator Enverga: Let's say the product is unavailable, is there another way you deal with it? Is there a better way?
Mr. Johnston: I think that there are decision trees whereby if a product is not available, the medical professionals say, "Fine, is there an alternative medical therapy that can be put in place to replace that?" So you start going through those kinds of decision trees.
If the product is the type of product that can be moved around, and if there is a shortage in one part of the country but not another, as Ms. McArthur mentioned, that is where distributors actually do come to the fore.
Remember as well that from the distribution point of view, for the distribution of pharmaceutical products, all the locations, be they hospitals, long-term care facilities or pharmacies, if they place an order in the morning, and the product is available, for 50 to 60 per cent of all those locations in Canada, they will have it on the shelves in the afternoon. For 100 per cent of those locations, if they place the order in the morning, it will be on their shelves the next morning. So there is that type of rapidity and accuracy of distribution.
For that reason, a pharmacy or hospital has no reason to maintain huge inventories if the product is in the system. So for that reason, if there is a shortage in one part of the country, because the distributors have the product to move around, they're able to move it from one area to another because people should be ordering as they need it.
The Chair: Don't elaborate further, unless you have got a different point to make, because you've all made points with regard to how you deal with the distribution. If this is a separate point, okay; but if not, I need to move on.
Ms. McArthur: The point I was going to make is what happens in a time of shortage, how do you manage more efficiently? You need one strong, central voice. If it is a national shortage, you need one strong, central point.
The federal government is in a naturally poised place to step up and seize that leadership role. That is really critical. Otherwise, we will all be working at cross purposes.
Senator Enverga: This is in regard to the distribution of services or shortages. Since we're talking about Canada here, how about the First Nations communities? Do you have any special plan for those communities? First Nations, as in Inuit communities, is there any plan for those things?
Ms. Boyle: I can speak to that. I know the First Nations are represented on the provincial-territorial teleconferences that we have on a bimonthly basis, so they are involved.
Senator Seth: Thank you for your presentations.
I think I am coming to the same question again but in a different fashion. The shortages of drugs in Canada — why are we the highest compared to the U.S., Europe and all that? Even though the consumption of the drugs is less here compared to these places, demand is less here.
Is that because the food and drug administration is very strict here? Ms. Boyle has said that because importation of the drug is not easy, it takes a longer time because of the rules and regulations. Mr. Johnston mentioned about the cold chain. Is it a causative factor, delays, or because the cold chain, I understand when it goes bad in storage, it cannot be used. So why is the shortage situation more here? How are we going to improve it? Even though it's a small country to compare to others, the U.S.A. and Europe and all, and yet we face this. Why is that so?
Ms. Boyle: I think the biggest impact Canada had that was not in other countries was the Sandoz incident where the plant was put on remediation and went down to 60 per cent capacity; and there were a lot of Sandoz customers in Canada. Although the Sandoz plant does ship product to other countries, most of its business was shipped to Canada, so that crisis was particularly Canadian, one that other people didn't necessarily go through.
Most of the other shortages we are seeing are global shortages, so it is a shortage that everyone is experiencing.
Many of the sterile manufacturing plants that are in trouble today and are on restricted capacity are in the U.S. and do ship a lot of their products to Canada. We are directly hit by our own industry and then as a by-product of what's happening in the U.S., so we're getting it both ways.
Ms. McArthur: I want to comment on the Sandoz piece, because that was a planned decision by the manufacturer. Anecdotally, we were told that that planned decision was not made domestically. It was made in another jurisdiction because they're not Canadian-owned; they're owned by a European pharmaceutical company. It did not take into consideration, necessarily, the Canadian marketplace and giving us the kind of advanced notice that would have allowed the system to build up supply and then manage through a reduction as they retooled for quality.
There is another piece that plays into this shortage. There is growing, and rightly so, attention paid to quality control. The FDA in the United States has gone on an escalating trajectory of quality control, and by and large that's a good thing. But there is a question we need to ask ourselves: At what point do we have too-strict quality control? Where is the balance of the cost and quality risk of a shortage in the name of better purity in the longer term, and how do we balance off those risks? And that is the advanced planning and notification that I think all corporations owe Canadians when they're making these kinds of decisions.
Senator Seth: I wanted to ask about the cold chain.
Mr. Johnston: The cold chain will be the same in every country.
Senator Seth: Does it happen more often here?
Mr. Johnston: If there is a shortage in cold chain, it would be for the same reasons there are shortages in other parts of the globe. The fact that a product is restricted by its needs in cold chain would be the same here as in the United States, as in Europe and anywhere else. I don't think that would be an issue specific to Canada.
The Chair: Dr. Doig, in your submission, you had a very interesting and important observation, among all the important observations you all made.
With regard to the NSAID issue and the fact that the NSAIDs aren't on the formulary of the NIHB with regard to mitigating pain, presumably, or discomfort in these areas, you implied there are many circumstances where you feel they would be a good replacement or alternative to those medications that are on the formulary. Why are they not recognized on the formulary?
Dr. Doig: The NSAID Toradol is a special case. NSAIDs are a class of drugs that have two functions. They both are anti-inflammatory and have pain killing properties. Many NSAIDs are on the market, and they have different levels of efficacy and different effects along that range of pain and inflammation.
They all work basically in the same way, by blocking an enzymatic function in the prostaglandin and cascade, so they are peripheral, not central, in their action. They actually stop the perception of pain, whereas a narcotic is centrally actioned, and basically blocks the reception of the sensation.
About 20-some years ago, a recommendation came from Health Canada to ask dentists to restrict the prescribing of codeine-containing drugs to people on First Nations and use alternate medications when possible. This is about the time that Toradol came on the market.
Toradol is a very effective drug. If it is used properly, it is probably a much better painkiller than codeine, which, of course, is the number one abused drug in those First Nations communities.
Shortly after the drug was introduced, it was removed from the NIHB formulary and the reason we were given was cost. At the time, a tablet of Toradol cost about eight times what a codeine tablet cost. The drug has not been put back on the formulary, which leaves practising dentists who deal a lot with surgical discomfort in the unfortunate circumstance of not being able to use a non-narcotic that is available because NIHB will not pay the cost of it. They are therefore obligated to prescribe a narcotic.
The Chair: It's interesting. With respect to the use of this particular drug, there might not be a market for long-term continued use of it, but the actual total cost per patient might wind up being lower.
Dr. Doig: Absolutely.
The Chair: But that's a very important example of the issues, and I'm not surprised by what you said.
Along that line, Ms. Boyle, I'd like to pursue your reference to 47 per cent of the drugs in your catalogue having experienced a shortage of some sort, if I interpreted you correctly. Now, of those 47 per cent, that particular group of drugs, what percentage would you say are generics?
Ms. Boyle: Most of them are generics, and if I recall correctly, 88 per cent of our drug shortages are generics.
The Chair: Sticking to that group, in your case, the 47 per cent of your catalogue, could you estimate in how many cases there is an alternate medication that could be available? It may not be on the formulary in the particular province, but for what percentage of the total would you think there would be an alternative drug on the market somewhere?
Ms. Boyle: This is a guess, but I think it's a high per cent, so I would say 75 to 80 per cent, if not more. If 88 per cent are generics, obviously, the others are sole source, and you're going to have to go to another therapeutic alternative, but within the generic, for the most part, there is an option.
The Chair: Was there a significant percentage of those cases where the option was also listed on a formulary or prohibited? What I'm trying to get at is I know how the formularies operate and they're not always listed.
Ms. Boyle: When it comes to shortages, I don't think hospitals put the formulary rules into play, necessarily. They are looking at getting the patient taken care of. Probably the most significant area where there is trouble is around pain management, when you have drugs in short supply relative to pain management and you have patients who may be in the palliative situation and require considerable amounts of drugs. In a shortage situation that's very difficult to handle, because the best-case scenario for allocations when you're trying to spread this drug across the country and this one patient for 10 days may need an enormous supply, it becomes a challenge.
The Chair: I think you can all see the basis of my question here with regard to the issue of drug shortage. It is the difference between a circumstance of perhaps a radioactive drug, a biologic or something for which there may only be one identified and available, versus those areas where there are, in fact, many drugs that have been approved by Health Canada or the FDA, usually both, for a particular indication. A shortage of a drug simply because it's the one that's on the formulary may not actually create a health issue.
I think Mr. Johnston gave us a very good category of examples, of which I'm sure he has many more that could flesh it out, on the idea that drug shortage is in the eye of the beholder, to some degree. That is, there are many facets to it in terms of how you interpret it and respond to it. That's why it's important for us to have an understanding of this to some degree, in terms of making recommendations that are actually sensible as opposed to those issues that are complicated simply because of the division of health care in the provinces and the formularies that exist. We're trying to get you to help us with those issues where we can make recommendations that could actually have a beneficial impact.
I'm sorry to pick on you again, Ms. Boyle. I hope you don't see it that way. You gave specific numbers, and those are always nice things to have.
I was struck by your breakdown of how you evaluate sources. If I heard you correctly, in calculating the outcome, 37 per cent of the weight was given to quality. I'm sure you have an explanation that is different than the question I'm going to put to you, and that is that one would have assumed that a certain reliability of quality would have been an absolute requirement for purchase as opposed to a number. I want to understand how the 37 per cent number, with regard to quality, operates in your evaluation scheme.
Ms. Boyle: Okay. Yes, when Health Canada approves the drug it is quality enough to be available and used in Canada for those patients who require it.
However, once you get that product into a hospital supply chain and it is an injectable product, how that product is labelled, the colour of the product, what are the other contents of the products within that vial — is there a preservative in it? You can't give preservatives to neonates. Is there latex in it? You have to be very careful about whether latex is in it. When it is being used on a nursing unit at two o'clock in the morning and the font is 0.6, it causes situations where medication safety is put at risk. Those are primarily the things that we evaluate to say that, within the hospital part of the supply chain, this product is better suited to it.
The Chair: That's very helpful, and in fact indicates that really it's an issue of looking at a product that supplies the need for which you're purchasing the product.
This gets into the other issue that all generics are not identical, even with regard to a given indication, because the fabrication of the drug product is often different from one to the other. While they're expected to meet Health Canada's requirements, it is well known that the way in which the active ingredient distributes in the body can be significantly influenced by the type of package, that is, the composition of the total pill that is consumed.
All those are factors that complicate the issue of alternate drugs in this area. So that was a very important clarification for me, and thank you very much.
Senator Eggleton: I have two quick questions, and actually the first one picks up on something you just explored a moment ago. It also relates back to something Mr. Johnston said earlier on when you talked about instead of 100 of X product, maybe 100 of Y would be a good alternate medication.
How does that relate to the drug formularies and in turn to the drug plans in different parts of the country?
This is more dealing with the retail pharmacy than perhaps the hospitals, but are people readily able to get their drugs paid for if it's an alternate drug? Would you say there's some percentage of the time that that doesn't happen? How is that working?
Ms. McArthur: In Ontario, if a generic drug is not available, there is a process the pharmacy goes through. They can dispense the brand. If the brand is still available and they bill us back, we pay them for the brand price. We don't pay them the brand distribution cost. So the patient just wouldn't see the difference.
If they have, for example, a Teva version of a product and the Teva version is unavailable, they would first substitute the Apotex version. So you would move them that way. The differences between the generic products, for the vast majority of people, are not there. That's where we worry about the epileptic. There is a small subset of epileptics who are very sensitive to those things, and that's where we've had a lot of challenges.
Senator Eggleton: But there is a fair bit of flexibility.
Ms. McArthur: Yes.
Senator Eggleton: My next question is to you, and you mentioned the National Emergency Stockpile System. Is it the Public Health Agency that administers that?
Ms. McArthur: Yes, it is.
Senator Eggleton: How could you see that improving and assisting in the shortage problem?
Ms. McArthur: I think there are certain types of products. Perhaps we need to do a thought piece on which types of products we absolutely need to maintain in the same way that we think about vaccines or pandemic response pieces. Are there drugs that we should be thinking about in that way? We can then leverage that capacity so we maintain a stockpile in the country at all times so we have a buffer for when we have a shortage that's a result of, let's say, a tsunami that wipes out where the active ingredient is manufactured or where the one manufacturing plant is overseas. Then we have that capacity and plan in the system to have that product.
Senator Eggleton: There is a working committee here, I believe. Who could advise this system or the Public Health Agency as to which ones are in that category that should be stockpiled?
Ms. McArthur: I think you would want to pull in leaders from our hospital system, probably from long-term care and key specialists in the community area. It's most likely to be the specialty areas. I'm cognizant that we need to be thoughtful about a whole series of other services that are dependent in an ancillary way on medications that we don't normally think of, like the dentists. It's unlikely that we would put them at the top of the most critical drugs we need to inventory, but we need to keep those people in mind.
Senator Eggleton: It would be rather difficult, wouldn't it, to try to predict in advance for where you should be stockpiling. You mentioned a tsunami; you never know when that's going to happen.
Ms. McArthur: There are some products that have far fewer alternatives available.
Senator Eggleton: I see. That's the measurement.
Ms. McArthur: Those would be critical. They are lifesaving, life dependent drugs. Those ones are critical. We can manage without codeine.
Mr. Johnston: I would just like to add to these comments about critical stockpile and to advise that. Not only what products should you be stockpiling, but also how you're going to stockpile them. Products expire, products need to be rotated, all sorts of things.
The federal government could put a massive investment into a lot of products, and then within a year or a few months it's expired and you have to throw it all out. Once you get it set some place and you have the massive warehouse somewhere in Manitoba, how do you get the product to Nova Scotia? How are you going to move it around?
I think there's an opportunity. You asked about whom to consult about which products to stockpile. The distributors would have no input on what products you should stockpile. As you progress along with this idea, you might want to involve the distributors to help you understand how to stockpile it and make it an efficient system, as we have right now.
Senator Enverga: This is like the questions of Senator Seth. You mentioned in one of your conclusions here on this paper that you said "a need for greater transparency, particularly in regard to the black box of the federal review process." Can you tell me more about the black box? What is it all about? What's so secretive about the black box?
Ms. McArthur: We have no idea what goes on inside the regulatory review that Health Canada does on a new drug coming into the country, nor on like a drug that has to come in to replace a drug during a shortage. We don't know who was asked to come forward. So if they've asked for a notice of compliance, we do not know that a manufacturer has done so. That is a huge challenge for us in terms of jurisdictions. Even when we're planning not in shortage times but we're trying to figure out which drugs will come in, how does that impact what decisions we're making in terms of what things we will add to our formulary — we have no idea.
We have no idea what the discussions are in the back and forth and what evidence is submitted to Health Canada. We have no information about how the label — the indications, the use, the restrictions — is negotiated with the manufacturer, because it's not just a decision made by Health Canada; it's actually a negotiation that happens with the drug manufacturer. We do not know what the trade-offs were in that negotiation. All we know is that something pops out the other side.
So when we're talking about a shortage situation, we have no idea if, say, a manufacturer from elsewhere in the world is trying to come in through Health Canada in a way that would alleviate the shortage before we actually run out. We just don't know. That's a problem.
Senator Enverga: Would you expect more communication to help this situation?
The Chair: We have dealt with the whole issue of approvals in our first review, so we won't go further down that area. What you're touching on is —
Ms. McArthur: Something you've heard before.
The Chair: Yes, and we have reported on that and made recommendations in the transparency area.
You've been helpful. I've let it go to this point to give the senator some indication. He wasn't on our committee at that point, but we're not going to explore that further today.
Senator Eaton: A last question, very quickly. You said 70 per cent of the drugs you distribute to hospitals are generic. What about using non-generic drugs? Is there just as much of a shortage? You have to educate me here.
Ms. Boyle: No, there isn't the same extent of a shortage for non-generic drugs. They are generally the innovators, they are under patent and they are the only makers. They have all information.
Senator Eaton: So it's economic, too.
Ms. Boyle: There are still some shortages, and they become the more serious ones, because either you need to find a source globally or you have to go to a totally different product, which isn't necessarily in the best interests of the patient.
The Chair: Thank you. The issues that you've dealt with have helped the committee understand this is a fairly complex area. The issue is being able to identify the possibility of an emerging shortage in some area. We've heard from you clearly and we know from other areas that such a condition can arise for a number of reasons, and you have all fleshed that out.
After you go away from here and think about it — because these are issues that are of real concern to all of you and for all of you on behalf of a large number of people in your respective areas — if you think of some way in this modern electronic age that there would be the possibility of collecting information in a manner that would allow some predictive capability with regard to emerging drug shortages that you could inform us on or suggest to us, we would welcome your input in that manner. If so, please communicate that through our clerk.
I won't elaborate now, but we have heard through a number of reviews we have done — we did a review on behalf of Parliament of the H1N1 pandemic, for example — and we saw how pharmacists are often aware early of any emerging medical outbreak, shall we say, and could anticipate perhaps the need of certain drugs in those areas. It's only one aspect of this total thing, but it relates again to the idea of an electronic database in which you suddenly see a spike in numbers in those kinds of areas.
From the distributors' point of view, the interface with manufacturers, the awareness of what's happening on a global basis, we know in answer to one of the questions earlier about fabrications of drugs. We heard from one witness in an earlier study that the active ingredients or components that come together in a manufacturing process can come from several countries — the key products — so it's not a simple issue in terms of collecting this data.
You all have a great deal of experience, and our issue is trying to make recommendations to government and agencies that can actually have a positive impact. If you could continue to think about these issues in that manner and contribute further to us after you leave here, we would be most appreciative.
With that, on behalf of the committee, I want to thank you for being here and for the efforts you've made to clarify the questions that we've put to you. I also thank my colleagues once again.
(The committee adjourned.)