Healthy Skepticism Library item: 1272

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Publication type: news

Cobb C.
U.S. drug firms want subsidies ended in Canada: Lobbying against medicare
National Post 2003 Jun 9

Full text:

OTTAWA – The United States’s big drug companies are intensifying their lobbying efforts to “change the Canadian health care system” and eliminate subsidized prescription-drug prices currently enjoyed by Canadians.

A prescription-drug industry spokesman in Washington confirmed to CanWest News Service that information contained in confidential industry documents is accurate and that US$1-million is being added to the lobbying effort against the Canadian system.

The Pharmaceutical Research and Manufacturers of American, known collectively as PhRMA, is also targeting Canada’s new and booming multi- million dollar Internet pharmacy industry, which is providing prescription drugs to U.S. customers at significantly lower prices than in the United States. The U.S. industry claims the Internet business is putting American patients at risk.

According to documents leaked to media in the United States last week, PhRMA has budgeted a further US$450,000 to specifically attack the legitimacy of the online drug industry, which is centred in Manitoba but also operates out of other provinces including Ontario, British Columbia and Alberta.

“We believe price controls are bad for patients because it takes away innovation,” said Mark Grayson, PhRMA’s senior director of public affairs.

“The Canadian system couldn’t exist without the United States and we’re trying to ensure that there is some burden sharing with the Canadian consumer to enjoy the fruits of the medicines they are using.”

Mr. Grayson said the elimination of subsidies would benefit Canadians because they would have access to more medicine and would see an increase in the amount of research and development done in Canada.

The US$1-million earmarked for a Canadian lobby and public relations campaign is not a huge amount, Mr. Grayson said.

“It is money to look at the problem and to help patients in Canada realize that they need a different system.”

Canadian critics reject PhRMA’s claims and warn that deregulation would lead to skyrocketing drug costs and leave ordinary Canadians in the same boat as millions of Americans, who have inadequate medical insurance and are unable to afford drugs prescribed by doctors.

Emergency room physician Joel Lexchin, an associate professor at the School of Health Policy at York University in Toronto, said PhRMA wants to smear the Canadian system because prices in Canada make U.S. drug companies look bad.

“Lots of other countries have similar regulations,” he said, “but it’s Canada’s proximity to the U.S. that makes the difference. It puts pressure on [the] U.S. government to do something about drug prices in the States.

So PhRMA will want to create the impression that government-funded health care is bad for you, in the sense that you can’t get services or access to some drugs.”

The prescription drug industry is a massive business. In Canada, sales of prescription drugs top $12-billion annually with approximately 65% to 70% of that spent on brand-name products. In the United States, sales are more than 10 times higher.

Dr. Lexchin, a long-time advocate for low drug prices, rejects PhRMA’s claim that the regulated system is preventing Canadians from getting access to certain drugs.

“I have been following this business for 30 years now,” he said, “and the bottom line is that nothing of value pharmacologically is being kept from Canadians. There are drugs not available here but only because there is no market for them — tropical disease medicine, for instance.”

Alongside its battle against Canadian online pharmacies, the prescription-drug industry is also locked in a fierce battle with its generic counterpart in Canada over patent regulations introduced in the dying days of the Mulroney Tory government a decade ago.

At hearings continuing before the House of Commons Industry, Science and Technology Committee, the generic industry is claiming the regulations unfairly allow the patent companies to systematically delay the introduction of generic drugs — typically 45% cheaper than their patented counterparts — by launching spurious legal actions when patents expire after 20 years.

The prescription industry says it is essential that its companies be protected and allowed to recoup the millions of dollars it costs to develop and improve the efficacy of drugs.

Jeff Connell, spokesman for the Canadian Generic Drug Manufacturers Association, said the issue is not about legitimate patent protection.

“We don’t want to dismantle patent protection,” he said. “We fully support it, and the right of any pharmaceutical company to recoup their investment.

What we want to get rid of are the regulations.”

Mr. Connell rejected PhRMA’s claim that it would increase research and development in Canada if the Canadian government deregulated the drug industry, and pointed to a study last year by the Canadian Patented Medicine Prices Review Board that showed R&D investment in Canada lags way behind many other major countries with comparable drug markets. “They use the R&D promise as a carrot and a stick,” he said.