The real story behind the sudden drop in Canada's drug prices

Hello and happy Saturday! Here's this week's round-up of eclectic and under-the-radar health and medical science news.

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Big Pharma blinked. But why?

By Vik Adhopia

Something unprecedented happened this week in the opaque world of Canadian drug pricing.

Some generic prescription drugs just got a lot cheaper for everyone — and the actual prices are no longer a secret. The sudden price cut is a big deal because Canada is near the top of the list in drug spending per capita compared to other industrialized countries.

The news broke on Monday when the industry group representing Canada's generic drug makers, the Canadian Generic Pharmaceutical Association, announced they'd reached a new pricing deal with the federal, provincial and territorial governments (except Quebec).

• Generic drug industry agrees to cut prices up to 40%

The deal means lower prices for 70 of the most commonly prescribed generic drugs. These drugs cover conditions such as high blood pressure, depression, high cholesterol, epilepsy and heart conditions. And they will be 25 per cent to 40 per cent cheaper as of April 1.

But why would Big Pharma suddenly agree to lower prices? Fear of something worse?

Part of the story is the power of bulk buying. For the last few years, provincial governments have been negotiating together, using the clout of their collective bulk buying power to lower prices they pay under public drug plans. (Those plans usually cover seniors, Ontarians under 25, welfare recipients, Indigenous people, Mounties and military personnel.)

But negotiations were different this time. The governments brought a big stick to the table — the threat of tendering. Tendering happens when governments spend tax dollars to buy goods, from office chairs to fighter jets. They make sellers submit offers, to see who can offer the lowest price. However, governments don't do this when they buy drugs. At least not in Canada.

But thanks to Quebec, the rules of the game changed last year.

Frustrated by escalating health plan costs, Quebec decided it would play hardball with generic drug companies by making them submit tenders for the most commonly prescribed medications.

"And everybody started to panic," said Marc-André Gagnon, a pharmaceutical policy researcher at Carleton University.

The drug companies knew that once Quebec got drug discounts, the rest of the provinces would want a similar deal. And that would start a cascade, with private insurance plans and people with no drug insurance also demanding lower prices.

In the end, Quebec didn't have to resort to making companies compete with each other for the lowest price. The generic companies blinked. They voluntarily lowered their prices. And for the first time they published the true prices — which are normally kept confidential, so that no one is certain what anyone else is paying.

"Just the threat of tendering made all generics manufacturers get together and say 'OK we agree to reduce prices by 38 per cent across the board,'" said Gagnon.

"Whether they are covered under a public/provincial drug plan or an employer-sponsored drug plan or if they have no drug plan at all — the new prices apply to them," said Jeff Connell, vice-president of corporate affairs for the Canadian Generic Pharmaceutical Association.

So what do the generic drug companies get in return for dropping their prices? They don't have to worry about being forced to compete with each other during the five years that the deal is in place.

"We know what the rules are, we know what the prices are … so that's important," Connell said.

But are we getting the lowest prices possible for these 70 drugs?  Not compared to New Zealand which is noted for its skill at squeezing the lowest prices out of drug companies with its competitive bidding process, although there are drawbacks.

When we compared the new Canadian prices with New Zealand's list, we found many examples where Canadians will still pay two to 10 times more than the New Zealand government under its universal drug plan.

All of that suggests that prices are lower when companies are forced to compete and submit tenders. And that's why generic companies will probably blink again in five years when the new deal expires.

Here's how some of the Canadian and New Zealand drug prices compare under the new deal:

A college diploma in 'pseudoscience?'

By Kelly Crowe

In a Canadian first, Ontario students will soon be able to graduate with a three-year advanced diploma in homeopathy from a publicly funded community college — Georgian College, in Barrie, Ont.

And those graduates can go on to become licensed homeopathy practitioners, now that Ontario has created an official College of Homeopaths to govern the profession the way doctors and other health professionals are regulated.

"It is really problematic on so many levels. Homeopathy is clearly nonsense. It is scientifically absurd," said University of Alberta professor Timothy Caulfield, who has studied and written about homeopathy in Canada.

Homeopathy is based on a scientifically implausible premise — the belief that a mysterious water memory can cure disease. To prepare homeopathic therapies, water is exposed to a substance — a plant, a mineral or a chemical — and then diluted until there are no remaining traces of the substance.

But practitioners believe the "memory" remains, even though there is no molecular evidence for this. Then that water is sprayed on sugar pellets and sold as a remedy for a wide range of diseases — from colds to cancer.

• Unproven homeopathic remedies for kids still promising relief despite new label rules

Anything that confers credibility on the practice of homeopathy can cause scientists to tear at their hair in frustration.

And the news that Ontario's Ministry of Advanced Learning has approved a three-year advanced diploma in what most scientists consider quackery sent an apoplectic Caulfield to Twitter to start the debate.

"To have a government-funded institution legitimize it is really disappointing," Caulfield said.

Georgian College's Homeopathy Advanced Diploma program was deemed eligible for provincial operating funding, and homeopathy students will be able to access student loans and grants through the Ontario Student Assistance Program.

"When assessing programs for funding, the ministry considers labour market demand, student demand and alignment with the institution's Strategic Mandate Agreement," ministry spokesperson Tanya Blazina told CBC News in an email.

It is the definition of pseudoscience, it is the definition of bunk.- Timothy Caulfield, University of Alberta 

In Ontario, homeopathy became a licensed profession in 2015 — a move that was also controversial because there were concerns it would legitimize the practice. And apparently it has. The ministry requires that the college ensure that its programs are compliant with the regulatory body in question.

Georgian College's dean of health, wellness and sciences Fay Lim Lambie said, now that it's a licensed profession, the college has decided to start training young homeopaths.

"Because this is a regulated health field, we need to ensure our students will have the preparation necessary to become practitioners in the field with competent knowledge, skills and judgment," she told CBC News.

But it's training in what has been called a "scientifically bankrupt notion."

"It is the definition of pseudoscience, it is the definition of bunk," said Caulfield.

Yet some Canadian scientists are actively testing the theory on patients in clinical trials.

At the University of Toronto's school of pharmacy, there's a study looking at the effect of homeopathy on ADHD —  a trial so controversial that 90 scientists sent an open letter to Heather Boon, the dean of pharmacy, asking her to stop the research.

"I'm highly skeptical that our study will show that the pills have a benefit, but until we have the results I need to keep an open mind," Boon told CBC News.

At McMaster University in Hamilton, infectious diseases researcher Mark Loeb is testing homeopathic vaccines to see if they cause an immune response in healthy volunteers.

"Our hypothesis is that these homeopathic vaccines will not show any impact on the immune system," Loeb told CBC News.  "We're doing it in an unbiased manner, a placebo-controlled trial."

At Sick Kids Hospital in Toronto, a study into whether homeopathic remedies could relieve fatigue in children undergoing chemotherapy was attempted. But because the hospital refused to allow homeopaths to approach patients, and because so many parents refused to co-operate, the study was deemed unfeasible.

At Sunnybrook Health Sciences Centre in Toronto, researchers tried to test homeopathic pills placed under the tongues of people on ventilators to see if that would reduce the amount of phlegm in their lungs. The trial was terminated due to slow recruitment.

Health Canada licenses homeopathy under its natural products directorate, although it has ordered some labelling changes to prevent certain health claims, particularly on children's products.

In the U.S., homeopathy labels must carry blunt warnings that there's no scientific evidence and that the claims are based on theories "not accepted by most modern medical experts."

Still, the market for homeopathy is booming. It's now a $3-billion industry that the FDA warns "exposes more patients to potential risks associated with the proliferation of unproven, untested products and unsubstantiated health claims."

Recipe for an advocacy campaign: Just add media and stir things up

By Kelly Crowe

Here at Second Opinion we try to pull back the curtain to show how the health news machine operates. And this week we stumbled upon an interesting case study.

It involves a drug company, a public relations firm and a patient advocacy group. The objective? Using the media to call on governments to pay for an expensive new high-dose flu vaccine for seniors over 65.

We received several emails from a representative at Environics PR suggesting that we do a story about the need for free publicly funded access to the vaccine.

"To learn more on what seniors and governments can do," the PR firm offered to arrange interviews with two people: a doctor and a spokesperson from CARP, the advocacy group for seniors.

But the actual client was not named. Who was paying Environics to operate this publicity campaign? We wrote back to ask.

Erin MacFarlane of Environics PR responded in an email: "We're working with Sanofi Pasteur on this and partnering with CARP." When we looked it up, we discovered that Sanofi Pasteur is the company that makes the high-dose flu vaccine.

When we asked why Sanofi Pasteur's name wasn't mentioned, we learned that we were expected to connect the dots ourselves.

"The high-dose flu vaccine was mentioned in my email and Sanofi is the company that manufactures it," MacFarlane replied.

We are fully transparent about the fact that we have commercial relationships- Wanda Morris, vice-president of advocacy, CARP

Sanofi Pasteur confirmed in an email that "the current media campaign [is] a Sanofi Pasteur program around this important public health issue."

"Sanofi Pasteur provided an unrestricted educational grant to CARP in support of a program focusing on the impact of influenza on seniors and associated preventative measures," the company wrote.

Over at CARP, Wanda Morris, the vice-president of advocacy, said the group accepted the Sanofi Pasteur grant because "we think there's real potential for lives to be saved and suffering to be alleviated so that aligns with our overall mission and priorities of advocating for the best possible health care and financial security for older Canadians."

"We are fully transparent about the fact that we have commercial relationships," Morris said.

In the original pitch to CBC, Environics also offered to arrange an interview with Dr. William Dalziel, an Ottawa gerontologist.

Dalziel said his involvement started at a Sanofi Pasteur advisory board last June. An Environics representative was there and asked if he would be part of the media campaign. He agreed.

"Environics called me and said would I be interested in media interviews and I said sure. It's a great vaccine and needs to be given to every Canadian over 65."

And when Environics asked him to write a newspaper letter to the editor calling on all of the provinces to offer the new high-dose vaccine, he also agreed.

He said he received no payment for media interviews or for writing the letter to the editor that appeared in the Toronto Star and in the Prairie edition of The Globe and Mail. But he did receive an honorarium for attending Sanofi Pasteur's advisory committee meeting in June.

"I don't want compensation. I just want to do good," he said.

• Ontario bill would require disclosure of pharmaceutical payments to health professionals

We asked another doctor for a second opinion about the new high-dose flu vaccine.

Dr. Iris Gorfinkel said she already recommends it to her elderly patients without any prompting from the drug company.

"It is a superior vaccination," she said, adding it is too expensive for some of her patients. The retail price of the vaccine is about $80.

"It's a lot of money for a senior. Seniors are on very fixed and strict budgets."  

What about the Environics PR campaign to advocate for government funding?

"There should have been disclosure right from the beginning," Dr. Gorfinkel said. "It hurts when it comes out later that there's funding being received."

"Sanofi Pasteur did not request its name be kept off the email communication," the company told CBC News. "There was no intent from Sanofi Pasteur or Environics to hide Sanofi Pasteur's involvement from this communication as the high-dose influenza vaccine was mentioned in the email."

So far Ontario has announced it will pay for the high-dose vaccine next year. And Manitoba is already covering it for seniors in long-term care facilities.