Towards the end of May, Marjorie Michel, Canada’s federal minister of health, was on the stage at a conference sponsored by the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), the leading global lobby for the pharmaceutical industry. What she said, and didn’t say, about her government’s pharmaceutical policy tells us a lot about her government’s priorities when it comes to prescription drugs.
Michel claimed that aligning Canada’s drug approval system with those of international drug regulators like the U.S. Food and Drug Administration (FDA) and the European Medicines Agency will reduce the time between when companies submit a new drug application and when the drug is approved by 50 per cent. There is already good evidence that faster drug approvals mean more safety problems once those new drugs are on drugstore shelves, a point Michel omitted.
Over two-thirds of the drugs that the federal government wants approved more rapidly are, at best, minor therapeutic advances over existing products. The main beneficiaries from these drugs are the companies making them, not the patients taking them—another point the health minister did not mention.
When we use the decisions by foreign regulators to approve new drugs for Canadians we are essentially harmonizing Canadian regulatory values with those of foreign regulators. Harmonization increases the risks that potentially dangerous drugs will be sold in Canada.
Take the case of Aduhelm, the controversial Alzheimer drug which the FDA approved, prompting the resignation of multiple members of a FDA advisory committee. Biogen, the company behind the drug, eventually discontinued the drug because of concerns about safety and because it was a commercial flop. It was never approved by Health Canada despite the FDA approval.
The health minister touted her government’s investment of “$1.7 billion to attract world leading researchers, transforming the nation into a clinical trial powerhouse.” Innovative Medicine Canada, an industry association for pharmaceutical research companies, already brags about the number of clinical trials in Canada for drugs for rare diseases (orphan drugs). The reality is that fewer than half of the orphan drugs that Health Canada approves have clinical trials that are done in Canada.
The federal government is also infusing $131 million into the pan-Canadian Pharmaceutical Alliance (pCPA), the body that negotiates with drug companies for the amount that federal/provincial/territorial drug plans will pay for new drugs. The new investment is meant to accelerate drug price negotiations and reduce administrative burdens. Collective bargaining by Canadian governments is a good thing, because it lowers drug prices. But only a little more than 40 per cent of total prescription spending comes from government, the rest is spent either by private drug plans or out of pocket by individual patients—and pCPA bargaining doesn’t affect the prices that private plans or individuals pay.
Bargaining for the entire country is important. It’s one of the main reasons why Australian prices for patented drugs are almost 30 per cent lower than Canadian prices. The Pharmacare Act, passed by the previous Liberal government in October 2024 could have eventually led to drug coverage for all residents of Canada for all medically necessary drugs. It only offered a modest start, coverage for drugs for diabetes and for contraceptives. Before the last election only three provinces and one territory had signed agreements with Ottawa to receive Pharmacare money. Since the election there have not been any further agreements despite efforts by some provinces like Newfoundland and Labrador to sign on.
Now, it appears that the federal government will not renew even existing deals when they expire. That will be the end of any hope of national bargaining for lower drug prices.
What Michel had to say and didn’t say points to the federal government’s policy priorities when it comes to prescription drugs. . Federal policymakers like Michel want drug companies to be able to bring drugs to market faster, so that drug companies can start collecting revenue sooner—all while drug prices remain high and those high prices are maintained for longer periods of time. Profits first, public health last.
