Transcript The Economic Case for Universal Pharmacare

Universal Pharmacare:
Solving Canada’s Drug Problem
Pharmacare Forum
Windsor Public Library, April 26, 2011
Canadian Health Coalition
Canada’s Drug Problem
1. No ability to control costs, rising 10.5% a year
2. Drug are overpriced – Canada 3rd highest in
world
3. 8 million Canadians uninsured or underinsured
4. Prescription drug over-use and misuse
especially with children and the elderly
5. New drugs rushed to market based on secret,
dubious data. Rx drugs are 4th leading cause
of death
Pharma’s 7 Deadly Sins
1. Conducts unethical clinical trials
2. Ghost-writes studies, hides negative results
and promotes illegal off-label use to doctors
3. Bribes doctors, pharmacists and medical
researchers
4. Advertises hazardous drugs with misleading
information
5. Invents illnesses in order to sell more drugs
6. Buys silence from regulators and politicians
7. Prevents the poor from getting medicines
-April 2010, Astra-Zeneca settled for $520 M on charges of ghostwriting
promotion for Seroquel (300$/month, most expensive of its category).
-November 2010: J&J in discussion to settle over off-label marketing of R
-One market niche to be developed was ADHD and Bipolar disorder in ch
Illegal off-label promotion to MD’s
in Canada
(Kirkey 2010)
Big Pharma Profits
compared to Fortune 500 firms
(1954-2008; in millions of constant 1984 US$)
Source: Fortune
Dominant Business Model:
massive promotion of ‘me-too’ drugs
& control over Medical Knowledge
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Sales: $239.8 billion
R&D: $24.1 billion (10% of revenues)
Promotion: $57.5 billion (24.4% of revenues)
Promotion directed towards physicians: $42.8 billion
Average promotion spending per physician: $61,000
1 drug rep for every 6 physicians
Undisclosed promotion: Fellowships, ghostwriting, « off-label »,
seeding trials, astro-turf groups…
Merck made $12.9 billion in 2009
and then closed its research lab in Montreal (180 jobs lost)
Retail price for an identical volume
of pharmaceutical products
OECD countries, 2005
(US$, market exchange rate)
Source: OECD 2008 - Eurostat OECD PPP Programme, 2007.
Most New Drugs Have No
Significant Advantage
Category
Percent
Nothing new
51%
Possibly helpful
21%
Harmful
14%
Offers an advantage
7%
Judgement reserved
5%
A real advance
2%
Major breakthrough
0.2%
Total
100.0
Source: France 2001-2010, Préscrire International, 2011
Direct-to-consumer-advertising
• Drives up prescription drugs costs
• Fails to inform
• Compromises public safety: exposure to
dangerous drugs before risks are fully
recognized, Additionally, most new drugs are
costlier than existing treatments, but few provide
any therapeutic advantage.
• Promotes the medicalisation of normal life
The Economic Case for
Universal Pharmacare
Pharmacare Savings - A
• Current expenditure on prescription drugs
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Growth in expenditures from increased use
Reduction from decrease in dispensing fees
Reduction from drug assessment
Elimination of the monthly deductible in Qc
Elimination of rebate system for generics
Elimination of the 15-year rule in Quebec
Change PMPRB price fixing
Elimination of extra costs for private plans
Elimination of tax subsidies
Total net savings annually
$ 25.141B
+10%
- 2%
- 8%
$144M
$1.3B
$102M
$1.43B
$560M
$933M
$ 4.479B
Pharmacare Savings - B
• Savings from competitive purchasing
• Growth in expenditures from increase in use
Reduction from decrease in dispensing fees
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Elimination of the deductible in Qc
Elimination of the 15-year rule in Quebec
Elimination of extra costs of private plans
Elimination of tax subsidies
Total savings annually
$10.2 B
+10%
-2%
$ 144M
$102M
$ 560M
$ 933M
$ 10.744 Billion
Industrial Policies = Total Failure
Innovation policies are justified by the
multiplying effect on the benefits it creates
as compared to costs. With a negative
multiplying effect, innovation policies in the
pharmaceutical sector are a total failure:
• Canada spends $7.4 billion in subsidies
• Value-added in return is only $4.8 billion
Rx spending up 73.7%
CANADA,1999-2009, per capita, inflation adjusted
Public spending is stable
Canadian Health Care Spending
As % of GDP (1975-2009)
14
12
10
8
6
4
2
0
Total Health Spending
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
Public Hospitals & MDs
Data: CIHI, 2010
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Universal Pharmacare
will save $ billions
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Replace our patchwork U.S.-style drug insurance plans with
universal, first-dollar coverage (no deductible or co-pay)
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Pay only for drugs that have been independently established to be safe and
cost-effective
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Establish a National formulary
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End the price-fixing and public subsidies of Big Pharm
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Start bulk purchasing
www.PharmacareNow.ca
Pay for What Works
Next steps for Canadians
“Democracy is the thing that lets ordinary
people do extraordinary things. There isn’t
anything we can’t accomplish if we set our
minds to it.”
- Tommy Douglas