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What My Critics Don't Get About Drug Policy

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It is always a pleasure for me to openly discuss and debate issues surrounding drug coverage with experts in the field. In a series of three blogs, an economist from the Montreal Economic Institute, Yanick Labrie, criticizes my work on Canadian pharmaceutical policy. Unfortunately, these criticisms are ill-founded and do not contribute to a better understanding of these issues:

-Mr. Labrie criticizes my claims about rising costs by confusing rising costs per capita (which is an important issue) and the rising price for individual drugs (which has never been an issue).

-Mr. Labrie criticizes my claim about expensive prices paid in Canada for patented drugs by confusing manufacturer prices of patented drugs and retail prices of prescriptions. The latter is a flawed measure since the average retail prices vary according to the average length of prescriptions in different countries.

-In a 2010 report, I mentioned a survey by Statistics Canada in which 23.5 per cent of respondents said they had no drug coverage. Mr. Labrie criticizes me for quoting that survey because, according to him, we should understand from the survey that these respondents in fact had public drug coverage. Let me remind Mr. Labrie that the question asked in the survey by Statistics Canada was: "Do you have insurance that covers all or part of the cost of your prescription medications? Include any private, government or employer-paid insurance." To this question, 23.5 per cent of respondents answered "no."

-Mr. Labrie criticized my claim about the lack of therapeutic innovation in the pharmaceutical sector by confusing new drugs that do not represent a significant therapeutic advance and me-too drugs. My claims are based on my doctoral works on the topic, as well as independent assessments of new drugs made by medical journals like Prescrire and Geneesmiddelenbulletin, which analyze both the contribution of me-too drugs and breakthrough drugs. According to these journals, neither of which takes pharmaceutical advertising, fewer than 10 per cent of new drugs represent a significant therapeutic advance.

With his series of ill-founded criticisms, Mr. Labrie clearly shows a lack of understanding of these important issues. He tries to depict me as a radical because I suggest the implementation of evidence-based reforms, including the implementation of a national drug plan. Evidence-based research on the topic by the fiscally conservative C.D. Howe Institute also arrived at the same conclusions.

The Canadian Life and Health Insurance Association, which represents private health insurers in Canada, also considers that current drug coverage is inequitable in terms of access and prices, and necessitates urgent reforms to contain increasing costs.

The pharmacy benefit management company Express Script Canada estimates that in 2012 private drug plans wasted $5.1 billion in reimbursements for drugs that do not provide any additional therapeutic benefits compared to existing formulations and for unnecessary dispensing fees. Since private insurers paid $9.8 billion for prescription drugs in total, it means that 52 per cent of what they spent was pure waste. Executives at Great West Life and Sun Life admit that, in their current forms, we must question the sustainability of private drug plans.

Mr. Labrie, however, touts these wasteful, inequitable, inefficient and unsustainable private plans in their current form as models for drug coverage in Canada. I disagree, as do all serious academics working on the topic, as well as private insurers themselves.

Mr. Labrie has the right to defend his opinion, but he should do it in a respectful way without distorting facts or the views of others.

Marc-André Gagnon is an expert advisor with and assistant professor with the school of public policy and administration, Carleton University.