Question Period Note: CANADIAN DRUG AGENCY

• The government is committed to creating a new Canadian Drug Agency (CDA, the Agency). The Canadian Drug Agency Transition Office (CDATO) is engaging provinces, territories, and stakeholders to develop options for the mandate and functions of the new agency. The CDATO also supports work on other pharmacare-related initiatives (e.g., national formulary, drugs for rare diseases strategy).

• Prescription drug prices in Canada are among the highest in the developed world.
• High prices and patchwork of drug coverage leave many Canadians facing significant barriers to getting the prescription drugs they need.
• Creating the CDA will provide the dedicated leadership and capacity needed to implement national priorities for improving the pharmaceuticals system.
• The CDA will provide the structure and national coordination required to support efforts to make our drug system more accessible, sustainable and prepared for the future.
• Since April 2021, the Transition Office has held over 200 meetings and roundtables with provinces and territories and a wide range of stakeholders to inform the development of the Agency.
• We will continue to work with all provinces, territories, and stakeholders to lower costs and improve access to the safe, high-quality drugs and vaccines Canadians need.

IF PRESSED ON THE NEED FOR A CANADIAN DRUG AGENCY
• Canada has internationally recognized pockets of excellence in pharmaceuticals management, including the regulatory approvals process within Health Canada.
• The CDA will focus on addressing system gaps and removing duplication, improving national coordination while improving access and equity in the system. The CDA will not duplicate well-performing functions or organizations.
• Creating the CDA will also provide the dedicated leadership and capacity needed to implement national priorities to improve the pharmaceuticals system.
• In the face of mounting pressures on provincial and territorial healthcare systems, especially in the wake of COVID-19, the timing is right for an Agency dedicated to supporting a coordinated national approach.

IF PRESSED ON RESULTS TO DATE
• COVID-19 sent shock waves through the entire healthcare system and Health Canada was no exception.
• If we have learned anything from the pandemic, it is that we need a coordinated national approach to ensure timely, affordable access to high quality drugs and vaccines.
• Since April 2021, the Transition Office has held over 200 meetings and roundtables with provinces and territories and a wide range of stakeholders to inform the Agency.
• This continuing work will inform options for creating the Agency, including its mandate and functions.
• We will continue to collaborate with willing provinces, territories, and other partners towards launching the Agency.

IF PRESSED ON RESPECTING PROVINCIAL AND TERRITORIAL JURISDICTION
• Federal, provincial, territorial collaboration will be the cornerstone of the CDA, and we will continue to work collaboratively with jurisdictions toward launching the Agency.

1. Advisory Council on the Implementation of National Pharmacare
   • Budget 2018 announced the creation of the Advisory Council on the Implementation of National Pharmacare, chaired by Dr. Eric Hoskins.
   • The Council engaged with Canadians, patients, provincial, territorial, and Indigenous leaders, health care experts, and stakeholders through regional roundtables, town halls, an online questionnaire, and written submissions.
   • On June 12, 2019, the Council’s final report was tabled in Parliament, recommending the implementation of national universal pharmacare over several years, including FPT collaboration to create a new arms-length Canadian drug agency with the following functions:
   o Assessing the clinical effectiveness of drugs compared to other treatment options
   o Assessing the cost effectiveness of drugs compared to other treatment options
   o Deciding which drugs and related products (such as devices and supplies) should be on the national formulary
   o Negotiating prices and supply arrangements with manufacturers
   o Providing advice to prescribers, pharmacists, and patients on how best to use drugs
   o Monitoring the safety and effectiveness of drugs in real-world use

2. Budget Commitments
   • Budget 2019 announced federal investments to move forward on three foundational elements of national pharmacare
   o Creation of a Canadian Drug Agency to take a coordinated approach towards assessing effectiveness and negotiating drug prices.
   o As part of the work of the Agency, development of a national formulary to promote more consistent coverage across the country; and,
   o Creation of a national strategy for drugs for rare diseases to help Canadians get better access to the effective treatments they need.
   • Budget 2019 proposed $35 million over four years, starting in 2019-20, to establish a Transition Office to support this initiative. It also announced an investment of up to $1 billion over two years, starting in 2022-23, with up to $500 million per year ongoing, to help Canadians with rare diseases access the drugs they need.
   • These commitments were reiterated in the 2020 Fall Economic Statement and Budget 2021.

3. Impact of COVID-19
   Media and Public Opinion
   • Media coverage of COVID-19 has increased public awareness of some elements of the pharmaceuticals management system (e.g., science, brand names, regulatory approvals, domestic production capacity, and supply distribution). Long-term impact on overall trust for the system is still to be determined but may be impacted.
   • National pharmacare continues to receive a moderate volume of mixed media coverage. Recent coverage has highlighted the range of stakeholder views regarding the need for a national pharmacare plan.
   • An October 2020, Angus Reid study found that one quarter (26%) of Canadians say they have had to pay for half or more of their prescription drug costs over the past year. Against this backdrop of COVID-19, nearly nine-in-ten Canadians support the idea (86%) of an affordable drugs program and more than seven-in-ten (77%) supporting increased coverage should be a high priority for government.

Provinces and Territories
• Through the Council of the Federation, provincial and territorial Premiers publicly and persistently call on the federal government to increase funding for healthcare through the Canada Health Transfer (CHT). These calls have intensified due to the consequences of COVID-19 on healthcare systems.
• Ahead of the federal election in August 2021, Premiers called on all federal party leaders to commit to increasing the CHT, citing COVID-19 as having exacerbated existing stresses in the health care system.
• Following the federal election in September 2021, Premiers called on the Prime Minister to hold an urgent First Ministers’ Meeting on long-term, unconditional health funding and reiterated their call for an immediate increase to the CHT. In February 2022, Premiers called for a First Ministers’ Agreement on Sustainable Health Care Funding.
• The financial request from the Council is for the federal government to increase its share of health care costs from 22% to 35% of total health care spending and to maintain this contribution level over time with a minimum annual escalator of 5%.

1. Canada’s Pharmaceuticals Management Landscape
   • The core functions of pharmaceuticals management in Canada, as elsewhere, revolve around activities related to scientific evidence, pricing, and reimbursement, and ultimately coverage. Access to and use of Data to inform decisions is a significant and growing consideration, as is post-market research, which plays an increasingly important role in reviewing and refining decisions related to pharmaceutical products.
   • Responsibilities for aspects of Canada’s system are situated in relation to jurisdictional roles and responsibilities.
   • Some functions, introduced in response to emerging system demands, new technologies, and evolving market factors, are challenging to reconcile with the traditional division of responsibilities and the provisions of the Canada Health Act.
   • This evolution has resulted in gaps, challenges, and inefficiencies particularly in relation to:
   o Coordination across jurisdictions and throughout the life cycle of a drug
   o Data, real-world evidence, and analytical capacity
   o Health outcomes and appropriate use
   o Negotiations, pricing mechanisms and sustainability

Scientific Review of Drug Safety and Effectiveness
• Regulatory Market Authorization: The federal government, through the Minister of Health, is responsible for reviewing the safety, quality, and efficacy of health products, including pharmaceuticals and medical devices, and authorizing their sale in Canada. This function is out of scope for the CDATO.
• Clinical and Cost-Effectiveness Reviews: The Canadian Agency for Drugs and Technologies in Health (CADTH) is an independent not-for-profit organization that delivers timely, evidence-based information to health-care decision-makers about the clinical and cost effectiveness of pharmaceuticals, medical devices, diagnostics, and procedures. A core program area for CADTH is advice for drug coverage and listing decisions.
• Quebec conducts its own clinical and cost-effectiveness reviews through INESSS, which has a mandate to promote clinical excellence and the efficient use of resources in the health and social services sector in Quebec.

Pricing
• Price Regulation: The Patented Medicine Prices Review Board (PMPRB) is a federal quasi-judicial tribunal that regulates price ceilings for all patented pharmaceuticals in order to guard against excessive profit taking. The PMPRB mandate includes reporting on price and use trends as well as research and development activities by pharmaceutical companies in Canada.
• Price Negotiation: The provincial and territorial governments created the pan-Canadian Pharmaceutical Alliance (pCPA) in 2010; federal drug plans joined in 2016. The pCPA brings the collective buying power of FPT governments to price negotiations with drug companies to achieve optimal drug pricing outcomes for public payers. The pCPA does not include private payers. Canadians with no coverage pay the highest regulated prices.

Coverage and Reimbursement
• Public Drug Plans: Although outpatient drug coverage is not a mandatory feature of Canada’s healthcare system, each of Canada’s provinces and territories offer drug coverage to some residents, generally vulnerable or at-risk populations such as those with low income, high drug costs, or significant health conditions. The federal government provides drug plans for some populations, including First Nations and Inuit. Each public drug plan maintains a formulary that lists eligible drugs and the terms and conditions of reimbursement.
• Private Drug Plans: Many working Canadians receive employer-sponsored health benefits that typically include drug insurance. Each private plan also has a unique formulary; consequently, the terms, conditions and limits of coverage vary from plan to plan. Employers are not required to offer health benefits, and many employees of small businesses, casual workers, and participants in the “gig” economy do not have employer-sponsored coverage.
• No/Inadequate Plans: A relatively small but important share of Canadians have insufficient drug coverage and approximately 11% of Canadians no coverage at all. Canadian patients pay nearly one quarter (22%) of total prescription drug costs out-of-pocket.
• Mandatory coverage: Quebec is the only jurisdiction that requires citizens have prescription drug insurance coverage, either through mandatory opt-in to a private plan or mandatory participation in the public plan.

KEY FACTS
• Budget 2019 announced the creation of a new national drug agency that would build on existing provincial and territorial successes and take a coordinated approach to improving the Canadian pharmaceuticals management system.
• The Budget provided $35 million over 4 years, starting in 2019–20, to establish a CDATO to design the agency.
• In April 2021, the government announced Susan Fitzpatrick, a former Associate Deputy Minister of Health from Ontario, as the head of the CDATO.
• The CDATO has conducted analysis of the current pharmaceuticals management system and undertaken significant engagement. CDATO has held over 200 meetings and roundtables to date including with all provinces and territories, stakeholders, Indigenous representatives, and international leaders in pharmaceuticals management.
• In December 2021, the Prime Minister reinforced the commitment to creating the CDA in the Minister of Health’s mandate letter, stating the government would “continue engaging with willing provinces and territories towards national universal pharmacare, while proceeding with a national strategy on high-cost drugs for rare diseases and advancing the establishment of the Canada [sic] Drug Agency.”
• In March 2022, the Prime Minister elaborated on the mandate of the CDA in the Supply and Confidence Agreement with the New Democratic Party of Canada, announcing the CDA will “develop a national formulary of essential medicines and bulk purchasing plan by the end of the agreement” in 2025.