Week 11 Pharmaceuticals

Question 1

History of
pharmaceuticals

Answer 1

Latter half of the 19th century saw isolation
of:
◦ Cocaine from coca leaves
◦ Salicylic acid from willow bark
◦ Quinine from cinchona bark
◦ Digitalis from foxglove
◦ Opiates from opium poppy
Parallel developments in chemistry led to
ability to synthesize drugs
Emergence of germ theory followed by
advances in antibiotics post-WWI to WWII

Question 2

Early regulation of
medicines in Canada

Answer 2

Opiate Act and Proprietary or Patent Medicine Act (1909)
◦ Beginning of efforts to protect the public against drugs
administered without medical supervision
Federal Department of Health established in 1919
◦ Food and Drugs Act introduced in 1920
◦ Specific requirements for licensing drugs
In 1951 it became mandatory to submit safety data to then
Health and Welfare Canada (now Health Canada) prior to
bringing drug to market

Question 3

Thalidomide and
regulation

Answer 3

Licensed for prescription use by Health
Canada in April 1961
◦ Had been available in West Germany from
1957
Post-market studies in Europe revealed side
effects
Withdrawn from West Germany and in
December 1961
Remained legally available in Canada until
March 1962
Tragedy prompted strengthening of safety
standards in 1963

Question 4

Co-insurance:

Answer 4

a system where a patient pays a set percentage of the amount per drug or per
prescription.

Question 5

Copayment:

Answer 5

an amount per drug or per prescription that a patient pays. In some jurisdictions,
the dispensing fee charged by the pharmacist is charged to the patient.

Question 6

Deductible

Answer 6

a limit up to which a patient pays the full cost of the drug. After the deductible is
reached, the patient either does not pay or has reduced payments for prescriptions

Question 7

Premium:

Answer 7

a fixed amount, not related to the number of prescriptions, that a beneficiary must
pay to be eligible for prescription drug insurance.

Question 8

Formulary:

Answer 8

a list of medicines that are included within the insurance plan.

Question 9

Universal coverage:

Answer 9

coverage for prescription drugs that is available to all Canadians and
enables them to access necessary medicines.

Question 10

Canadian Pharmaceutical Drug Coverage

Answer 10

Canada has no national prescription drug coverage system
◦ In-hospital prescriptions covered under Canada Health Act
◦ Out-of-hospital prescriptions covered by patchwork of public plans to
complement over 1000 private insurance plans offered by employers, unions,
professional associations

Question 11

Financing –
Public drug benefit programs

Answer 11

Relatively comprehensive public coverage for
selected populations, such as senior citizens
and social assistance recipients.
Universal drug plans that provide all residents
protection against “catastrophic” drug costs
only, regardless of age.
Majority still private insurance/out-of-pocket
payment.

Question 12

How do income-based plans work?

Answer 12

Residents are eligible to participate without being charged premiums.
Benefits and the deductibles are calculated based on the household
income of beneficiaries.
◦ Below the deductibles, patients are required to cover 100 percent of the costs of
their prescriptions – either out-of-pocket or through voluntary private insurance, if it
is available to them.
◦ Once their deductible is reached, patients may still be required to cover a proportion
of drug costs by way of coinsurance, which can also depend on their household
income.
◦ The total prescription drug costs borne by patients may be limited to a percentage of
household income.

Question 13

Stage 1: Approval by Health Canada

Answer 13

1. Preclinical New Drug Submission
   with all known data on the substance
2. Clinical research stage
   ◦ Safety
   ◦ Effectiveness
3. New Drug Submission with complete
   information on the new drug
4. Notice of Compliance allowing the
   drug to be sold
   Includes product monograph with all
   information about the drug

Question 14

Stage 2: Patented Medicine
Prices Review Board

Answer 14

Protects consumers by ensuring manufacturers’ prices of
patented medicines not “excessive”
◦ Establishes maximum price that drugs can be sold at:
◦ Only for patented drugs
◦ Generic drugs at provincial discretion
◦ No jurisdiction over prices charged by wholesalers or
pharmacies, or fees charged by pharmacists

Question 15

Stage 3: CADTH
Common Drug review

Answer 15

Should the drug be eligible for public reimbursement?
Review of new drugs, or existing drugs approved for new
indications
Analyzes clinical effectiveness, safety and cost-effectiveness
Compares drugs with current accepted therapy to determine
therapeutic advantages and disadvantages, as well as costeffectiveness
Can recommend:
(1) Do not cover at all,
(2) cover but only if the manufacturer lowers
their price,
(3) cover but only for certain patients or under certain
conditions, and
(4) cover as a regular benefit

Question 16

Monitoring drug safety

Answer 16

Companies required to notify
Health Canada of any adverse
reactions they become aware
of
MedEffect Canada
◦ Reports from health professionals
and consumers
~5% of drugs approved
eventually need to be taken off
market

Question 17

Marketing

Answer 17

Direct-to-consumer advertising
of prescription drugs is not
legal
◦ But disease awareness ads are
“ask your doctor about . . .”
◦ Over-the-counter drugs can be
marketed
Promotion directed at doctors
is widespread

Question 18

Earlier recommendations - Hall Report

Answer 18

Recommended that Canada implement a universal, public Pharmacare
program following the introduction of universal coverage of medical care.
◦ Said federal and provincial governments should work together to make a list of
medicines—selected on the basis of their clinical and economic value to society —
available to all Canadians at a cost of just $1 per prescription (about $8 in today’s
terms).
Justice Hall:
“In view of the high cost of many of the new life-saving, life-sustaining, pain-killing,
and disease-preventing medicines, prescribed drugs should be introduced as a benefit
of the public health services program.”

Question 19

Earlier recommendations - 1997 National
Forum on Health

Answer 19

Also recommended that Canada implement a universal public drug benefit
program:
“because pharmaceuticals are medically necessary and public financing is the only
reasonable way to promote universal access and to control costs, we believe Canada
should take the necessary steps to include drugs as part of its publicly funded health
care system.”
Recommended that universal public drug plans in all provinces make
available prescription drugs selected on the basis of evidence of clinical
and economic value. It recommended that the program impose user
charges only on products that are not the most cost-effective treatment
options (i.e. brand name vs. generics).

Question 20

Earlier recommendations - 2002
Romanow Commission

Answer 20

Recommended that all governments in Canada work together to integrate medically
necessary prescription drugs within Canadian Medicare.
Universal “catastrophic” drug coverage a first step, with
“. . . the ultimate objective of bringing prescription drugs under the Canada Health Act.”
Also argued that investments needed to ensure that:
“. . . prescription drugs are integrated into the system in a way that ensures they are appropriately
prescribed and utilized.”
Recommended that a national agency be created to negotiate drug prices and coverage
decisions for the universal drug plan, monitor prescribing and drug safety, and provide
objective information about medicines to patients and health care providers.

Question 21

2018 Conference Board Report: Assessing the
options for Pharmacare reform in Canada

Answer 21

“Universal” public coverage
◦ Comprehensive public coverage—A public plan that includes coverage for a broad formulary of
medicines for all Canadians; the government would pay all drug costs or there would be a limited
copayment where the patient would pay a certain percentage and then the government would pay
the remainder.
◦ Public coverage of essential medicines—A public plan that covers a more limited formulary of
medicines for all Canadians with little or no patient cost sharing.
◦ Income-based deductible public coverage—A public plan that includes coverage for a broad
formulary, with the cost of drugs paid for by the patient or a private drug plan until a specific
amount is reached. After this threshold is reached, the government pays all costs.

Targeted public coverage
◦ Individual mandate—A requirement that all Canadians must be insured either privately or
publicly. The details of each plan might vary by provider, but would generally be subject to a
minimum formulary and cost-sharing provisions.
◦ Optional public coverage—Publicly funded plans with premiums would be available for all
Canadians, should they wish to become insured.

Question 22

Advisory Council on the
Implementation of National
Pharmacare

Answer 22

Mandate: “to provide independent
advice to the Minister of Health and
Minister of Finance on how to best
implement national pharmacare that is
affordable for Canadians and their
families, employers and governments.”

Question 23

Bill C64: Canada’s Pharmacare Act

Answer 23

Provides universal public coverage but only for contraceptive drugs and devices and
selected diabetes medications
◦ 100% coverage for people with no insurance; coverage of out-of-pocket portion for those with
other public or private insurance plans
A “fill-in-the-gaps” program with a central role for private insurance companies
◦ Doesn’t reduce administration or administrative complexity
◦ Perpetuates higher drug prices
◦ Economically regressive: insurance premiums to finance the private insurance represent a greater
share of income for low-income households
◦ Profit for shareholders plays a role in negotiations with pharmaceutical companies on pricing
Plans further development:
◦ National formulary
◦ Bulk purchasing strategy
◦ Support for pan-Canadian strategy on appropriate prescription medication use

Question 24

What is a briefing note?

Answer 24

• Government/governance document that is a summary of
  facts on a particular issue
• Used to keep decision/policy makers informed or to
  support decision-making
• Distills complex information into a short and highly
  structured document

Question 25

Types of briefing notes and why they are
used

Answer 25

• Information: to inform about about a particular policy, program, or area
• Direction/decision: to provide a set of options for going forward in a particular
  policy area, and advise on a recommended course of action
• Response/public relations: to provide responses for an official to give publicly
  either in legislature/parliament or to the media
• Conference/meeting: to prepare for attending a meeting typically contains
  agenda, speaking notes etc.