The U.S. government is stepping up its pressure on drugmakers to disclose secretive contract terms. They’re taking particular aim at bilateral agreements with foreign countries, specifically Canada. The aim of this initiative is to gather data that depicts a true cost of drugs in Canada. The ambitious aim is to create “most favored nation” standards under U.S. healthcare policy. The U.S. has stressed that drug pricing affects the U.S. Medicaid reimbursement system, which is at odds with the U.S. domestic policy. This new work seeks to do exactly that.
Canada’s health landscape these days is increasingly marked by crisis. The country is still reeling from an overabundance of prescription opioids, and this epidemic will undoubtedly spill into the new year. Beyond the immediate impact, the shortage raises profound questions. How will greater transparency in drug pricing address or intensify the existing problems in the Canadian healthcare system?
Canada’s Patented Medicine Prices Review Board (PMPRB) is an example of a national regulator with a mandate to control drug prices. In 2017, the Canadian federal government introduced reforms to the PMPRB in order to strengthen the agency’s ability to conduct oversight. Even these reform efforts were mostly dropped after being subjected to legal challenge by the pharmaceutical industry. The PMPRB has the authority to intervene and impose penalties, such as levies, if a drug is marketed at an “excessive” price in Canada.
Just as important is Health Canada’s role—it has been working hard to keep an eye on the developing U.S. program. According to Guillaume Bertrand, spokesperson for Health Minister Marjorie Michel, “We expect drug manufacturers in Canada to respect their legal obligations and contracts.” This statement is an encouraging sign that Canada is committed to upholding regulatory integrity, even in the face of external pressure.
Confidential Negotiations and Public Agreements
Currently, the pan-Canadian Pharmaceutical Alliance (pCPA) is responsible for negotiating with drug manufacturers on pricing. Mauro Chies, CEO of the pCPA, emphasized the importance of confidentiality in these negotiations: “Drug price negotiations are confidential as agreed upon by both the pCPA and the manufacturers we negotiate with.” This blanket confidentiality has been the source of much controversy. The U.S. wants to be able to tap this information for its own benchmarking purposes.
The Government of Canada does not negotiate public listing agreements in good faith. There were plans from the Canadian government to provide the PMPRB with access to this confidential discount information. Such information was provided by drugmakers to public plans in Canada. This time, legal pushback from Big Pharma has shut down these efforts. In its wake, we are left with a new transparency gap that threatens to shape future negotiations.
Implications of U.S. Actions on Canadian Healthcare
These advances come amid a backdrop of increasing U.S. scrutiny over the pharmaceutical sector. President Biden has gone so far as to threaten pharmaceutical companies with tariffs. Such measures could have significant repercussions for Canada, particularly as it navigates its own healthcare challenges within the G7 context.
Ontario is also piloting a new early-access program for new cancer drugs. This new initiative is just one reflection of their active efforts to address drug availability problems. This pilot program is part of Canada’s broader strategy to enhance drug access while balancing affordability and effective healthcare delivery.
Michael Dietrich, vice-president of market access and policy at Innovative Medicines Canada (IMC), remarked on the urgency of addressing pharmaceutical issues in trade discussions: “Canada can no longer delay addressing pharmaceuticals in trade discussions.” This mood reflects increasing domestic and international expectations of Canada to be clearer and more consistent with its pricing approaches.
