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Katelyn Campbell administers Cystadrops to her children Nora Campbell age 2 and Alan Campbell age 6 after school at their Wallaceburg home.Rob Gurdebeke/The Globe and Mail

The Ontario government has begun covering $100,000-a-year eye drops for an ultrarare disease, bringing relief to patients but underscoring how the Italian company that makes the drops managed to escape the scrutiny of Canada’s drug price regulator.

Last month, Ontario became the first province to fund Cystadrops, a medication that keeps dangerous crystals from building up in the eyes of people with cystinosis, an inherited metabolic disorder that affects an estimated 100 Canadians.

Other provinces are expected to follow suit, which means taxpayers across the country could soon be spending millions of dollars a year on a commercial version of the cysteamine eye drops that hospital pharmacies used to concoct in house for, at most, a few thousand dollars a year.

Normally, the federal government’s Patented Medicine Prices Review Board would review Cystadrops to see whether it breaks rules prohibiting excessive pricing.

But in this case, the PMPRB is powerless: Recordati Rare Diseases Inc., the Milan-based pharmaceutical company that makes Cystadrops, has declined to apply for a Canadian patent, putting the drug out of the regulator’s reach.

“We are aware that Health Canada approved Cystadrops for sale in Canada earlier this year and [we] are currently monitoring developments in the market,” said Jeff Wright, a spokesman for the PMPRB. “At this time, however, it does not appear that there are patents issued in Canada that pertain to Cystadrops that would bring this product under PMPRB jurisdiction.”

Recordati confirmed it does not hold a Canadian patent for the eye drops.

“The market is simply too small,” said Marianne Tatschke, the company’s director of investor relations and corporate communications.

Asked whether Recordati chose not to apply for a Canadian patent expressly to avoid PMPRB scrutiny, she said by e-mail that the company was “unable to disclose further details.”

Amir Attaran, a professor in the faculties of law and medicine at the University of Ottawa, said it was “scandalous” for Recordati to put a six-figure list price on a tweaked version of an old, easy-to-make drug.

“It’s nothing but price gouging,” he added.

Katelyn Campbell, a mother of two children with cystinosis, said the “extreme” price of the new drops makes her uncomfortable, even though she is grateful she does not have to pay for the medication out of pocket.

“It feels like a burden on taxpayers and it feels like a burden on me, just knowing that," Ms. Campbell said from her home in Wallaceburg, a town of about 10,000 near Chatham.

A two-week supply of Cystadrops for her six-year-old son, Alan, came with a pharmacy receipt of $4,289.76 – which works out to more than $111,000 for a year’s supply.

That figure includes pharmacy markups, but does not reflect the secret rebates or discounts that Recordati would have agreed to in a deal reached last month with the pan-Canadian Pharmaceutical Alliance, the group that negotiates confidential drug prices on behalf of the provincial, territorial and federal governments.

The price Ontario and other provinces will pay is certainly lower than the list price, but neither party will reveal by how much – a common practice in the murky world of drug pricing.

Ms. Campbell’s daughter Nora, 2, is still using the last of the family’s supply of inexpensive, pharmacy-made eye drops. They rationed the old drops until it became clear the government would pay for the commercial version.

Cystinosis is a genetic disorder that causes an amino acid called cystine to accumulate in lethal amounts in organs, beginning with the kidneys. Ms. Campbell administers almost 40 doses of medication, including eye drops, to her two children every 24 hours to keep the disease at bay.

The Ontario government’s Inherited Metabolic Diseases program, which covers drugs for patients with more than 80 rare conditions, pays for all of the Campbell children’s medications. About 35 cystinosis patients receive their drugs through the program, according to the Ontario Ministry of Health.

The budget for the program was $39.9-million in 2018-19, up 23 per cent from $32.4-million five years earlier.

In the end, Ms. Campbell may have no choice but to switch Nora to Cystadrops soon. The hospital pharmacy at the London Health Sciences Centre stopped making the cheap version last year after new standards for compounding pharmacies came into effect. The hospital then outsourced the mixing of the drops to a compounding pharmacy in Quebec, which itself quit mixing the drops after Health Canada approved Recordati’s version.

In general, Health Canada’s rules say compounding pharmacies should not make a drug from scratch if a licensed version is available.

Erin Little of Port Elgin, Ont., expressed hope that the Quebec pharmacy, Gentès & Bolduc Pharmacists, will resume making the inexpensive drops, which worked well for her nine-year-old daughter, Olivia.

After The Globe and Mail wrote a story about Olivia’s plight in August, Health Canada sent the Quebec pharmacy a letter on Sept. 5 saying it was free to start making cysteamine eye drops again because Recordati’s version is slightly different. Cystadrops are more viscous and can therefore be administered less frequently.

A spokesman for Gentès & Bolduc declined to comment.

Olivia went about a month without drops from mid-September to mid-October. Her parents are now rationing a final bottle from the Quebec pharmacy.

“I’m not going to stop questioning the price, but we might have to switch to the Cystadrops," Ms. Little said. “Ultimately, I feel like I failed because I feel like Pharma won.”

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