The pharmaceutical industry is ratcheting up its fight against the Trudeau government’s efforts to reduce prescription-drug prices, launching a second legal challenge to an overhaul of the agency that controls those prices.
Innovative Medicines Canada (IMC), the industry group for makers of brand-name drugs, and the Canadian branches of 16 pharmaceutical companies filed an application for a judicial review of the plan in Federal Court on Friday.
IMC and the companies argue the federal government did not have the authority to fundamentally alter the role of the Patented Medicine Prices Review Board (PMPRB), the agency that sets ceiling prices for drugs, through a package of regulatory amendments adopted last month.
The new lawsuit comes on the heels of a constitutional challenge filed in Quebec last month by six other drug companies, including Merck Canada Inc., Janssen Inc. and Boehringer Ingelheim Canada Ltd.
“This industry lives and breathes to save lives," Pamela Fralick, the president of IMC, said in an interview on Friday. "But [pharmaceutical companies] do need a workable business model in order to do what they do best, which is create innovative medicines. Canada is simply not creating that sustainable environment.”
Prime Minister Justin Trudeau and his government have vowed to reduce drug prices, partly as a precursor to a national pharmacare proposal that is expected to be a key feature of the Liberals’ re-election pitch this fall.
A spokesman for Health Minister Ginette Petitpas Taylor declined to comment because the matter is before the courts.
Canada’s sticker prices for brand-name drugs are the third or fourth highest among the countries of the Organization for Economic Co-operation and Development, depending on how prices are measured.
High-priced new medications are putting particular strain on provincial and federal drug plans, which together saw their expenditures rise by $2-billion between 2014-15 and 2017-18, according to a PMPRB report released on Thursday.
During the same three-year period, government drug plans – which generally cover the poor, seniors and patients who have very high drug bills – had a 19.3-per-cent increase in costs for medications with an annual price tag of $10,000 a year or more.
Amir Attaran, a professor in the faculties of law and medicine at the University of Ottawa, called the legal action a “Hail Mary” from an industry chafing against tighter regulations and the prospect of lower profits.
“This lawsuit has an infinitesimal chance of success," he said of the claim filed on Friday, "but it’s still dangerous … particularly at a time when pharmacare is on the tips of our tongues.”
Created in 1987, the quasi-judicial Patented Medicine Prices Review Board was designed to be a check against drug companies charging excessive prices at a time when Canada was beefing up patent protections for prescription medications.
The agency measures Canada’s drug prices against those of seven other well-off countries, including the United States and Switzerland, which today have the highest prices in the world.
The regulatory amendments that the Liberal government passed on Aug. 21 would remove the U.S. and Switzerland from the list of comparator countries and add six countries with lower prices.
The changes would also empower the board to take into account a drug’s value for money and other economic factors when setting maximum prices.
The new rules are scheduled to take effect on July 1, 2020.
Ms. Fralick of IMC said the new approach lacks “balance," and could lead to price cuts so deep they would dissuade pharmaceutical companies from applying to sell new medications in Canada.
In their application for a judicial review filed on Friday, IMC and the 16 companies, including AbbVie Corp., Eli Lilly Canada Inc. and Pfizer Canada ULC, contend the federal government overreached when it fundamentally altered the purpose of the PMPRB through regulatory amendments instead of changing the Patent Act, the legislation that gives the agency its powers.
“At best, it’s kind of a delay tactic," said Colleen Flood, director of the University of Ottawa Centre for Health Law, Policy and Ethics.
"Even if they succeed, there’s nothing, as far as this claim goes, to stop the government passing legislation to amend the Patent Act. I’d say this is an attempt [to delay] hoping there’s a change of government.”
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