Headaches, Healthcare and Drug dealers

Diogenes's picture

Health care costs in Canada

Though we have lived in the Netherlands for almost 5 years, Calgary is still home. We visit there twice a year. Comparing the price of things is always a topic of conversation.

Strawberries, blackberries, and blueberries are a bargain in Calgary; pay-as-you-go cell phones, not so much. But how about the price of those drugs? -- prescription drugs.

I have this rule of thumb -- For a long and happy life, avoid doctors, hospitals and pills.

This may not sit well with doctors, hospital administrators, or anyone else in the health care industry, but it sometimes needs to be said.

This cultural practice of the annual checkup strikes me as a bit odd. It's highly recommended to make this visit even if you feel perfectly fine. I prefer visiting a doctor (or a lawyer) when something is wrong (or not right).

Now, most common folk would never think about going to a lawyer for an annual check-up on their legal condition if things were fine; but it's borderline reckless not to have an annual checkup to find out what may be wrong.

bulldogHeadache (6K)
Kenney Roger & The First Edition
Just Dropped In

Most of us need a lawyer only a few times in our lives: to buy a house, to draft a will, or to settle with a former employer. One reason is that lawyers are very expensive. Doctors are too. They should be viewed through the same lens.

Now, I'll be the first to admit that, in almost 60 years, I have visited a doctor far more than I have visited a lawyer. But that's personal, as they say. I've been blessed with pretty good health, and, for the most part, been honest and fair with people, as they have been with me (mostly). So I haven't really needed doctors or lawyers a whole lot. Life is good.

I don't care for the system in place that conducts a battery of tests that feeds and conditions itself to yield what the it has been programmed for. And there is always a little yellow pill for whatever that condition may be.

Being Prepared

I'm no boy scout, but I carry this drug kit with me when I travel. It has varied is size, weight, content and legality over the years. Sometimes I need it; most times I don't.

Something compelled me on the last visit to Calgary to check the replacement price of my kit in the event that replacement was necessary. It will be when we move back to Calgary.

So I went to the local Safeway pharmacy and showed all three prescriptions drugs that I carry when I board a plane. I asked for the cost of each prescription medicine.

Drug wars: Netherlands versus Canada

The table below lists the price per dose, in Canadian dollars, of three prescription medicines in two countries. The Canadian prices were quoted on March 16, 2012. The Netherlands prices are prescription label prices dating from from August 2011 to March 2012.

Prescription Medicine Netherlands Canada Dutch
Sumatriptan 6mg injections
(generic €125.45 for 6)
$27.45 $69.25 60%
Sumatriptan 100 mg tablets
(generic €8.26 for 6)
1.81 12.13 85%
Verapamil hydrochloride
(Abbott Isoptin SR 240 €20.96 for 90)
0.31 3.44 91%

You're kidding me, right?

So I was a bit smacked at these prices. The last entry in the table is for a medicine that I take daily to avoid using the first two. It's the brand name medicine I use because the generic version specified by my health care provider didn't work for me.

Even though the brand name medicine is available in both countries, in Canada the Isoptin SR240 was 11 times more expensive than in the Netherlands. I am hoping this is a crazy mistake, but I did ask the pharmacist to repeat that price for me.

Mother's Little Helper - The Rolling Stones, 1966
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The sumatriptan 100 mg tablet prices are for the generic versions available in both countries. The Calgary price was 6.7 times the Dutch price.

Generic sumatriptan injections were not available in Calgary. The Calgary price listed is for the brand name Imigran® refill kit. Though the Calgary price is 152% more than the Dutch price, compared to the other two medicines, it's the best deal.

Few Canadians actually pay these kind of prices. In Ontario, the reported figure is just 15%. Many have company sponsored health plans. In Alberta there is Blue Cross, a supplemental health insurance for prescription drugs.

But, even if one has Alberta Blue Cross, the $25/month deductible paid every month for a 30 day top-up of Isoptin almost pays for a 90 day supply of the same meds in the Netherlands.

This sample is admittedly small and anecdotal. Maybe this a poll that is is wrong 19 times out of 20, but as the the polls that predicted the 2012 Alberta election have demonstrated, stuff happens.

It's time to get personal

I reluctantly take one prescription drug daily -- Isoptin SR240, a brand name time-release formulation of the drug generically known as verapamil, a name that is hard to remember and few people care about. Verapamil is typically used to treat high blood pressure, but I take it to prevent cluster headaches.

dizzy2 (3K)

A possible side effect for verapamil users with normal blood pressure are bouts of dizziness. The generic version of the time release medicine - the one approved by our health insurer and comically called Verapamil something something Retard - did just that, as in "you make me dizzy Miss Lizzy".

There were occasions, waiting in the supermarket checkout line, when the head (or the room) started to spin. For some reason the supermarket was the worst environment -- the lighting, sounds, and maybe the useless information overload would all conspire to somehow lower the blood pressure in my head. Hyperventilating was helpful, but sometimes not enough.

A couple of times I had to abandon my grocery basket and quickly exit for some fresh air and a place to sit. It was a scary experience. I so hated it, that I quit the cursed medicine after more than a few of these near fainting episodes. But I really did give it a try.

But the cluster headaches became worse and more frequent. Over a span of 20 years, they progressed from being an occasional nuisance, like a cold, to being a chronic and disabling problem. Although cluster headaches are somewhat rare, a wealth of information on the internet reveals you are not alone in your suffering and just how great the suffering can be. They have also been called suicide headaches.

frenchman2 (4K)

I'm not dead yet… I got better

Another neurologist I consulted, while my regular was on maternity leave, insisted that I try the verapamil again. Ignoring my protests, objections, anecdotes and pleadings, he prescribed another formulation -- Isoptin® SR240 from Abbott.

Less is best?

The local pharmacist only had a lower dose on hand (180mg vs. 240mg), but I was happy to start with that. It seemed to work better, as in fewer dizzy moments in my personal test lab -- the "supermarket checkout line". I tried the 240mg strength next. It's the dose that I take everyday now.

I still have moments of being light-headed, but slow, deep breathing usually works.

But the brand name Isoptin definitely does work better than the insurer prescribed generic retard medicine. I confess to even enjoying a pink grapefruit now and then because I love pink grapefruit. It is a forbidden fruit with verapamil. It seems that grapefruit acts like some kind of catalyst for certain prescribed drugs, accelerating the body's metabolism of the drug.

pomegranate2 (2K)

Pomegranates are another favorite fruit of mine. From my experience, they work the same as grapefruit when accompanied with a side order of verapamil. So be forewarned, pomegranates and verapamil - bad stuff dude, just like grapefruit.

Or maybe forget the pill for a day and enjoy those forbidden fruits. Hey! - be careful with those fresh fruits!

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All natural ingredients

It has been a while, thankfully, since the last cluster headache. If I do get a one again, I'm ready. There are two icepacks in the freezer and a wheat-filled bag for a heatpack near the microwave. Applying alternate heat and cold compressess is a great therapy for all kinds of pain - muscle, joint and head.

Oxygen is a good therapy for cluster headaches. It often works, has no side effects, and is all-natural. The only problem is that the oxygen tank and regulator are just a little impractical to carry around. You can't bring your own oxygen tank on the plane (luggage or carry-on) and the only way to get a serving of oxygen on a passenger jet, even if you travel business class, is to kick out a window;

Medical_Oxygen_Regulator2 (2K)

And oxygen does not always work. Think about that before you kick out a window, even if you're flying business class (or not flying at all).

I have carried the pressure regulator with me, which weighs as much as a large hammer but looks a lot more threatening, especially when viewed through an airport security x-ray machine.

The heavy artillery

For real emergencies, I use another generic medicine -- sumatriptan. Migraine suffers might recognize it better under it's brand name -- Imitrex.

Sumatriptan is the generic name for a synthetic tryptamine. A natural tryptamine, "derived from a common fungus", has also been used to treat cluster headaches. Psilocybin is found in over 200 species of mushrooms. A Mother Jones article (c Sept. 1995) on a "Migraine Killer" drug included a subtle mention of these alternative therapies. It left me wondering where those pharmacy scientists find the inspiration to create the next block buster medicine.

Sumatriptan was developed in the 80's by Glaxo, a large pharmaceutical company. Sold as a patented medicine under brand names like Imitrex and Imigran and commonly prescribed for treatment of migraines, the product was an undoubted success. The patent has since expired and the price has dropped as generic versions of the medicine became available.

New and Improved packaging

ImigranKit (3K)

Sumatriptan is now available in various strengths and delivery systems: in pill form; as soluble tablets; as a nose spray; and as injections. I've tried them all. The patented delivery systems work only marginally better (for me) than the much cheaper generic tablets, which only sort of work.

Sumatriptan injections can have some serious side effects (like death), but after two hours of the most incredible pain imaginable, an event that can happen every day, twice a day or more, all options are on the table.

There are two forms of sumatriptan that I use, both in the strongest doses available. The first is a 100 mg tablet. It can take 60-90 minutes to act if taken with a glass of water. Too long. So I grind the pill into a powder, sometimes just using my teeth.

The powder is also easier to split into smaller doses (2,3 or 4). This can also save you money. This powder technique seems to shorten the reaction time by maybe 30% compared to simply swallowing the pill. I haven't tried to snort the powder. It tastes gross on the tongue and the sinuses get plugged, so there is no point.

I have used the crushed powder like chewing tobacco with some success. The powder gets absorbed by the saliva at the bottom of the jaw. The pain of a cluster headache is always on the same side of the head, like a hot spike nailed in from the top, behind the eye, thru the sinus and into the jaw.

WARNING -- you won't read this on the leaflet inside the box

Sumatriptan is a powerful drug, and (again, personal experience) if you use it too much, it stops working altogether. Use it only when you have to, when you can't bear the pain and no other alternatives are available. Use smaller doses if you can, until you don't need to take it at all. Don't be a baby - make the body fight back -- it will if you will it.

There are times though when a cluster headache will happen so quickly and with such intensity that all other treatments are useless. Then I use what I call the nuclear option -- the needle.

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I've seen the needle and the damage magic done

injectorPen2 (7K)

Nothing works better than sumatriptan from the needle (again, for me). The prescription injector is a device about the size of a big crayon. You press the blunt end against the upper leg and press a button on top. A needle jabs in; you count to 10 and let go. No need to find a vein. In 6-8 minutes the headache is totally gone; you feel very relaxed, and a little stupid. Enjoy, life is good, again.

The dose is only 6 mg. Hardly any blood, maybe a drop at worst. I now understand why hard core addicts use needles -- they are remarkably fast and efficient.

I only use the needle when I am desperate. I hate needles; they are rather awkward in the social settings I enjoy. They are also very expensive. The insurance company pays for it -- reluctantly -- but pays for it nonetheless. Sometimes you need to argue. Health insurance is a system that works if you make it work. I digress. Another blog.

About those high prices

The reason for the full disclosure of my medical condition is to provide the proper detailed background for the medicines I use and why. None of these drugs are patent-protected anymore, so why is the price in Canada so high? I set out to find out why. It has been a real eye-opener.

Doing the math

It appears the cost of the active ingredient (i.e. sumatriptan) does not play a major role in the market pricing. The smallest dose, the injectable one, is the most expensive.

If one analyzes the price per mg weight for different doses of the same pharmaceutical pill, one discovers the economy tic-tac3 (3K) of buying the largest dose and splitting it up into smaller doses (if possible). It's like the cost of the package (the pill) is the most expensive component.

I'm no expert on pressing powder into pills, but if you count the number of TicTacs in a box and divide the price of a box of TicTacs by that number, it gives you a pretty good idea on how cheaply you can stamp out a placebo pill, and still make millions.

Big savings are available when a generic becomes competitively available. For example a clever generic tablet that combines a number of brand name patented medicines that would normally retail for $6.00 can be made and sold for as little as $0.20 a pill -- a 97% discount.

Not all generics are made the same

Curiously, the generic injectable form of sumatriptan in The Netherlands is almost 40% of the cost of the brand name medicine in Calgary. This would rank it as a "Best Buy" in another context.

Obviously it costs more to make a self-administered injectable dose than it does to pop out a pill. But in the future, if a generic costs 40% of the brand name medicine, it might fail for provincial funding. Is that going to help?

All this really illustrates is that the pricing model for a a drug, generic or patented, is simply what you can get away with the market will bear. In Canada, that means what the provinces are willing to pay.

To really figure out why Canada has such high drug prices, you have to travel way back in time, to when our politicians first tried to fix the problem of high drug prices, by fiddling with Canada's Patent laws.

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Patently absurd - a brief history of Canadian Patent law

The price of patented drugs has long been a subject of controversy. What price do you put upon a miracle?

A patent grants the owner a market monopoly, but for a limited lifetime. Part of that lifetime includes the time it takes to bring the product to market. This can take years for a patented medicine because of the expensive tests and reviews that must be completed before a drug is approved for use.

xerox_914a_ad (18K)

A long time ago a company was granted a patent for an electro-static process that used light, heat, electricity and a dry black powder to produce a high quality black and white copy of an image. In a matter of seconds, one could produce a copy of a letter, a memo, an invoice, or a newspaper article on ordinary paper. It was a miracle.

The Xerox plain paper copier was born.

Governments instantly approved of this technology by purchasing large numbers of Xerox copiers. So did lawyers and all other kinds of businesses. Xerox made a fortune -- for a while.

Almost every laser printer/copier today uses the same technology that Xerox patented some 60 years ago. Ironically, that same technology can be copied for free, or at least without paying Xerox for every copy you make. That explains why a basic laser printer/scanner/copier costs a tiny fraction of the $2,995 price that Xerox sold it's basic copier for in the '80's, not long after their patent ran out.

You can't keep a great idea from the world. You can own it for a while, but not forever. That's the way patents work.

I may be wrong, but I don't believe Canada held any government inquiries into the high cost of the Xerox copier in the two decades that Xerox held the patent.

But there were many government inquires into the high price of patented drugs during that time. The Xerox 914 was be very helpful in shaping the debate and legislation in the years to come.

1969: Remember when?

Being an early adopter of socialized medicine, Canada's governments found themselves on the hook for these new patented, miracle drugs. There was also some evidence that Canada was being gouged for patented medicines by the foreign-owned pharmaceutical firms, based on prices for the same drugs in other countries.

MoonLanding (7K)

So in 1969, the federal government changed the Canadian Patent Act to discriminate against pharmaceutical patents. It gave Canadian companies the right to copy a patented drug under protection of an exemption called a compulsory license. The government would collect a royalty of 4% as the prescribed licensing fee on behalf of existing patent holders.

This particular form of legalized theft did not win Canada a lot of respect in the international community or with its trading partners. It certainly did not encourage foreign investment. The current patent holders were also, to say the least, a bit upset.

The reasons given at the time for the legislation were to control costs and to encourage growth in Canada's own bio-science and pharmaceutical industries. Although this policy change did encourage the startup of a generic manufacturing industry, it had the quite the opposite effect on medical research and development in Canada. The innovative pharmaceutical companies, the ones that sponsor research, file for patents, and bring new products to market, simply closed up shop and left the country.

Nor did this new no-patent patent legislation have much effect on the rising cost of drugs. The pharmaceutical companies that bring the latest drugs to market are almost all foreign owned and international in operation. They are free to set their own special Canadian price no matter what laws Canada might adopt. Perhaps this has become one of the factors in pricing for Canada.

In fact it was found that ...Canadian prices were, on average, 23 percent higher than the mean international price in 1987.

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1987: When a problem comes along - you must whip it

In 1987 the federal government, bowing to international pressure, amended the patent legislation. Bill C-22, An Act to amend The Patent Act, granted patent holders a patent protection period of 7, 8, or 10 years (it gets complicated) after a patented drug had been approved for market in Canada. It also granted Canadian patent holders 20 years of patent protection.

While Bill C-22 did give recognition to the length of time it takes and the cost involved in bringing a new pharmaceutical to market, it still discriminated against one form of intellectual property -- the foreign pharmaceutical patent.

1990: Patent Cooperation Treaty

Canada finally ratifies the Patent Cooperation Treaty (PCT). The PCT provides a unified procedure for filing patent applications to protect inventions. Although Canada was one of 18 countries to sign the original declaration in 1970, it does not formally adopt the agreement until 12 years after most other industrialized nations had signed. Canada's patent laws still contained special exemptions however, and became subject to legal challenges by the other countries.

By 1992, the patent legislation was being revisited again, this time to comply with articles and conventions of the North American Free Trade Agreement (NAFTA) and World Trade Organisation (WTO) agreements.

1993: Whip It Good!

In the spring of 1993, Bill C-91, The Patent Act Amendment Act, 1992 was passed into law. This basically reset Canadian patent law for pharmaceutical drugs almost back to international standards, but with one rather outrageous exception.

In what has to be one of the most blatant examples of Canadian politics catering to a narrow special business interest, the same government also passed another bit of back-door legislation: The Manufacture and Storage of Patented Medicines Regulations.

This gave the right to domestic generic drug makers to manufacture and stockpile a patented drug for six months prior to a patent expiring. This shabby regulation was challenged by the US and Europe through the WTO over the next several years. In October 2000 these Regulations had been revoked.

In June 2001, Bill S-17, An Act to Amend The Patent Act, finally abolished compulsory licensing for the domestic market and increased the patent protection period to 20 years (from 17) in accordance with the international Trade-Related Intellectual Property Rights (TRIPS) agreement. Canada's patent laws were finally in sync with international standards.

2005: Attempted CSR (Corporate Social Responsibility)

JCsuperstar (4K)

In May 2005, Bill C-9, An Act to amend the Patent Act and the Food and Drugs Act, The (comically renamed) Jean Chretien Pledge to Africa Act became law.

It has since been rebranded Canada's Access to Medicines Regime (CAMR). The legislation allows for the manufacture of patented drugs as generics for export to developing countries and countries in need. This licensing is allowed under certain WTO provisions.

2007: Saving Africa (or a new business opportunity?)

In July 2007 Apotex, Canada's largest generic drug manufacturer, requested and was granted permission from 3 different patent holders -- GlaxoSmithKline, Boehringer Ingelheim, and Shire BioChem Inc., to combine 3 different drugs into a single tablet. Apotex was then granted a license to manufacture and export the product to Rwanda. The requests for permission and licensing application process was completed in a little over two months.

In May 2008, Apotex announced it had won an open public tender from the government of Rwanda to supply a quantity of its AID/HIV medicine Apo-TriAvir. The drugs were to be manufactured under CAMR regulations.

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2009: If a good time turns around, you must whip it!

In 2009 Apotex completed the second of two shipments of Apo-TriAvir. A total of 14.4 million tablets at 19.5¢ per tablet were supplied to Rwanda. Apotex subsequently complained about the cost and complexity of the CAMR regulations.

"The federal government and Parliament must fix or change the legislation if we want to meet the original intent of getting life-saving drugs to developing countries,"

There has been a mighty lobby effort to have the regulations relaxed. Bill S-232 was sponsored in the Senate by Sen. Yoine Goldstein. It did not become law, but that did not stop the mighty lobby effort either.

2011: YAAAPA - Yet Another Act to Amend the Patent Act

In 2011, a private members bill, Bill C-393, An Act to amend the Patent Act (drugs for international humanitarian purposes), passed in Parliament.

Some argued that there was no need for Bill C-393; that it ran the risk of making things worse.

The Bills contain an amendment that would exempt medicines made under CAMR from the Food and Drugs Act, meaning that Health Canada's normal safety and efficacy regulations would no longer apply.(27) The Bills would make it good {C}enough for Canada's Minister of Health or an importing country to give a nod to the medicine--without any requirement to apply scientific standards.(28)

Bill C-393 was before the Senate for ratification when an election was called. It too failed to become law. But that still not stop the lobby effort.

White Rabbit - Jefferson Airplane, 1967

2012: YAAAPA II -- Chasing Rabbits

Like a B-grade Halloween movie sequel, a new private members bill has appeared in the House. Bill C-398 HelenLaverdiere (2K) has been sponsored by Hélène Laverdière, the NDP member for Laurier-Sainte-Marie (Québec).

This bill will modify the provisions of the current access to medicines regime, which allows Canada to export (patented medicines as) generic versions of drugs for HIV-AIDS, tuberculosis, malaria and other illnesses to developing countries, and it will make the regime easier to use.

(words in the parenthesis added to improve clarity).

I don't know if Ms. Laverdière has noticed, but Canada does precious little for Africa these days. She has worked closely with the Grandmothers Advocacy Network (GAN) though, whose main focus appears to to be amending Canada's patent laws.

GRAN-banner (147K)

Judging by the t-shirt logos that appear on many of the images on the GAN website, they like to take pictures at Grandmothers to Grandmothers Campaign (GTGC) rallies. GTGC is a real grass roots charitable group inspired by the Stephen Lewis Foundation.

Some of the the women pictured on the GAN website might be surprised to find their images are being used to lobby the government to change obscure laws so that certain copycat drug makers are less troubled by regulation.

Lobby hard ladies, lobby hard. Nice web site, do that yourselves?

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Unintended Consequences

After more than 40 years of messing with Canada's Patent Act, now reset to international standards, it is reasonable to ask what all of this has achieved. Here are three points to consider:

  1. Canada has some of the most expensive generic drugs in the world (and some eye-popping prices for brand-name medicine too).
  2. The level of Research & Development in pharmaceutical drugs, by some accounts, is at it's lowest since 1987.
  3. Only some sectors of Canada's drug manufacturing sectors are strong and healthy.

Teva Canada, formerly NovoPharm, is now a subsidiary of the world's largest generic pharmaceutical company. Apotex is a privately held Canadian company that is also one of the world's largest manufacturers of generic drugs.

Sandoz Canada, which supplies most of the injectable generics for hospitals in Canada has faced some challenges recently.

drugPricesFall (6K)

In Canada, provincial governments and company sponsored benefit plans pay for almost all the prescription drugs used in Canada. A simple pricing model has been in place when deciding what is a fair price to pay for generic drugs. This is typically a percentage of what the equivalent brand name medicine costs.

In the past, that threshold has been as high as 70%, but it's falling now, and falling fast. It is scheduled to drop to as low as 20%.

This might seem reasonable for most generic tablets. It might even be profitable for the companies that still make them. But it is certain to distort any free market that may have existed, or might develop.

A case study

The cost of the generic injectables that I buy in the Netherlands are close to 40% of the price brand name product in Canada. Now look at the situation Sandoz Canada is in.

Imagine your largest customer giving notice that they will not buy your product unless it is a ¼ of the price of the competition; a competitor, whom until recently, had a market monopoly.

Meanwhile, the Brand-Name company slowly tweaks the price of their product until the competition is bankrupt or gone, which is feasible with a government regulated 400% price advantage.

Hands up all those who think this is a great way to manage prescription drug costs and foster the development of a Canadian pharmaceutical drug industry?

Sandoz must be tempted to close up shop in Canada. It's a public relations nightmare for them, because you're damned if you do, and damned if you don't.

Drug advice from the legendary Tony Montana

tony_montana (15K)dialog

HEY -- the BIG money is in pushin' pills. Cheap to make, big profit margins, easy to bait litigate, switch, and smuggle export.

Those injectables? Fuhggedaboutit. Complicated. Attract too much attention if somethin' goes wrong, or somethin' gets dirty.

And those junkies and their doctors have more god damn lawyers than we have!

Stick with the easy money. Stick with the friends you got.

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How did we get into this mess?

The pricing model used for purchasing generics in the past has been open to all kinds of abuse: kickbacks, price fixing, political lobbying, and bogus public relations organizations.

There are some good studies available that explains how Canada acquired some of the highest generic drug prices in the world.

A 2006 report by the Competition Bureau of Canada details how Canada's Big Pharma players structured a pricing and supply chain regime that rewarded a pharmacy almost twice the profit for substituting a generic medicine in place of a brand name product (Table 8, pg. 30).

Another report, sponsored by the Health Council of Canada and prepared by the SECOR group, does a much more professional job here in explaining how Canada's Big Pharma oligopoly pulled off one of the greatest swindles in Canadian history; all perfectly legal.

Of course, that is just my opinion. Some may argue otherwise.

A study by Norton Rose charts the tortured evolution of Canada's Patent laws over the last 89 years. Laws that have been repeatedly changed and are still under pressure to change.

They created laws that have, at times, blatantly discriminated against one form of intellectual property, the pharmaceutical patent, and not others.

They passed laws that have favoured a domestic industry by exempting it from fair market licensing and practices; and telling us it would make Canada's health care system be more affordable and innovative. The reality is exactly the opposite of what was promised.

The Norton Rose report concludes (in part)…

… as Canada moves toward building its economy through innovation, it should seek to strengthen its protection of intellectual property rights.

Canada's shameless manipulation of the Patent Act over the last 40 years has:

  • Reduced research and development in pharmaceutical medicines in Canada to its lowest level in years.
  • Enriched a few individuals at the expense of many

This would not be the first time that government efforts to regulate, stimulate, and manage the economy has had exactly the opposite effect of those noble intentions. It won't be the last.

Long term thinking

One thing the Norton Rose report fails to mention (and maybe should) is that some countries actually allow pharmaceutical patent extensions, under certain circumstances, in recognition of the time and costs involved in bringing a pharmaceutical product to market. Australia, Japan, Korea, Israel, the United States, and many of the member states of the European Union allow this.

Patent extensions do not automatically mean higher drug prices. They provide an incentive to lower the initial price of a patented drug (with an increase in sales because of the lower price) owing to a longer period allowed for cost recovery and investment returns.

If Canada wants to attract the best innovators, then it should have laws that protect their inventions instead of allowing others to cannibalize them.

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All of Our Twists (apologies to Charles Dickens)

Research & Development in pharmaceuticals in Canada has taken an interesting twist. It's easy to get the impression that it's the lawyers, not those scientists or doctors, who are leading the way to better health in Canada.

New! Improved! Breakthrough!

Here are a few excerpts from recent press releases or web pages of Canada's leading generic drug makers (emphasis added)…

…leading the way in product development and patent litigation to launch new, lower-priced versions of branded pharmaceuticals for Canadians.

We are pleased that our efforts in litigation have delivered yet another blockbuster to the Canadian generic market.

Here in Canada… we have the highest brand value of products in litigation

Another legal breakthrough … Apotex Inc. is pleased to announce its latest successful patent challenge…

… the first generic manufacturer in Canada to develop, file and litigate rosuvastatin.

…the only generic pharmaceutical company to have successfully litigated the Nexium® patents, bringing the first generic alternative to market 8 years prior to all patents expiring.

…proud to have been the only generic company in Canada to have successfully taken on enormous risk and lead the legal pursuit to deliver a cost saving alternative to Plavix® for Canadians

The Big Pharma PR challenge

Imagine that you have developed a product and, after 8 years of costly clinical trials and regulatory submissions, it is finally approved for market.

You have a patent but the time is running out. Others will be able to copy the product easily because you had to disclose all relevant information for the patent application and the regulatory approval.

Your product will save lives. People, quite literally, will NOT be able to live without it (unlike anything Apple, Microsoft or Xerox has patented and sold over the years).

How do you price the product to recover the costs and make a decent return? And consider the high risk taken to develop it. There are many failures in the business. How do you price something like this without appearing to be so greedy that governments slap you down and regulate you even more?

That must one of the greatest public relations challenges that exists.

Measuring Corporate Social Responsibility

The Access to Medicine Index (AMI) is a Non Government Organisation (NGO) that measures corporate social responsibility of the Big Pharma players. It does a good job. You may be surprised.

Access to Medicine Index has a number of salient points:

waldo (8K)
  1. Their web site is elegant and informative.
  2. AMI has no funding from the Big Pharma players it evaluates.
  3. AMI does not rely on any funding from the Harper Government™ which would cut any funding if it had the chance.

The AMI has invited Canada's two largest generic drug firms, Apotex and Teva to participate in their assessment, apparently without without much success.

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Canada's Big Pharma Oligarchs

Canada has a unique blend of Big Pharma. Although the usual suspects (those that sell the expensive patented drugs) are well represented, Big Pharma in Canada means generic drug manufacturing, supply chain management and drug retailing.

There also seems to be cutting edge talent in libel litigation, settlement evasion and patent infringement.

The owners are well represented on Canada's list of billionaires (or seriously rich people). Half are in manufacturing, the other half in retailing. Only two own NHL hockey teams, and only one has been banned from being a director of a publicly traded company.

This good ol' boys club includes the bosses/owners of the largest generic drug companies and the largest privately owned pharmacy chains in the country.

Not included in the above list is Shoppers Drug Mart, the largest single drug store chain in the country (1,241 stores). Shoppers is a publicly traded company now, so there is more information available on how it works and, by proxy, how the industry works as a whole.

Prior to becoming a public traded company, it was owned Imperial Tobacco, the largest drug dealer tobacco retailer in Canada. 'Nuff said.

The new War On Drugs - Just say NO!

Almost two years ago the government of Ontario said NO to those so called professional allowances, a fancy name for a manufacturer's rebate.

The war got ugly. There were death threats made. Security detail was assigned for a time. Doors and locks were added. Still, the lawyers and their process servers managed to get through.

These days, before you can reach Stevenson’s office, in a nondescript government building in midtown Toronto, you have to make your way through two sets of locked doors, a security measure recommended by the police. If anyone tries to barge into her office… she can press the panic button under her desk. She nearly did so last May, when a man made it past her secretary and entered her office, unannounced.

He turned out to be the server of a lawsuit--just one of the many she received after she accused some industry players of using a variety of ploys to enhance their revenues. "I’m always a little on my guard," she says. "There’s so much anger directed against me."

Kenney Rogers -- Just Dropped In (again)

Now the same government (and the courts) are saying NO to drug store chains substituting their own house brand generics in place of what the doctor ordered. This is hurting some of the biggest drug dealers in the country.

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Do me a favour? Stop saving me money!

Meanwhile the Patented Medicines Review Board (PMRB), established by Parliament in 1987, keeps an eagle eye lookout for those over-priced patented medicines. From their web site/media links…

That works out to about $6 million/year. The PMRB budget for 2011-2012 is almost double that. Meanwhile, the price Canadians are paying for Made-in-Canada generic drugs is significantly higher than in other countries.

It might be time for a Patented Generic Medicine Prices Review Board. But if history is any example, it would probably be another huge waste of money.

Where have all the flowers gone?

The independent pharmacist with their own drugstore is becoming an endangered species, being replaced just as quickly by the brand name chain store. Since the government made those rebates (or whatever they call them now) illegal, some indie's have seen their income cut by 75%. They didn't even see it coming.

Meanwhile, the collective net worth of Canada's Big Five Pharma drug lords (all self-made mega-millionaires) has climbed to over $10 BILLION.

Asleep at the wheel

What is so remarkable about all of this is that Canada's Competition Bureau is very aware of the fact that generic drugs are much more expensive than they should be, and how they came to be that way.

Why was nothing done at the federal level to stop this blatant gaming of the system? Why are the provinces creating legislation to deal with the problem?

It should be noted that it was the U.S. Food and Drug Administration (FDA) and not Health Canada, that raised quality control issues with Apotex and Sandoz Canada. Our own agency, Health Canada, may or may not be doing a great job here, but laying off people there to save money may not be such a good idea.

Government in action?

Budget Cover 2012a (4K)

A few highlights from the recent federal budget:

  • pharmaceutical dispensing fees will now be exempt from GST.
  • 700+ jobs cut to Health Canada including 100 fewer food inspectors

But the government has a backup plan. For instance, if there are any labeling problems with food, the customers can complain directly to the food companies. The government plans to set up a web site.

That should be a BIG help.

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A Tale of Two Cities

It was the best of times, it was the worst of times.

While the government's "tough-on-crime" agenda has being making the headlines, Canada's tradition of kid glove treatment for its white collar criminals continues.

BenAissa (2K)conrad6 (9K)

Ben Aissa, former VP of SNC-Lavelin, was arrested in Switzerland on fraud and money laundering charges. The RCMP raided the offices SNC-Lavelin in April after a wake-up call warrant request from the Swiss authorities.

Conrad Black is allowed to return to Canada (and keep his Order of Canada award) even though he is no longer a Canadian citizen and is a convicted criminal.

The high tolerance for white collar crime is also evident in Canada's pharmaceutical industry. Canada's own Competition Bureau has documented the price fixing that has occurred in the industry. In Canada, that means defrauding the government.

But that's a problem for the provinces; not the federal government.

KeystoneKops (27K)

The contrast between Canada and the US is like night and day. In the US, Big Pharma fears America's Justice Department. They get sued often enough though most lawsuits are settled out of court, without any admission of guilt -- but with a large fine payment for that privilege.

A recent article in the The Economist mentions the trials and tribulations of Johnson & Johnson (J&J), at one time one of the most admired companies for its governance, social responsibility, and return on investment.

America's Justice Department has filed a suit that alleges, in part, that J&J used rebates, grants and other kickbacks to encourage Omnicare, a pharmacy for nursing homes, to recommend its drugs to patients..

The department's lawyers filed their suit in 2010, alleging that J&J made improper payments to boost prescriptions of its drugs. J&J can at least take solace in not being alone. The Justice Department has sued almost every big drug firm.

Billions have been wrung out of drug makers. The firms have been charged with marketing drugs for unapproved uses, paying illegal kickbacks to raise sales, or both, cheating the public-health programmes that foot the bill.

Most suits are brought under the False Claims Act, which since 1986 has encouraged citizens to sue firms that defraud the government. Whistleblowers are fortified not only by righteousness but also by a share of damages. They and the department have forged a model public-private partnership. Since 1986 the team has won more than $30 billion.

Meanwhile, in the Great White North…

BobAndDougMackenzie (10K)

The similarities of the allegations by the US Justice Department and the findings of Canada's Competition Bureau (2006) are striking.

But it's hard to imagine anything like this kind of legal action happening in Canada. Politicians here get served with a libel litigation notice when they try something like that.

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OpenCorporates (31K)

Open Government - Canadian style

tonyClement (2K)

Tony 'gazebo' Clement, Canada's Treasury Board Minister, stated that he cannot release the details of job cuts outlined in the recent federal budget until 2013. He made this announcement while attending an Open Government conference in Brazil. It was not clear if the minister was suffering from a sense-of-irony deficiency at the time, but it appears to be a chronic condition.

Canada is one of 53 countries that has signed the Open Government initiative. Since Mr Clement's return from Brazil, it has been reported that Statistics Canada is expecting 2000 job cuts. Others expect about half of the 2500 government economists will be cut.

PeterKent (5K)dialog

Peter Kent, Minister for the Environment, and a former journalist, has defended the muzzling of Canada's scientists as an established practice.

Mr. Kent had the honour of announcing Canada's withdrawal from the Kyoto Accord, so he is familiar with telling others what they can do with their international agreements. I look forward to the day when Mr. Kent explains to Canadians that Open Government is simply not politically or economically sustainable.

And corporate accountability?

The graph on the right is from OpenCorporates, a Britain based lobby group that ranks countries for corporate accountability. It appears Canada has some room for improvement.

Canada also signed the OECD Anti-Bribery Convention in 1999, but as Transparency International reports there is little or no enforcement against foreign bribes paid by Canadian businesses.

A secretive government naturally spawns secretive businesses. Fraud becomes easier and law enforcement becomes more difficult. It's a dysfunctional system. Canadians are being swindled by their own drug cartel. The feds know about it but look the other way because it's the provinces who have to pay.

- 15 -

Sunshine for better health

This curious form of government we call democracy is about including everyone. Good government is NOT about about a bunch of elites talking about jobs, growth, or long term prosperity.

Good government is about governing - upholding the rules and making reasonable laws that we can all live with. It's about being open and honest and giving all voices a chance to be heard. It's about respect for the ideas, rights, and responsibilities that we are all entitled to and that we are sometimes burdened with.

Some governments are better at this than others. It's time to take Open Government seriously. It's time to change direction.

Less regulation, More innovation

Canada has a public health care system. There is no getting around that. We don't have a catchy name for it, like ObamaCare, but it's been there longer. Yet we pay some of the highest pharmaceutical prices in the world and have fostered a drug oligopoly that Pablo Escobar would be proud of.

We need a new plan, a national plan, and one that works with what we have. In Canada, the feds collect the cash, but the provinces do all the admin and pay the bills.

Managing prescription drug costs by legislation has failed. The feds have endlessly tinkered with patent law but do little about abuse and the gaming of the system. The provinces pass piecemeal laws to correct misbehavior in the marketplace and then legislate price caps, which may simply entrench the established pharmaceutical drug cartel and drive the legitimate competition away.

Open for business

Canada has ½ of 1% of the world's population. It's a small country in a big world. Chances are we will never be a powerhouse in developing new blockbuster pharmaceutical products, but we can do a much better job at being a smart drug shopper.

Canada imports far more pharmaceuticals than it exports. On a per capita spending basis, we are #2 in the world. Generic drugs are manufactured all over the world. There is absolutely no reason why we need a Buy-Canadian generic drug policy. It does not work.

An Open Medicine Cabinet

Let's begin with our dealings on the pharmaceutical patent. It's time to respect and protect what those inventors invent. The best thing about the ugly patent caterpillar is that it eventually morphs into a butterfly. And the butterflies are free. We could do much better managing our own butterfly collection (while protecting our own caterpillars).

We have the knowledge and resources ready to create a world-class supply chain management system for our national medicine cabinet. It takes smart people to find the medicines and the alternatives, smart people to test them for purity and quality, and lots of people Medicine_cabinet (43K) to administer, watch and judge that these medicines work as expected. Those people are already there, across all the provinces, in the universities; in the hospitals, in the clinics, the doctor's office and in the local drugstore.

An Open Source Government

We need leadership to pull all these resources together, to assemble and develop the knowledge systems that give Canadian the best information from around the globe, so we can make the best long term decisions.

We need leaders who will work with and encourage the real innovators in pharmacy and medicine, be they universities, hospitals, family doctors, pharmacists, or even those drug manufacturers. We need leaders who will stand up for real Canadians and not the business interests that have been writing the scripts for so long.

Good government doesn't have to cost much. Capable and qualified people will step forward and volunteer for public service if they know it might make a difference. Many are retired and no longer beholden to any paymasters. They have grandchildren they love dearly, and they still want to make the world a better place, just like they did when they were young, stupid and in love.

Do some research. Get involved. Help out where you can. Promise to vote in next election. Make a difference.