The Fraser Institute

The Fraser Institute

March 15, 2007 06:00 ET

The Fraser Institute: Canadians Waiting Longer Than Europeans and Americans for Access to New Medicines

TORONTO, ONTARIO--(CCNMatthews - March 15, 2007) - Canadian patients are waiting longer than Americans and Europeans for access to new medicines due to slow government approval processes, according to a new study by independent research organization The Fraser Institute.

"The approval process at Health Canada is inefficient compared to other countries," said Brett Skinner, the Institute's Director of Health, Pharmaceutical and Insurance Policy Research and author of Access Delayed, Access Denied.

Skinner notes that Health Canada has followed the American approach to drug approval, yet it has far fewer resources and less than 10 per cent of the staff of the U.S. Food and Drug Administration. On the other hand, drug approval agencies in European countries have fewer resources than Canada yet manage to consistently review and approve drugs in a timeframe similar to the U.S.

"Canadians are waiting an extra two to three years for new medicines when you add up the total time it takes for the various federal and provincial government agencies to make up their minds on approving and paying for a new drug," he said.

Skinner's report shows how delays at three separate stages of the approval process are contributing to the problem: Health Canada, which must certify a drug is safe and effective for public use; the Common Drug Review, a national agency, makes recommendations on whether a drug should be eligible for reimbursement from public drug plans; and provincial governments, which finally decide if a drug will be covered by public health plans.

He calculates that in 2005 Health Canada took an average of 397 days to approve a new pharmaceutical and 633 days to approve a new biological medicine. The Common Drug Review adds another 257 days for pharmaceuticals and 186 days for biological drugs, with final provincial approval adding 201 days for pharmaceuticals and 187 days for biologicals.

"The result is that even after waiting too long for Heath Canada to approve a new drug as safe and effective, the process is further delayed by provincial governments that increasingly refuse to pay for new drugs or take too long in deciding whether a new drug should be eligible for provincial reimbursement," Skinner said.

In Access Delayed, Access Denied, Skinner spells out four specific policy changes to improve the process in Canada and speed up access to new medicines.
Harmonization-cooperation with other jurisdictions

Take advantage of regulatory knowledge and capacity of other jurisdictions, rather than attempting to duplicate the American process. Health Canada should consolidate resources through sharing data, workload, and processes. If Canada established agreements of "mutual recognition" with other countries, new medications approved in those countries could be introduced to the Canadian market far more rapidly.

User fees

Ensure that Health Canada must meet strictly enforced and appropriate targets before receiving any user fees from drug companies wishing to have their products reviewed. This has reduced delays in the United States.

Competition

Canada should compete with international regulators for the user fees charged to drug makers, on the basis of the time it takes to issue regulatory approval. This has been successful in the European Union where regulators in all participating countries must lift bans on the marketing of the new medicines that are approved by any one regulator.

Private health insurance

Provincial Medicare does not cover drugs delivered outside of hospitals and separate federal/provincial/territorial drug programs cover only about one-third of the population. This non-comprehensive, non-universal system of coverage is inefficient. Coverage under private drug plans is better than the coverage offered under public drug plans.

Unlike public drug programs, private insurance plans do not normally restrict the specific kinds of drugs eligible for reimbursement - so consumer choice is preserved. Instead of rationing, private drug plans rely on premiums and small user charges to successfully control costs. In almost all private plans, every drug that is deemed safe and effective by Health Canada is eligible for reimbursement immediately. Fewer new drugs are covered under public programs and when they are covered, patients wait more than a year longer than people covered under private plans to get access to them.

As an alternative to our current health and drug programs, Canada should introduce a competitive market system of universal compulsory private health insurance that comprehensively covers all types of health treatments - including drugs. Under such a system, public subsidies would guarantee that low-income people could afford to share the superior benefits of private health insurance plans. Countries like Switzerland achieve universal health insurance coverage for their people more efficiently with similar approaches.

"Drugs are a prime example of a medical technology that is often more efficient than other health treatments such as surgery," Skinner said. "But as a result of excessive bureaucracy, government duplication, and a lack of comprehensive insurance coverage, patients are either blocked from obtaining new medicines or the costs are made prohibitive. The end result is that Canadians are either forced or encouraged to opt for treatments that can be less efficient at treating their health conditions. And in the long run, this could end up costing everyone more."

The Fraser Institute is an independent research and educational organization based in Canada. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.ca.

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