Speech to the DIA Conference

Tuesday, November 18, 2003

Check against delivery

Thank you for the opportunity to be here with you today to talk about some of the challenges we are all facing as we work to ensure public access to safe and effective drugs.

I am always happy to meet with colleagues to discuss our common interest in health.

As you know, Commissioner McClellan and I today signed a very important agreement that marks a new and greater level of collaboration between our two agencies that respects our laws and recognizes the sovereignty of our two countries. Commissioner McClellan and I share a mutually high regard for the critical role of each other's regulatory systems in the evaluation and monitoring of therapeutic products. In fact, the MOU we signed today explicitly recognizes this. This agreement is good for Canadians because, by sharing information with the US, we will support each other's ability to ensure timely access to safe, effective and affordable therapeutic products for our citizens.

If there is one thing we both know as we meet here today, it is that, even as we seek to define and address these challenges, the environment in which we are working is changing.

Change has become the watchword for government and non-government organizations alike, and change management, that ubiquitous phrase, is in large measure the business we are all in and the reason we are here today.

The forces of change for our country and its institutions - including the regulatory system - are well known and include everything from rapid advances in science and technology to the changing roles of citizens and consumers, who want more engagement in decision-making, and more recognition of their right to make their own decisions about their health care.

In particular, the rise of non-communicable chronic disease is a disturbing phenomenon. In Canada we face an increased prevalence of lung cancer among women and of obesity and diabetes in the Canadian adult population. The WHO predicts these types of chronic disease will account for 80% of the global burden of disease by 2020.

Globally, infectious disease trends are also a cause for concern:

• More than two dozen new infectious agents have been identified in the last 30 years - almost one per year.
• There are more than 36 million people living with HIV/AIDS worldwide - 50% more than predicted a decade ago (and I would add that Canada was the first country to commit to provide safe and effective drugs to African nations to assist in addressing these types of problems); and
• The WHO has pointed out that drug-resistant pneumonia, TB and malaria are also on the rise.

Drug pricing is clearly an issue in the United States. At the same time, the economic pressure on our health care system in Canada has never been as obvious. The health spending item experiencing the greatest growth is that of pharmaceutical products. In 2002, prescription medication represented 13 % of all health spending, a 9 % increase over the previous year. However, new therapeutic products not only promise better health for Canadians but are also present excellent economic potential.

As we work in a more complex environment, however, we also recognize the unique nature of Canada's health care system and the unique place it holds in the hearts and minds of Canadians. The concept of universal access to high quality care is something Canadians deeply believe in. Our health care system is a defining characteristic of who we are as a nation and what we value as a people.

Let me point out some practical differences that make the Canadian system unique in comparison with the US and that go directly to the issue of drug prices that Dr. McClellan has raised.

There are many reasons for differences in drug prices between Canada and the US. These include differences in national income- we know that industry will "price-to-market"; bulk purchases by government agencies in Canada; exchange rate fluctuations (drugs in Canada have become 20% more expensive relative to the US in the past year alone); and limits on direct-to-consumer advertising in Canada.

On the issue of advertising, let me share some facts about industry spending in the US that are directly related to the issue of costs there. According to the US General Accounting Office, industry estimates for 2001 indicate that the American pharmaceutical industry spent $30.3 billion on pharmaceutical R&D and $19.1 billion on promotion, including $2.7 billion on direct-to-consumer advertising. Between 1997 and 2001, DTC spending in the US increased by 145%, compared to an increase in spending on R&D of only 59%. Expenditures on promotion by the US pharmaceutical industry are equivalent to 12% of drug sales in the US. I think these figures speak for themselves and cast some much-needed perspective on the nature of drug costs in the United States.

As we talk about comparisons with other countries, I think it is useful to point out that, according to the Patented Medicine Prices Review Board's 2002 Annual Report, the prices of patented medicines in the Canadian market were about 1% higher than the median of foreign prices in the seven countries used for price comparison purposes - the U.K., Switzerland, U.S., Italy, France, Sweden and Germany. As in previous years, U.S. prices are substantially higher than prices in Europe and Canada. Further, Canada's pricing controls are in line with those in almost every other country. The US is, in fact, the exception here.

Another aspect of the Canadian health care system that makes it unique is the partnership it demands between federal and provincial governments, health institutions, providers and citizens.

At the federal level, we have a broad mandate to help Canadians maintain and improve their health.

The provincial and territorial governments are responsible for managing and delivering those insured health services, including

• provision of hospital care, physician and allied health care services,
• regulation of physicians, pharmacists and other health professionals and
• management of public prescription drug plans.

It is clear that the overriding concern for Canadians and their governments today and the key driver underpinning reform of Canada's health care system is access.

The issue of access is particularly profound for my organization, the Health Products and Food Branch, which is Canada's authority for the regulation of health products and food. The scope of our work is significant: there are over 22,000 human drug products and 40,000 medical devices on the Canadian market today. As technology and scientific expertise advance at an unprecedented rate, the number of biologics and genetic therapies - such as blood products and vaccines -- continues to grow, with more than 400 now available to the public through Canada's health care system. Our mandate as the country's regulatory authority is to review this vast range of products for safety, quality and efficacy prior to marketing, and to monitor their use for health risks and therapeutic effectiveness once they are approved and being used in the marketplace.

Over the last dozen years, the pace of scientific discovery has accelerated dramatically. A series of technological advances in disciplines as varied as spectroscopy, robotics and computing have enabled the mapping and modifying of genetic information, an area in which Canadians are doing cutting edge research. As technologies evolve, they will affect the economy and society in fundamental ways.

The challenge for governments and, I would strongly suggest, for industry, is to ensure that citizens can benefit from the opportunities created by new knowledge and technological advancement, particularly through better health.

The Canadian government's desire to meet this challenge could not be greater. Since 2000, the Prime Minister, provincial premiers and territorial leaders have been cooperating in implementing a vision and an action plan for renewing the health care system in the 21st century, which will allow Canadians to continue to have timely access to quality health care and will make Canada a world leader in health sciences and biotechnology.

Most recently, in February 2003, First Ministers agreed on the Accord on Health Care Renewal which, among other things, identified as a priority further collaboration to ensure that drugs are safe, effective and accessible in a timely and cost-effective fashion. This included collaboration on promoting optimal drug use and best practices in drug prescription, and on ways to better manage the costs of all drugs, including generics.

Just as important, the government has moved forward with a smart regulation strategy to accelerate in reforms in key areas to promote health and sustainability, to contribute to innovation and economic growth, and to reduce the administrative burden on businesses. In other words, we will work to protect health and the environment while promoting innovation and investment and ensuring strong public confidence in the regulatory system.

A key part of the Government's smart regulation strategy is the commitment to speed up the regulatory process for drug approvals to ensure that Canadians have faster access to the safe drugs they need, creating a better climate for research on drugs.

HPFB has already established a strong base on which to model further regulatory improvement. We've made significant progress in developing flexible, risk- or standards-based regulatory frameworks such as those we implemented several years ago for medical devices.

And we are putting in place innovative, new - and in some cases world-leading - regulatory frameworks such as mandatory safety standards for cells, tissues and organs for transplantation, Natural Health Products Regulations and nutrition labeling regulations.

Our flagship initiative - and our response to the Government's commitment to improve the regulatory process for drugs as well as its commitments related to pharmaceuticals management under the Health Accords - is the Therapeutics Access Strategy or TAS.

TAS is delivering on three objectives:

1. to improve regulatory performance, including timeliness of reviews and transparency, benchmarked against leading international practices while maintaining our high standards of safety;
2. to exercise greater vigilance on safety in real world use through post-market surveillance and risk communication; and
3. to improve access to therapies and contribute to the long-term sustainability of the health system and, ultimately, better health outcomes for Canadians.

We are now well under way with initiatives to improve performance, and we are already seeing payoffs through, among other indicators, a reduced backlog. We are going to meet performance targets on the timely review of submissions by 90% within three years for pharmaceuticals and within four years for biologics and genetic therapies.

Over the medium term we will make more dramatic changes. Ultimately, TAS will address the full range of influences on access to therapeutic products, including research and innovation; clinical trials and other steps leading to market authorization; inspection and compliance; post-market safety and therapeutic effectiveness; appropriate utilization and prescribing; price; cost effectiveness; and drug plan management.

To support the ability of Canadians to ultimately benefit from advances in science, we are taking a more fundamental look at how we can best enable health innovation. This includes earlier engagement with industry, patient and consumer groups, and other stakeholders in drug development to improve the predictability and efficiency of the regulatory review process for clinical trial applications and new drug submissions.

Our industry partners have been invited to be an integral part of this dynamic. The multiplicity of factors that affect the access of citizens to therapeutic products are, in many cases, influenced as much if not more by the actions of industry than they are by governments. For example, we know that many cutting edge therapies available in other parts of the world are either very slow in making their way into the approval process in Canada or may not come at all. While there is much that the Government of Canada can and will do to provide a regulatory environment that encourages industries to bring their innovations to our doors, industry must also, I believe, fully embrace its fundamental role as our partners in improving public health.

Another key area of focus is clinical trials. Following extensive consultation with stakeholders, we implemented new Clinical Trial Regulations which will shorten the time required for the review of applications, ensuring that Canadians have improved access to innovative therapies. In August, HPFB hosted an international technical workshop on regulatory issues associated with the development and approval of vaccines and immunotherapy products for SARS which was instrumental in identifying critical issues and in establishing a scientific basis for regulatory decisions concerning clinical testing and licensing. This event was a world first, and its success has led to international recognition of Canada as a leader in this field.

I would like to briefly emphasize an issue that is perhaps less concrete but has emerged as one of the most important objectives of regulatory reform - one that should be of primary concern not only for the government but, I believe, for industry as well - openness and transparency.

We know from extensive consultations with stakeholders, and our own frank assessment of how we do business that our approach does not yet meet expectations in this area. While industry, consumer and patient groups and individual Canadians are more involved than they have ever been in Canada within our regulatory system, work remains to be done on making the cultural shift within the system that results in transparency and engagement being recognized as an integral part of how we do business. And as we do this, I want to emphasize that we will also be looking to industry to play its part in making that shift and achieving the level of transparency patients, consumers and the general public now expect.

In order to support the objectives of the Therapeutic Access Strategy, we are also strengthening the tools that we need to define our role as a modern and innovative regulatory organization that contributes to the advancement of public health in Canada.

We are working on modernizing our legislative base, which dates back 50 years. An in-depth examination of Canadian health protection legislation is underway with a view to introducing a new system that is better suited to the realities of modern technology and a modern society. We are, among other things, addressing obstacles to improved performance, such as a lack of appropriate resources - both human and financial - for performing our duties.

Given the context of our meeting here today, I'd also like to emphasize the significant investment we are making in improved regulatory cooperation with our colleagues around the world.

HPFB's role as a member of the international community of regulators is fundamental to achieving our objectives, and I believe strongly in the importance of international cooperation to share information, create efficiencies and to improve access to products and services, not only for Canadians but for citizens around the world.

Health Canada has, for example, been very active with the ICH and we are also partnering with Australia's Therapeutic Goods Agency on a pilot project for joint submission reviews, and with the UK's National Institute for Biological Standards and Control to improve information-sharing on research and testing methodologies. These types of collaboration hold promise for expediting approval processes in many jurisdictions and help us to identify and implement regulatory best practices.

And, of course, we continue to work closely with our neighbours, the U. S., and, via trilateral meetings with Mexico, on many aspects of our work.

I'm very pleased to note that Dr. McClellan and I today signed a Memorandum of Understanding between the United States Food and Drug Administration and Health Canada's Health Products and Food Branch that will allow even closer collaboration and information-sharing on public health issues of importance to both countries. Our goal is a more efficient therapeutic product evaluation process that allows faster public access to important new therapies, and quicker identification of risks associated with marketed health products.

Initially, our collaboration will lead to a better understanding of decisions taken by the two regulatory authorities, enable the exchange of information related to the review and evaluation of investigational and marketing applications, and improve the ability to share information related to enforcement activities and product investigations, such as cross-border issues involving the sale of counterfeit drugs. As well, we're looking at early stage cooperation to improve the predictability and efficiency of the regulatory process for new therapeutic advances, such as cell and gene therapies and medical technologies.

We are now in the process of developing a concrete action plan, based on the MOU, which will be announced shortly. Our mutual commitment is to support each other in improving access to safe and effective therapeutic products in our respective countries.

I could not come here today and talk about international co-operation with the US without addressing an issue that is very much in the headlines in both our countries - cross-border or international Internet drug imports, more commonly referred to as Internet pharmacies. This is an issue that goes to the heart of the uniqueness of our two systems and some of the fundamental health care issues I've touched on today, like safe and affordable access to drugs for all citizens.

I want to say that I respect the concerns raised by Dr. McClellan today. Like the FDA, our primary concern is the health and safety of our citizens.
But it is also important to note that Dr. McClellan himself has acknowledged that many of the problems he has referred to today fall within the mandate of his own organization to address.

As late as October 20, Dr. McClellan noted in a speech that, in his view, it was not appropriate for US federal and state governments "to try to foist off the responsibilities for a safe and affordable drug supply for Americans on the government of a country that is a tenth of our own size."

Having said that, Canada is doing its part. I recently wrote to my colleagues in the provinces and territories, highlighting that we have a role to play in ensuring that our respective regulations and legislative authorities are respected within our jurisdictions.

With respect to Dr. McClellan's remarks about the safety of Canadian drugs coming to the US, Health Canada actively investigates any information brought to our attention. If any Canadian laws have been violated, Health Canada will take necessary measures to protect the health and safety of Canadians. The US FDA has an obligation to enforce its own laws.

It is important to note that drugs imported into this country, be they destined for domestic consumption or for subsequent re-export, cannot lawfully enter Canada without having complied with the requirements of the Food and Drugs Act and Regulations. It is our responsibility to ensure this is so. It is also important to note that my regulatory counterparts in the U.S. have the same responsibility to ensure that drugs entering the American market do not violate any of their laws or regulations.

In Canada, we have a rigorous drug review system, and one of the best safety records in the world. As we work with our American colleagues on the MOU, our goal will continue to be to ensure that Canadians have access to products that are safe and effective.

I'll end my remarks as I began them - recognizing that the challenges before us are as complex and as daunting as they have ever been.

Having said that, I am consistently encouraged by the high level of confidence that Canadians show in our capacity to do our jobs. We know that Canadians express significant confidence in the safety of the drugs and foods available to them, and that there is a high level of public trust in Health Canada's capacity to deal with public health emergencies like SARS.

Further, the strong interest that international regulatory bodies have shown in working with us reflects, I believe, the high regard in which Canadian policies and practice in many areas are held by our colleagues around the world.

In short, daunting though our challenges may be, I think we are well placed to meet them and that we have, in fact, already taken many significant steps toward transforming our regulatory performance, building new relationships with our stakeholders and citizens, and contributing to improved health outcomes for Canadians.

Events like this are of major importance in helping us in this process. I am very much looking forward to taking part in the discussions here today and learning from them.

And finally, I thank our esteemed colleague, Dr. McClellan for being with us here today. It has been a pleasure to host the DIA in Canada for the first time.

Thank you. Merci.