National Newswatch
National Opinion Centre

The federal government is changing the price review regulations of the Patented Medicine Prices Review Board (PMPRB), the tribunal that ensures prices for patented medicines sold in Canada are not excessive. After two postponements, the change is due to come into effect on July 1, 2021. The new rules will have several consequences, including reducing Canada’s attractiveness as a country in which to perform clinical research trials.

Trying to allay concerns about the impact of the changes in its regulations on research investment in Canada, the PMPRB released a Twitter post in February stating that the total number of late-development-phase clinical trials approved in the second half of 2020 was in line with prior years. However, trials funded by manufacturers were not separated from those sponsored by other sources.

The tweet appeared to be intended to counter an earlier analysis showing that the number of late-phase, manufacturer-funded trials approved in the first half of 2020 was 25 percent less than the average number approved in the first six months of each year between 2015 and 2019. Trials were identified from Health Canada’s clinical trial database.

Manufacturer-funded trials were the focus of the analysis because they represent private-sector investment. Only trials approved between January and June in each year were included because many trials approved between July and December in 2020 had not been posted in Health Canada’s database by January 2021 due to a known lag of five-to-six months in posting information.

An implication of the PMPRB’s February tweet was that the delay in posting trials had been eliminated in just four weeks. This turnaround is remarkable, especially with the COVID-19 pandemic significantly reducing the effective federal public service workforce for much of 2020. When many other government services required by Canadians have been unavailable or delayed, Health Canada’s clearance of its backlog in posting trial data is extraordinary, although obligingly helpful to the PMPRB.

Nevertheless, the improvement in the timeliness of posting trials in the database provided the opportunity to perform a new analysis drilling down to manufacturer-funded clinical trials approved in each full year between 2015 to 2020. The results show that the number of late-phase trials of non-cancer medicines in 2020 is, as found previously, 25 percent less than the corresponding number in 2015.

Trials of COVID-19 therapies and vaccines increased the number in 2020 and are an anomaly. When these are excluded, the number of late-phase, manufacturer-funded trials of non-cancer medicines in 2020 is almost a third less than in 2015.

Analyzing private-sector trials by development phase is crucial because investment is much greater in late-phase trials than in earlier phase studies. Much of this investment is for the provision of medicines tested in the trials. For example, the value of drugs provided in manufacturer-funded trials completed in Canada in 2016 was more than 1.8 billion dollars (86 percent of total costs). Medicines given to patients in clinical trials provide a significant saving to the health care system.

In addition to investing in the trial, developers incur the expense of supplying a medicine to trial participants between a trial’s end and the drug’s coverage by the health care system. The reason: the Declaration of Helsinki places an ethical responsibility on manufacturers to “make provisions for post-trial access for all participants who still need an intervention identified as beneficial in the trial.”

With the enormous investment required, late-phase trials are usually only performed in Canada when developers intend to launch new medicines here.

Most pharmaceutical companies in Canada are affiliates of multi-national businesses, which means they must compete with affiliates in other countries for a finite amount of global research money. If Ottawa’s actions result in the Canadian market being viewed with uncertainty by international pharmaceutical businesses, research investment will go to more collaborative countries. The lack of investment in COVID-19 vaccine development in Canada has unambiguously demonstrated this fact.

Analyzing numbers of manufacturer-funded clinical trials only provides one aspect of trends in private-sector pharmaceutical research investment. Further investigation into how and why developers invest in Canada and the benefits of such investment is required.

The impact of the PMPRB’s new rules on research investment should be monitored. But not by the PMPRB, which currently plans to “self-audit” the effects of its own regulatory changes. The role should be performed by an independent organization external to government or at least by the Auditor General. The PMPRB’s superficial and deceptive February Twitter post demonstrates why external oversight is needed and why the Board should refrain from self-appraisal on key issues.

The federal government will begin a risky experiment in public policy in July that will severely regulate the prices of new medicines and vaccines and intensify the negative impact on the level of clinical research in Canada. Canadians should be aware of the consequences of the changes in the PMPRB’s rules at a time when innovative medicines are needed more than ever to treat cancer, rare diseases, and life-threatening infections.

Nigel Rawson is an independent researcher and affiliate scholar with the Canadian Health Policy Institute.

The views, opinions and analyses expressed in the articles on National Newswatch are those of the contributor(s) and do not necessarily reflect the views or opinions of the publishers.
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