The Fraser Institute: Government Policies and Drug Plans Often Deprive Canadians of Access to New Medicines

TORONTO, ONTARIO, Aug 17 (MARKET WIRE) --
After enduring lengthy waits for the federal government to approve new
prescription drugs, Canadian patients all too often discover that their
provincial drug plans will not pay for these new medicines, according to
a new, peer-reviewed study from independent research organization the
Fraser Institute.

Canada's drug approval process involves two separate stages: First,
Health Canada must certify a drug is safe and effective for public use,
then provincial governments must decide if the drug will be covered by
public health plans. This combination of federal and provincial
decision-making creates delays or, more often, results in new drugs being
unavailable to some patients.

"It takes more than 14 months, on average, for Health Canada to approve
new medicines as safe and effective. And while private insurers will
immediately cover those medicines, the provinces can take up to another
year to decide if they will pay for the same drugs," said Brett Skinner,
Fraser Institute director of bio-pharma and health policy and author of
Access Delayed, Access Denied: Waiting For New Medicines in Canada. The
complete study is available at www.fraserinstitute.org.

"For the one third of Canadians who rely on provincial drug plans, this
puts new medicines out of their reach for up to a year. What's more
distressing is that the provinces often decide not to cover these new
drugs at all."

On average, Health Canada took 453 days to approve new drugs for sale,
while the provinces added another 314 days to approve new drugs for
coverage under provincial drug plans in 2007. This is a significant
improvement from the waits recorded in 2004, when Health Canada took an
average of 839 days and the provinces took 552 days to approve new
prescription drugs, a total of 1,391 days or almost four years.

But alarmingly, the study found that only 10.1 per cent of new drugs
approved by Health Canada as safe and effective in 2007 were being fully
or partially reimbursed under provincial drug plans by the end of 2008.

In Access Delayed, Access Denied, Skinner suggests three specific policy
changes to improve the drug approval process in Canada and speed up
access to new medicines:

Regulatory cooperation with other countries

Instead of attempting to duplicate the new drug approval process of the
FDA in the United States, Canada should take advantage of the regulatory
knowledge and capacity of other jurisdictions. If Canada entered into
agreements of mutual recognition with other countries, new medications
already approved in those countries could be introduced into the Canadian
market far more rapidly.

Consolidating resources through the sharing of data, workload, and
processes would benefit all participating countries.

Performance-based user fees

Establish strictly enforced targets that Health Canada must meet before
the agency receives user fees from drug companies. Currently, these fees
are not linked to performance. By contrast, in return for levying user
fees, the U.S. FDA is required to meet a number of performance goals
intended to speed up drug approvals. Research has shown that establishing
user fees in the United States dramatically reduced drug approval times.

Replace government drug programs with subsidized access to private
insurance

The most economically rational way to ensure that everyone has adequate
drug insurance coverage without unnecessarily delaying consumer access or
restricting consumer choice through central planning is to introduce
means-tested, publicly subsidized access to private insurance for
prescription drugs.

"Research suggests that premium-based financing and consumer cost-sharing
is a better policy approach to achieving cost control, which also
protects patient choice and respects physicians' clinical prescribing
freedoms," Skinner said.

"Most private drug insurance plans have co-payments that encourage
patients to make cost-efficient utilization and substitution choices
regarding treatment alternatives. Consumer sensitivity to prices creates
incentives both for physicians to prescribe treatment efficiently and for
drug manufacturers to invest efficiently in the development of new drugs."

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The Fraser Institute is an independent research and educational
organization with locations across North America and partnerships in more
than 70 countries. 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.org.

Contacts:
The Fraser Institute - Media Contact
Brett Skinner
Director, Bio-Pharma and Health Policy
(416) 363-6575 ext. 224
brett.skinner@fraserinstitute.org

The Fraser Institute
Dean Pelkey
Director of Communications
(604) 714-4582
dean.pelkey@fraserinstitute.org
www.fraserinstitute.org

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