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What needs to change in the Canadian pharmaceutical industry

TORONTO — 2019 was the year of the drug company. And not in a good way.

The year’s headlines pointed to shocking rates of opioid addiction and death, looming drug shortages, class-action lawsuits, fears over climbing drug prices, and concerns about the cozy relationship between drug makers and health-care providers.

CTVNews.ca reached out to a number of experts to talk about what needs to change in the Canadian pharmaceutical industry.

The opioid crisis

Opioid makers and distributors face thousands of lawsuits across North America launched by provinces, states, cities and hospitals that allege the companies knowingly lied about their products and created a public health crisis when people became widely addicted to the narcotic painkillers, with some turning to deadly illegal drug sources in desperation.

The first of those suits went to trial in the U.S. this year but many more are waiting in the wings.

On Dec. 12, Ontario announced it was joining a B.C.-led lawsuit against dozens of opioid manufacturers and distributors, including Purdue Pharma, makers of Oxycontin, as well as other major drug manufacturers, and Shoppers Drug Mart Corp. and its owner Loblaw Companies Ltd. The untested lawsuit also includes New Brunswick, Newfoundland and Labrador, Saskatchewan and Alberta.

There is another $1.1-billion class action underway in Ontario on behalf of more than 2,000 patients that names more than two dozen companies, including some of the biggest players in Canada’s pharmaceutical industry – Apotex, Bristol-Myers Squibb, Johnson and Johnson, and the Jean Coutu Group.

The suit alleges that the plaintiffs became addicted to opioids due to negligence in the development and marketing of the drugs dating back to the 1990s. Among the allegations is that opioid makers paid for studies that falsely said their drugs did not lead to addiction, and then strongly marketed the drugs to doctors who were looking for new solutions to chronic pain.

 “The opioid crisis in many ways is a symptom of a larger problem in the pharmaceutical sector. There are many ways to trade in bias in scientific evidence and then organize marketing campaigns based on selective studies,” said Marc-Andre Gagnon, an associate professor at Carleton University who studies pharmaceutical policy.

“That’s exactly what happened here,” said Gagnon.

In 2018 alone, 4,588 Canadians died of opioid-related overdoses, representing an average of one death every two hours. A federal committee has estimated that 14,000 people have died in the last four years.

Top executives at Purdue pleaded guilty in 2007 to misleading regulators, doctors and patients about the addictive nature of OxyContin and the company was ordered to pay US$634 million in a settlement and fines. Purdue also settled a class-action in Canada for CAD$20 million in 2018. 

“That was nonsense compared to the damage that was caused. There was manipulation of data,” said Gagnon. “They were lying to doctors in essence.”

Purdue, a family-owned company, filed for bankruptcy in the U.S. this fall but under a proposed agreement, will set aside $10 billion to $12 billion for lawsuits. The company is to be restructured as a public beneficiary trust, with the Sackler family giving up any ownership. The proposed settlement also stipulates that addiction treatment drugs being developed by the company would be given to the public for free and any future profits would go to plaintiffs. Under the agreement, the Sackler family will contribute $4.5 billion, but would not be criminally charged. 

Many jurisdictions have said they will not accept the agreement, with some alleging the family has shifted billions in assets offshore in anticipation of the lawsuits.

Oklahoma was the first to go to trial and it recently won a US$465 million judgment against Johnson & Johnson, for its role in selling fentanyl patches through a subsidiary and acting as a leading supplier of the opioid used in Purdue’s OxyContin. Johnson & Johnson vows to appeal the decision. The state had asked for US$17 billion in the case.

Two other companies settled with the state, including Purdue for US$270 million in March.

A separate settlement in Ohio awarded US$260 million to two counties in October.

Johnson & Johnson, Purdue and three other companies have proposed a $48-billion settlement framework to resolve all of the opioid lawsuits they face. In Canada, Purdue is seeking an injunction to halt all litigation until it can resolve its bankruptcy issues in the U.S.

No matter the final tally when all the lawsuits are settled, some experts don’t expect the fallout from the opioid scandal will change much in the industry.

Gagnon says along with selectively choosing scientific evidence and ignoring adverse findings, it’s common practice around the world for drug companies to provide funding to patient advocacy groups that raises questions about the groups’ independence.

As just one example, drug giant Novartis disclosed grants, sponsorships, charitable donations, research collaborations, in-kind services, and other financial contributions totalling more than $1.8 million to 63 patient groups in Canada in 2018.

“If drug companies want to have a big commercial success, they have to build a narrative around their product. There is always a conflict of interest between the science and the sales divisions in a company.”

Quinn Grundy, an associate professor of nursing at the University of Toronto, says the kneejerk reaction to the crisis has been that opioids are bad, without players in the health-care system taking responsibility for their role in the problem. She says many others, including regulators and front-line practitioners, were complicit.

“There has been a tendency to hold pharmaceutical companies to account but there has not been enough drive to hold ourselves accountable for relationships,” said Grundy, who studies the relationship between medical manufacturers and health-care workers.

“I hope the opioid crisis changes the conversation because it resulted in a huge public health crisis.”

But Joel Lexchin, a former emergency doctor, is not optimistic about that.

Drug companies in the U.S. have paid about $25 billion in criminal and civil court judgments over the past 20 years and it hasn’t changed how they do business, he said.

He said it’s been an open secret since the 1980s that these companies were constantly preparing for when they would get caught doing something wrong.

“At least two companies had a position they euphemistically called vice-president in charge of going to jail,” said Lexchin, who is a professor emeritus at York University. “It’s all factored into the prices of drugs and the sales strategies.”

For governments, the opioid crisis has led to some recognition that mistakes were made, said Lexchin, but whether that leads to changes depends on how much oversight they are willing to impose on the prescribing of drugs and the relationship between drug companies and doctors.

“There’s been no real change there. Governments have given over all the power of marketing to the industry,” even though the opioid crisis is a repeat of past mistakes with the aggressive marketing and overprescribing of barbiturates, amphetamines, benzodiazepines like Valium, and antidepressants, he said.

“It all comes in cycles and the next disaster will be just as bad.”

Drug shortages

When the Trump administration said this summer it was considering a system to allow Americans to purchase cheaper Canadian drugs legally, there were fears of a drug shortage north of the border that largely didn’t materialize.

Caravans of Americans made well-publicized trips across the border for cheaper insulin in the early summer but that didn’t affect domestic supplies.

But the real issue around drug shortages is in the supply of generics, which have much lower profit margins than brand names, said Lexchin. About 75 per cent of all prescriptions are filled with generics, but they account for just 25 per cent of overall spending on drugs.

In a quest to drive shareholder profits, drug makers often shift away from the generics for the greener fields of brand names, he said. Aggravating the problem is that raw materials for generics often come from India and China, where there are issues with contamination that lead to interruptions in supply.

Lexchin advocates setting up a Crown corporation that has a mandate to manufacture widely prescribed generics that aren’t favoured by private sector pharmaceutical makers. “The same way we see utilities like water and power as public resources, we should look at prescription medications in the same light.”

Since 2017, drug companies have been required to report anticipated or actual drug shortages or discontinuations to the third-party Drug Shortages Canada website. Actual shortages were reported for more than 1,000 drugs in 2019, including EpiPens and a drug used to treat bladder cancer.

Drug prices

Spending on drugs is the fastest growing expenditure in Canada’s health-care system, according to the Government of Canada. Pharmaceuticals have now surpassed physician remuneration to become the second-largest cost in the health care system, after the operation of hospitals.

Canada ranked third among the 31 countries of the Organisation for Economic Co-operation and Development when it comes to drug prices, at about 25 per cent above the median in 2016, the most recently available numbers. Canada was also third when it comes to drug spending per capita at $1,043.

Which drugs are publicly covered and what they cost changes as you cross the country. Some drug prices are negotiated nationally through the Pan Canadian Pharmaceutical Alliance, but not all drugs are included, and the bargaining power doesn’t extend to private-sector insurance providers. And the most vulnerable people, those without private insurance – estimated to be anywhere from 10 to 20 per cent of Canadians – are paying full price.

The ultimate solution, Lexchin says, is a national pharmacare system with monopoly buying power, but he doesn’t think there is much political appetite for that beyond the NDP. While campaigning in September, Prime Minister Justin Trudeau did indicate his government would support national pharmacare, but he did not offer a timeframe or how much it would cost. 

Ottawa says recent reforms to price regulation for new patented drugs through the Patented Medicine Prices Review Board will mean more than $13 billion in savings for Canadians over the next 10 years. The reforms are being challenged by the pharmaceutical industry, which argues it will damage investment in Canada.

 Transparency of clinical data

After decades of refusing to do so, Lexchin said Health Canada is now doing a better job than any other regulatory agency in the world in disclosing the data of clinical trials when drug makers seek approvals. But analysis of hundreds of thousands of pages of data takes money and expertise, so it’s unlikely anything beyond a handful of highly anticipated drugs will be scrutinized.

“Physicians don’t have access to the full data and the drug companies still choose what to publish,” said Lexchin. “They don’t say anything about negative results.”

That’s why findings that show drugs being tested cause gastric bleeding or an increased risk of heart attack, for instance, are simply not submitted to Health Canada, he said.

“The benefit-to-risk balance is totally out of whack in this system. The cost of researching and developing new drugs is enormous, so the development of new products is about selective ignorance.”

More scrutiny of clinical trial data could have pointed to something like the opioid crisis much sooner, says Gagnon, so regulators around the world are looking to Canada’s system. But there are concerns that if other countries don’t follow suit, it could mean drug companies won’t seek approvals in Canada because they don’t want to publish the data.

Gagnon also points out the new rules are not retroactive, so there are plenty of drugs out there that could still be problematic.

What makes drug monitoring particularly challenging, saysLexchin, is that once a drug is in the marketplace, the population taking it is much more varied than the patient group tested in clinical trials.

“They are often tested on middle-aged men but what happens when an 85-year-old woman taking other medications takes it?”

Lexchin said a big flaw in the current system is that Health Canada puts three to four times as many resources into approving new drugs than it does into monitoring the safety of drugs already being prescribed.

But a Health Canada spokesperson disputes that assertion.

“Canada has one of the most robust drug safety systems in the world,” Geoffroy Legault-Thivierge, a spokesperson with Health Canada, said in response to CTVNews.ca.

He said forecasted spending for the fiscal year 2019-2020 is “approximately the same” for the scientific review process to assess the safety, efficacy and quality of drugs before they come to market and the post-market monitoring to ensure safety once they are being prescribed.

“This forecast is based on a comparison of the resources allocated to the pre-market approval of both prescription and non-prescription drugs with those allocated to the post-market monitoring, signal assessment, and compliance and enforcement activities of these same products.”

Lexchin, who practised medicine for more than 30 years, says full disclosure to patients when they are taking a new drug, along with more prompting that they need to be watchful and report any effects immediately would go a long way to mitigating negative outcomes.

But if doctors rely only on information from drug companies, they won’t know about adverse effects, he said.

The Mediator scandal in France is a cautionary tale, said Lexchin. The diabetes drug was allegedly linked to as many as 2,000 deaths and the French drug regulator, which had a very tight relationship with the country’s drug industry, took a long time to recognize the problem.

Mediator’s maker, Servier Laboratoires, and the drug regulator are now on trial for manslaughter, fraud and other charges in a case expected to take months to resolve.

“There is wholesale recognition that more restrictions are needed on the relationship between the industry and medical professionals, but this trial just highlights the problem that has been existing for a long time. In reality, the same thing happens in Canada,” said Lexchin.

Sunshine legislation

When it comes to controlling the relationship between drug makers and those on the front lines of medicine, Canada lags many Western countries and mostly leaves disclosure up to the industry’s trade association, Innovative Medicines Canada, said Grundy at the University of Toronto. It has a code of ethics governing disclosure of payments to doctors, but it is voluntary.

The U.S., Europe and Australia all require full disclosure of drug company payments to physicians and patient groups. Grundy said direct payments for prescribing drugs are illegal in most countries, including Canada, but relationships are more complicated and nuanced than that.

Drug makers routinely pay doctors to put their names on scientific papers written by the company, said Gagnon. They also pay doctors to explore how a drug is performing with real patients in what is called a phase 4 clinical trial. The idea is to get doctors into the habit of prescribing a particular drug.

But out of 600 corporately sponsored phase 4 clinical trials worldwide, none published any adverse data or effects, said Gagnon.

“It’s all done for marketing purposes.”

For Grundy, when profits drive influence, rather than patient needs, disclosure is the only answer.

“Transparency is really, really important because research shows even one sponsored meal leads to higher rates of a drug being prescribed. We definitely saw that with opioids,” she said. “And health care has developed a culture that has talked itself into believing this is OK.”

When asked about the concerns about the relationship between doctors and pharmaceutical companies raised in this story, the Canadian Medical Association provided the following statement:

“The primary objective of professional interactions between physicians and industry should be the advancement of the health of Canadians.

“The long history of health care delivery in Canada has included interaction between physicians and the pharmaceutical and health supply industries; this interaction has extended to research as well as to education.

“Physicians understand that they have a responsibility to ensure that their participation in such collaborative efforts is in keeping with their primary obligation to their patients and duties to society, and to avoid situations of conflict of interest where possible and appropriately manage these situations when necessary. They understand as well the need for the profession to lead by example by promoting physician-developed guidelines.”

Edited by Sonja Puzic

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