Independence, Influence & Power: Canada’s Failed Medicine Pricing Reforms

Matthew Herder presents his opening statement to the House of Commons’ Standing Committee on Health on May 2, 2023. In February, Herder resigned from the Patented Medicine Prices Review Board (PMPRB).


Thank you for the invitation to appear. I’d like to use my opening statement to pose some questions that I hope will inform the committee’s inquiry.

The first question is about the PMPRB’s independence.

When he appeared before this Committee last week, Minister Duclos claimed that his decision not to consult with the Board prior to November 28, 2022, was driven by a desire to “protect the independence of the Board.” According to his testimony, when he finally wrote the acting Chair of the Board on November 28 he was simply exercising his duty to consult with the Board under section 96(5) of the Patent Act.

But why wait until the eleventh hour to consult? The Minister has not been briefed by the PMPRB about its reforms on any occasion during his tenure. And in what way does his request that we suspend our consultations—a step no previous Minister of Health has taken—help to “protect the Board’s independence”?

Photo Credit: Flickr/Onasill – Bill Badzo – Be Happy. Image Description: Canadian parliament buildings, Ottawa, Ontario.

Under s. 96 of the Act, it is the Board that has the legal authority to make guidelines. During the fall consultation period industry publicly called for the Board to suspend its consultations without naming what its concerns actually were.

Instead, industry went to the Minister to ask him to repeat its request that the Board suspend. And the Minister did exactly that without ever meeting with the Board to gain an understanding of the proposed guidelines.

In this environment, how can the PMPRB credibly consult on any guidelines in the future?

The answer is that it can’t: Industry now knows that it can bypass the PMPRB when it isn’t satisfied with the Board’s policy direction and get the Minister to do its bidding. It is an arrow straight to heart of the Board’s supposed independence. 

My second set of questions is about influence, specifically, industry’s pervasive influence upon pharmaceutical policy in Canada.

Look no further than the PMPRB itself. Several former PMPRB officials have turned their time at the regulator into consulting careers despite the fact that they are prohibited, under the Conflict of Interest Act, from “acting in a manner that takes improper advantage” of their time in office.

One former Executive Director of the PMPRB moved to a VP position at Innovative Medicines Canada, only to return to Health Canada a few years later. She is now the head of Health Canada’s Office of Pharmaceutical Management Strategies—the lead official advising the Assistant Deputy Minister, the Deputy Minister, and the Minister on all PMPRB related matters.

There appear to be direct lines of communication between Health Canada and industry. Days before any public announcement had been made about our resignations, pharmaceutical lobbying firms knew that the Executive Director was leaving the PMPRB.

And the newly appointed Chair of the PMPRB is a practicing lawyer with clients actively engaged in the development of patented medicines.

How was the new Board Chair appointed given these potential conflicts of interest? How did lobbyists know that the Executive Director was stepping down? Did someone at Health Canada advise the Minister not to meet with the PMPRB last fall?  

My point is that the line between consultation and conflicts of interest has become completely blurred under industry’s influence. Unless we start taking conflicts of interest far more seriously, meaningful pricing reform will be impossible.

Finally, I want to raise a fundamental question about political courage in the face of industry’s power.

You have heard different accounts of what’s happened at the PMPRB. It’s important that the truth comes to light. But this should not distract us from the larger issue.

I urge the members of this committee, Parliament, and Canadians more broadly, to remain focused on industry’s power to control the policy conversation.

They control it by playing fast and loose with the facts. They say pricing reforms will hurt research and development. But the evidence shows that pharmaceutical industry spending on R&D is already at an all time low—in the absence of pricing reforms.

Industry says that pricing reforms will stop life-saving new therapies from being launched in Canada. But the evidence suggests almost all new drugs that are launched in the US also make it to Canada.

Trikafta, the cystic fibrosis drug that its manufacturer threatened not to launch in Canada as a result of the PMPRB’s pricing reforms, was actually exempt from our new pricing regime. Yet, industry continues to claim that PMPRB was to blame for Trikafta’s delayed availability in Canada.

Industry plays fast and loose with the facts because patients are desperate for new therapies. And because they pay the leaders of patient advocacy organizations to sell the line that the PMPRB is the problem.

Industry plays fast and loose with the facts because they can. And because we let them.

The question we should all be asking is when will we ever stand up to industry’s power and take the steps that are needed to make medicines more affordable for Canadians.

Thank you. I welcome your questions.


Matthew Herder is CIHR-PHAC Chair in Applied Public Health, Director of the Health Law Institute in the Schulich School of Law at Dalhousie University, and an Associate Professor in the Department of Pharmacology and Faculties of Medicine and Law at Dalhousie University. @cmrherder

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