Abdeali Saherwala | Staff Writer
Featured image: In October 2017, Health Canada hinted at its intention of increasing the fees that drugs makers pay for the review process of new medication. | Courtesy of Darko Stoja
Health Canada signaled in October 2017 it will increase the fees charged to pharmaceutical drug manufacturers, which include their review and approval processes of any new medication they sell, as outlined in a new legislative policy.
Prior to this change, half of Health Canada’s operating budget was solely derived from these user fees.
This increase in user fees for drug makers will now fund 90 per cent of Health Canada’s operating budget, and the remaining 10 per cent will be funded by taxpayers.
Health Canada claims the purpose of charging drug manufacturers for reviewing their new medication is because it provides a useful service to drug companies in the assessment of product safety.
“Health Canada is raising fees in order to decrease the amount of taxpayer money that goes into regulating the approval of new drugs. It is operating on the basis that, since it is providing a service to drug companies, then these companies should be paying for the service,” says Joel Lexchin MD, a professor emeritus in the School of Health Policy and Management at York.
Before the introduction of user fees in 1994, Health Canada’s operating budget was solely funded by taxpayers. Nevertheless, since the creation of user fees, the primary funding for Health Canada is the drug manufacturers it is supposed to be regulating.
“This is a bad idea. When the drug regulatory system is funded by tax dollars, then Health Canada is responsible to the public for protecting public health,” says Lexchin.
Since the creation of user fees, there has been an association with the decrease in time it takes new medications by Health Canada to be reviewed, assessed, and brought to the market.
“When it is also funded by the pharmaceutical industry, then it also has a responsibility to meet the needs of the companies, and the companies are for-profit organizations and want to get their drugs on the market as quickly as possible, in order to start to recover the costs of developing and marketing the drugs,” adds Lexchin.
With faster approval times, drugs can stay longer on the market under patent protection, thus generating more profits for drug manufacturers.
“However, faster drug reviews are linked to more safety problems once the drugs are on the market.
“Drugs in Canada that are approved in the standard 300 days have about a one in five chance of having a serious safety issue discovered once they are on the market. For drugs approved in the 180-day priority review process, that drops to a one in three chance,” he explains.
If Health Canada does not complete its safety assessment within the mandated time frame it promises to drug makers, then they will refund 25 per cent of the assessment cost back to the drug manufacturers.
“Public health and private profit are usually not compatible, and to the extent that Health Canada either consciously or subconsciously is taking the needs of the industry into account, then public health will suffer,” says Lexchin.
