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Pharma must keep track of policy change within Canada; movement at even the provincial level can have significant impact on products. Unfortunately this isn’t an easy task; political differences from province to province mean that the situation is constantly mutating.

By Anonymous (not verified) on Nov 20, 2013

The political mix at a provincial level doesn’t do anything to simplify the national situation either.  In spite of differences, there remain issues of common interest and recently we have seen the emergence of coordinated coalition pressure for policies that will reduce the cost-burden of healthcare. Pharma must develop sophisticated operations to stay in touch so that they can make the right marketing, sales and research decisions to guide portfolios through a shifting landscape. Fortunately, we managed to track down Brent Korte, the National Director Government and Community Relations at Janssen, who highlighted the key present developments that pharma should keep abreast of.

There has been a lot of recent political party change at the provincial level across Canada. But while the leadership change in British Columbia this summer could have interesting developments as recently re-elected Premier Christy Clark shapes policy, Quebec is a region that is currently holding more of Korte’s attention. When Parti Québécois upset the Liberal party in 2012, after over a decade in power, the status quo was certainly not maintained. Instead, Parti Québécois instigated a period of far-reaching reform; significantly, the decision to abolish the ’15 year rule’ that had been in place since 1994.

A number of companies have been forced to become more agile.

Within a mere months, in-line products in Quebec and the rest of the country that had been post-patent were affected. The effect was felt by pharma immediately. “Significant revenue was lost straight away,” Korte states, “and this effect was not limited to us. A number of companies have been forced to become more agile. We now all have to look at our economic footprint from a revenue perspective and think about how to adapt sales and marketing operations, along with R&D decisions going forward to the future, to adjust to this loss in revenue stream.”  The clear challenge for pharma going forward will now be to retain cost once products have been approved.

Beyond the provincial level, political movements have been affecting pharma at the national level. An example has been the provincial unity, regardless of political stripes, that has driven a unique situation within political affairs where everyone has joined in support of the pan-Canadian purchasing alliance. Korte points to this as. While it is true that change at a regional level affects pharma to a certain degree, the pan-Canadian political unity is affecting pharma on a much grander scale. Korte notes, “the issue that has been causing real impact. This is not going away; in fact it has escalated over the last year.”

When you are trying to make a health budget sustainable, one of the low hanging fruit is pharmaceuticals.

In light of discussion of the range of political difference at the regional level, it may seem surprising that there is a cohesive national movement. What is driving this? Korte points to a common theme in each province, the concept of healthcare sustainability. Korte notes that because, as in other countries where health technology assessment is dominant, the ministry of health comes under the political head, political change can impact healthcare policy. Political parties have the opportunity to implement or take away policies that affect pharmaceuticals. Unfortunately for pharma, as Korte wryly observes, “When you are trying to make a health budget sustainable, one of the low hanging fruit is pharmaceuticals”

The international impact of this should not be underestimated, as the trend towards health sustainability is a global phenomenon. For countries that are facing fiscal pressure, and have large government payers, applying pressure to pharmaceutical prices has presented an opportunity to get costs down. Canada is joined by Europe, the UK and Mexico in having an HTA structure and therefore, as Korte points out, “each of these countries look to each other to see how they are coping, and as a result shifts in policy in Canada or elsewhere can have global repercussions.”

The solution to reducing pharma’s exposure to political change is not to try and stop it. Indeed, it isn’t really possible to do so. Korte puts forward a different strategy, “You need to become engaged in helping to shape what health policy looks like.” Historically, pharma has not managed to take this approach. In fact Korte goes further and says that as an industry “Pharma have taken a very adversarial approach.” But why is this?

We have seen, over the last few years, more and more policy issues that will impact the industry as a whole. As such there is more reason that ever for the industry to start acting together.

The reason is that dialogue has been rooted against the prevention of government changes around therapeutic substitution and generic entries. As such, the government strategy has evolved to anticipate this stance and by the time that industry is brought into the discussion, policy has moved to firm point. Getting engaged in the discussion early on is key, if you have a seat at table by the time the political masters start shaping the agenda, then you can influence the outcome before it becomes impossible to do so.

So what does the political future hold for pharma? Over the last few years, Korte believes that industry lobbying has completely changed. It is Korte’s opinion that RX&D has managed to come together much better to improve the way they work. They have restructured into a more streamlined body and this has improved their ability to be on top of policy change and presents an important and necessary boost to pharma’s ability to protect itself against political change. Korte summarises the issue nicely, saying, “we have seen, over the last few years, more and more policy issues that will impact the industry as a whole. As such there is more reason that ever for the industry to start acting together. Industry lobbying that is focused and cohesive is a smart strategy for all.”