[Ip-health] Globe and Mail: Drug Makers Expected to Shun Canada

[Mike Palmedo]

http://www.theglobeandmail.com/servlet/story/LAC.20060623.ERBITUX23/TPStory=
/National

Drug makers expected to shun Canada - Price disputes will likely keep
new products off shelves, group predicts

LISA PRIEST
The Globe and Mail
June 23, 2006

More drug manufacturers will likely follow the move of Bristol-Myers
Squibb Canada, the company that refuses to market its colorectal cancer
drug Erbitux because it can't get the price it wants.

"The question I hear from companies is, 'Why bother?,' " said Peter
Brenders, president and chief executive officer of BIOTECanada, a
national association that represents biotech companies and some research
institutions.

"I think we're seeing this in Canada today and a number of technologies,
treatments for patients are not coming to Canada," he said.

Bristol-Myers Squibb Canada refused to launch Erbitux, the drug it
distributes and licenses, after it failed to agree on a price with the
Patented Medicine Prices Review Board. That federal board regulates the
price of patented medicines to ensure they are not excessive.

Although Bristol-Myers Squibb Canada refused to say how much it wanted
to charge for the drug, the Cancer Advocacy Coalition of Canada
estimates it costs about $56,000 for a standard course of therapy.

While Erbitux has not been proven to extend the lives of colorectal
cancer patients, it does shrink tumours in some patients and delay
tumour growth, especially when used as a combination treatment. It is
typically used on certain types of patients for whom other treatments
have failed or to which they have become resistant.

Joel Lexchin, professor of health policy at York University, said he has
heard of only one other case in which a pharmaceutical manufacturer
refused to market a drug strictly due to pricing. Still, he expects to
see more companies follow suit.

"It will happen more and more. You're getting these drugs coming onto
the market, with the high prices," Dr. Lexchin said in a telephone
interview. ". . . The drug companies want a high price because they
figure the market will pay for that."

Certainly, Ontario's Health Ministry is paying a higher price by sending
patients requiring Erbitux to the United States.

It approved 34 of 38 cancer patients who applied to have Erbitux
administered to them in the United States in the 2005-06 fiscal year, at
a cost of $3.6-million, Health Ministry spokesman John Letherby said.
Those figures also include costs associated with providing the drug.

The only way patients can obtain it in Canada is by having their doctors
apply for it under Health Canada's special-access program. If granted
access, patients must pay for it at a price the Patented Medicine Prices
Review Board deems acceptable.

Since April, 2004, Erbitux has been released 88 times through that
program, Health Canada spokesman Christopher Williams has said. Those
figures include repeat requests.

Whatever the case, the dispute has caused many to wonder how an
identical patented drug can command such dramatically different prices,
depending on the country in which it is sold.

The answer lies in price controls, which are heavily used in Europe and
Canada, but not at all in the United States.

Phyllis Carter, spokeswoman for Merck KGaA, the company that licenses
Erbitux in Europe, said the drug sells there for less than half of what
it does in the United States. Erbitux typically costs =804,000 a month in
Western Europe, she said in a telephone interview from Darmstadt, Germany.

In Canadian dollars, that translates into about $5,600 monthly.

According to Medical Reform Group spokesman Gordon Guyatt, the Patented
Medicine Prices Review Board has done its job. In Canada, drugs must
gain approval from Health Canada before they can be marketed. Erbitux,
for example, was approved nine months ago.

E. Richard Gold, director of the Centre for Intellectual Property Policy
at McGill University, described patented drug prices in Canada as being
in the "middle of the pack."

In a telephone interview from Montreal, he said the federal or
provincial government should threaten the drug company with a compulsory
licence if it fails to put the drug on the Canadian market. With a
compulsory licence, a government can have the drug made by a generic
company.