Marc Kealey's Health Policy Summit Speech

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Remarks by

Marc Kealey

Cross-border Prescriptions and

the Impact on Canadian Health Care

5th Annual Health Policy Summit

St. Andrew’s Club & Conference CentreToronto, Canada

April 23, 2007



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My thanks to Insight Information for the invitationto take part in this important event, the 5th Annual

Health Policy Forum. This is the place to be to get

the big picture on where health care is going in

Canada, and the quality and diversity of the

speakers and presenters assembled here is again

outstanding this year.

I’m particularly pleased to be included on a

program that features organizations representing

other major health care providers, our peers as

major players in health care in Canada.

Pharmacists, you see, have a valuable and

important perspective on many issues, local,

provincial, national, international, global. I’m here

today to deal with an international issue, that of

cross-border prescription drugs and the threat we





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As pharmacists, we are encouraged to see

significant progress in Ontario over the past two

years toward integration and collaboration. Butthere is much left to do.

It’s clear that we and our fellow health care

providers simply have to step up with a real sense

of priority, put our collective thinking on the table

and fix what continues to be broken in this system.

The time to do so is now, so that we can build on

the gains that have occurred.

When we look at the structural changes through

which integration and collaboration is best being

realized among doctors, nurses, pharmacists and

hospitals, we’re finding it among the multi-

disciplinary Primary Care Teams now active, working

and succeeding in a range of locations and settings.



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And through the prism of Family Health Teams, for

example, the working relationship between

physicians and pharmacists around medicationmanagement is undergoing fundamental reinvention.

At the broader level, there is a parallel shift

occurring in the relationship between pharmacists

and our physician colleagues at the Ontario Medical

Association and the College of Family Physicians.

Our interactions around medication management

are poised to be productive, driving common

policies and approaches that place the patient

appropriately at the centre.

When Jonathan Guss, came to the OMA not too

long ago, he started a fiscal realities committee

where we have quickly and cohesively come to

appreciate that the recurring central issue in

integration and collaboration is – exactly as we’re



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finding with Primary Care Teams – managing

patients’ medications.

That puts pharmacists squarely at the centre of

what patients need.

Pharmacists are equipped and ready to respond

here in Ontario. That’s a fact that patients and the

public in this province clearly understand.

In a survey of 1,000 Ontarians last year for OPA

found:

95% of Ontarians believe their pharmacists

help them better understand the medications

they need to improve their health;

88% trust their pharmacist to have an open

discussion about their health questions,

whether or not they are medication related;



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75% would not hesitate to seek education

services and patient care from their pharmacist

for smoking cessation, diabetes, asthma oranother health condition;

In this context of public preparedness and

expectation, we have been working with the

Ministry of Health on what is frankly an important

development for pharmacists. Starting April 1st of

this year, Ontario pharmacists have begun to

provide an expanded range of professional services

to our patients as the core of our new role in front-

line health care delivery.

The first professional service is a medication

review called Meds Check. Since the Meds Check

service became available to patients just three

weeks ago, it has been provided to more than

5,000 patients and is available at nearly one-

quarter of Ontario’s 3,000 pharmacies.



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Through this professional services initiative,

Ontario pharmacists are exercising their trueprofessional capacities. They are applying their

medication expertise to counsel patients, improve

patient health outcomes, and reduce pressures on

other parts of the health system – and they are

being paid for it.

Each Meds Check service provided to an ODB-

eligible patient earns a flat fee for the pharmacy.

This is an important new revenue stream for

pharmacy, backed by an initial commitment by the

ministry of 50 million dollars in fiscal 2007-08.

The new role of the pharmacist is part of the truly

enormous change brought about by the

Transparent Drug System for Patients Act, or

TDSPA, which became law in Ontario last fall.



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If you are at all familiar with what’s known as “the

drug file,” you will be aware that the

implementation of the TDSPA has been a rockyroad for pharmacists and the pharmacy sector in

Ontario.

But we succeeded over the past year in winning

back what might have been significant losses for

pharmacy. That enabled our board, some months

ago, to support outright the strategy and direction

of the Act, and agree that pharmacists should

move forward from it into the future as a

profession and as a health care player in this

province.

We’ve undertaken to communicate to the

government, other pharmacy and health

stakeholders, patients and the people of this

province that pharmacists are ready to engage in a



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positive, forward-looking process to improve health

care.

In the new paradigm of Ontario’s drug system,

community pharmacy is finding new ways and new

opportunities to secure our role as health care

providers and maintain the viability of our business

models. Professional services is one such avenue.

These are not simple issues; and neither is the

work of the pharmacist today simple or one-

dimensional. Patient needs are intricate, moreso as

we age as a population, and the pharmacist-

patient relationship is one of increasing complexity.

It’s fortunate in these times that pharmacists have

the trust of patients.

That trust is highest at 98% versus politicians at

7%.



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But not every politician rates low on trust. When

U.S. President Gerald Ford died earlier this year, I

was amused to read the following tribute:

Quote: “He had the look of a pharmacist. You never

got the sense he was as conniving as the others.”

But I have to assert today that it would be

incorrect to mistake the niceness of pharmacists

for complacency. Particularly when the health and

well-being of our patients is at stake.

That is the case with the issue I want to focus on

today: the renewed invasion of Canada by

American patients in search of low-cost

prescription drugs.



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When I sound a warning today about re-opening

the U.S. border to prescription drugs from Canada,

I’m speaking from the perspective of pharmacistswho are not only trusted, but expected by their

patients to get involved and to advocate in an

outspoken and effective way.

Our patients want us to protect their health. So

we’re speaking up to identify the issue of cross-

border prescription drug importation from Canada

by Americans as a threat to public health and

safety, and to national security, in both our

countries.

Our warning is responsible, well-considered,

realistic and reasonable. We issue it because as

pharmacists we put patient health, public health,

and the safety and the security of the prescription

drug supply at the top of our list of priorities.



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Let me trace back for you what’s happened in the

U.S. Back in September, a deal to once again

permit so-called “foot traffic” personal importationof prescription drugs by American patients was

struck in Congress and quickly signed into law by

President Bush.

Events followed quickly that in effect re-opened all

channels of cross-border prescription drug

importation by individual U.S. patients.

Since foot traffic works only for patients in border

states, another deal was needed.

So the Bush Administration intervened in October

by ordering the Department of Homeland Security

to cease confiscation by Customs and Border

Protection agents of prescription drugs mailed from

Canada.



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Oversight of Canadian prescription drug imports

was sent back to the Food and Drug

Administration, which by its own admission lacksthe capacity for comprehensive inspection and

enforcement.

This climbdown on enforcement at the border

expanded the permitted forms of cross-border

importation to cover internet and mail-order sales.

Since October 9th, the day U.S. Customs went

hands-off on prescription drugs purchased by

American patients from Canadian internet

pharmacies, the door to Canada’s medicine cabinet

has been thrown wide-open once again.

Three months ago, on January 10th

, these changes

were consolidated and brought forward in a

greatly-expanded form in a new legislative

proposal in the new Democrat-controlled Congress.



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A bipartisan bill called the Pharmaceutical Market

Access and Drug Safety Act of 2007 was

introduced in both the Senate and the House of Representatives.

This bill legalizes the importation of prescription

drugs from Canada by American patients,

pharmacists and drug wholesalers. That means the

legalization not only of personal importation by

individual U.S. patients, but also of bulk

importation by HMOs, state drug plans and other

large entities such as high-volume retail chains.

The congressional leaders behind this bill are

predicting its passage in the next two to three

months, saying they have enough support in

Congress to override a presidential veto.



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So let’s get this straight: Here in Canada, we have

built a drug supply and pricing system that meets

the needs of Canadians as part of our uniquemarriage of social and economic policy. While in

America, U.S. lawmakers are deciding it’s okay to

cherry-pick the benefits of Canada’s regulated drug

system as a solution to a domestic U.S. problem

with unregulated drug prices.

Instead of designing a system that responds to the

legitimate needs of Americans, U.S. legislators are

telling their constituents to buy prescription drugs

in Canada as a quick fix to high U.S. drug prices.

What does this mean? Well, picture an open

floodgate. Picture a made-in-America problem

being solved on the backs of Canadians.



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We’ve been warning of this situation for months

and months. We sent a cautionary letter to Health

Minister Tony Clement on September 1st

. Wefollowed up in October and November with

additional calls to action.

Our organizations believe that this American

legislative proposal poses an imminent and serious

threat to the security and integrity of Canada’s

drug supply, and hence a serious and genuine

threat to the health and well-being of Canadians.

What we’re looking at is a free-for-all on cross-

border drugs…and in any free-for-all, someone is

bound to get hurt.

As pharmacists, we will not stand by and allow the

victims of America’s prescription drug pricing



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problem to be the very patients here in Canada

who trust us to protect their health.

We see four dangers.

First, the so-called green light on personal drug

importation is in fact a danger signal – because it

encourages patients to bypass their own

community pharmacists.

Patients who do so jeopardize their health and risk

dangerous drug interactions by relinquishing

expert consultation and pharmacist-patient

interaction.

We’ve driven that message home with our patients

in this country; our colleagues at the American

Pharmacists’ Association have carried it forth to

their patients. Pharmacists in Canada cannot

provide adequate and appropriate patient

counseling when they don’t have access to the



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U.S. medical records of a patient receiving that 90-

day supply of drugs to take home. And often a

patient is reluctant to share information about aCanadian-filled prescription with his or her U.S.

health-care provider. This is a profoundly

dangerous situation.

Those most vulnerable are the American patients

in the greatest need of low-cost drugs – the

elderly, those most likely to be using multiple

medications, and most needful of the medication

management expertise their pharmacist can

provide.

The second threat to public health is in our own

country, with the potential for the depletion of the

Canadian drug supply.

U.S. demand for prescription drugs is more than

ten times the Canadian supply. Just imagine how



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the three million residents of the state of Iowa

would react if 33 million Canadians suddenly

descended on them and said, “We’re here for yourprescription drugs, hand ‘em over.”

Canada simply does not have the capacity to feed

America’s appetite for lower-cost drugs. Our

pharmacists do not want to become America’s drug

store. Our job is to provide medications and

expertise to Canadian patients, not provide

solutions for the shortcomings of the U.S. health

care system.

The bulk importation provisions of this new U.S.

legislative proposal would quickly drain the

Canadian drug supply and cause a crisis in drug

availability for Canadians.



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One authoritative US analysis says Canada’s drug

supply could withstand full-blown U.S. importation

for only a little over one month.

A crisis in drug availability translates into an

impending threat to public health and safety.

The practice of arbitrage – flowing U.S.

prescription drugs into Canada solely for

reimportation – creates a false economy that

American pharmaceutical manufacturers simply will

not support.



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And if in response Canadian internet pharmacies

import drug products from offshore, the lines can

quickly blur, making it difficult for U.S. patients –and the FDA – to differentiate between drugs

produced or approved in America, and those

produced in India or Israel or China, even in so-

called FDA-approved factories.

Unless and until a comprehensive drug pedigree

regime is in place and all prescription drugs are

identifiable through Radio Frequency Identification

(or RFID) technology, that issue cannot simply be

wished away.

The industry is telling us RFID drug pedigrees are

at least two or three years off. In the interim,

knowing which mail-order drugs are produced

where remains a guessing game – with patient

health up for grabs.



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And therein lies the third threat, that of counterfeit

drugs. The re-legitimizing of internet and mail-

order drug traffic encourages fraud by offshorecriminals posing as Canadian pharmacists and

selling counterfeit drugs.

The evidence produced by U.S. Customs on this

file is rock-solid, and damning. The Customs

statistics on mail-order seizures show at least 10

per cent of packages purported to be from

Canadian internet pharmacies in fact contain

counterfeit drugs.

In one seizure last fall, 19 million dollars worth of

prescriptions that U.S. patients believed were filled

by a Canadian internet pharmacy were actually

filled by a criminal organization located in Belize.

The drugs were fake and the patients, rather than

saving a few dollars, lost every penny they spent.



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The physical harm that can be done to patients

who believe phony drugs they take are genuine

cannot be over-stated. This imperils the health andsafety of those who, again, are trying to do

nothing more than save a few dollars.

Last month, the reality of this danger was brought

home with a tragic finding by the coroner for

Vancouver Island region in B.C.

The coroner tied the death of 56-year-old Marcia

Bergeron to counterfeit pills she unwittingly

ordered from a purported Canadian internet

pharmacy. We received from the coroner’s office

the toxicology report indicating that these

counterfeit pills contained dangerously high levels

of the heavy metals strontium, uranium and lead,

as well as other hazardous elements.

Last month, we advised the B.C. coroner that the

circumstances of Ms. Bergeron’s death are



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disturbing to Canadian pharmacists and patients.

And we urged the coroner to conduct an inquest to

make public all the facts of the case.

We believe an inquest represents the best possible

path whereby the issues and questions raised by

Ms. Bergeron’s death may be answered and the

public responsibly and fully informed and

protected.

If Internet pharmacies masquerading as legitimate

and Canadian are supplying counterfeit drugs to

Canadian patients, we need the mechanism of an

inquest to fully expose the facts surrounding this

incident and to identify and hold to account those

responsible. We are further concerned that the

presence of poisonous heavy metals in counterfeit

drugs raises additional serious questions.

A full exposure of the facts surrounding Ms.

Bergeron’s death will assist Canadians to



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understand the dangers of circumventing the

legitimate drug system and putting their health

and even their lives at risk by purchasing drugsfrom unknown and unreliable sources.

At last report the coroner continues to weigh the

case for an inquest.

The fourth and final threat I warn you about today

is one I do not raise lightly.

The greatest danger posed to the United States

today by the legislative and enforcement changes

on cross-border drugs is a renewed national

security vulnerability through the possibility of

drug terrorism, with mail-order drugs used as the

vehicle of attack.

Who can say with absolute certainty that the next

19 million dollars worth of phony drugs could be



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sent to America not by criminals in Belize, but by

terrorists? That the next batch of tainted pills from

a purported Canadian internet pharmacy willcontain deadly substances added deliberately to

cause harm or death?

Do Americans really want the hands-off policy

Homeland Security has adopted? Are the

Democrats and the Republicans in the new

Congress prepared to live with these risks?

We as Canadian pharmacists are not the first to

raise this issue. In a report to Congress in April

2005, Guiliani Partners warned:

Quote: “The nation’s medicine supply is vulnerable

to exploitation by organized criminals, drug

traffickers and terrorists. We should not contemplate

opening our borders to threats to our medicine



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supply when in all other aspects we are searching

for ways to tighten the security of our borders.”

Canadian pharmacists are asking today, why is

Congress ignoring that message? And why is it

ignoring other warning signs, like the court case in

2006 in Detroit in which 19 people, including five

Canadians, were charged with peddling counterfeit

prescription drugs and funneling the profits to a

terrorist organization?

The answer, in brief, is that U.S. lawmakers are

whistling past the graveyard, hoping against hope

that wide-open cross-border prescription drug

importation can remain safe. That the threats and

dangers I’ve described will never materialize.

Our concerns extend beyond these issues of safety

and security, to the bottom-line question of



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whether, in the face of this legislation, we in

Canada can maintain the lower price differential

that makes Canadian prescription drugs seem likea panacea to U.S. lawmakers and patients.

Prescription drug cost is the big issue right now for

Americans, but this legislation will quickly make it

a Canadian issue. The threat here is that while this

legislation may incrementally reduce the price of

American prescription drugs by a few percentage

points, Canadian prices will go up dramatically as

we deal anew with the whole range of complex

issues around subsidization, trials, research and

other factors underlying the enormous costs of

developing and manufacturing prescription

medications.



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This has the makings of a serious new issue in

intergovernmental affairs within Canada. If

unimpeded U.S. importation drives up drug pricesin Canada, each provincial ministry of health faces

the prospect of staggering increases in drug costs.

In Ontario, for example, the Ontario Drug Benefit

program procures some $3.5 billion worth of drugs

each year.

The provincial ministers of health and their

premiers need to start thinking right now about

how this U.S. legislative proposal could bring about

fundamental change in the prescription drug

pricing regimes they currently view as stable and

sustainable.

It would be prescient and appropriate for the

premiers to challenge the Prime Minister Harper on

this issue.



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To demand that he demonstrate how his

government will not only prevent drug shortages in

Canada if this proposal becomes law in the U.S.,but also maintain price protection in Canada when

American bulk buyers start pulling vast quantities

of prescription drugs from our regulated market

into their unregulated market.

At the root of the issue is this: American politicians

and patients continue to believe that Canada will

continue to offer solutions to their systemic

problem of high prescription drug costs.

Canadian pharmacists will tell you that we will not,

because we cannot.



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It’s for that reason that we are calling on the

Harper government to take immediate action to

protect Canada’s prescription drug supply bybanning prescription drug exports to the U.S. by all

means, including foot traffic, internet and mail

order, as well as through bulk importation.

As Canadian pharmacists, we cannot slake the

thirst of U.S. patients for cheap prescription drugs.

But we can urge our own government to turn off

the tap.

On January 12th, our organizations, representing

Canadian pharmacists, patients, and members of

the supply chain, called on the Government of

Canada to institute an immediate ban on the

export, both bulk and retail, of prescription drugs

from Canada.



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We asked Health Minister Tony Clement to meet

with us to discuss how the government intends to

protect Canada’s drug supply and ensure continuedaccess to medications for Canadian patients.

Back in October, in response to an earlier letter,

the Minister indicated Health Canada will take

action if and when Canada’s prescription drug

supply is affected by U.S. importation.

We told the Minister in January, and I repeat

today, that we can neither counsel nor support a

reactive, after-the-fact approach to the protection

of public health. We believe it is incumbent on the

Government of Canada to respond proactively to

this threat, driven by a commitment to prevent

harm and protect the public interest.



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It is our firm belief that the Government of Canada

can no longer simply stay silent on cross-border

prescription drug exportation, particularly in lightof the legislative proposal now before Congress.

It’s no secret what’s needed to avert this crisis.

U.S., lawmakers must meet their own prescription

drug problem head-on, and stop looking north for

stop-gap measures that will quickly become

unsustainable problems – or worse.

In the meantime, get ready for the cross-border

free-for-all. To the Harper government, we’re

writing it large:

Put the health and safety of Canadians first. Ban

prescription drug exports to the U.S., and do it fast.



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There is a private member’s bill, introduced by MP

Carolyn Bennett on October 31st, that the

government could adopt to give the Health Ministerimmediate power and authority to ban bulk

reimportation. That bill will now be debated in the

first week of May.

I will be taking this fight to Washington on May 23,

a few weeks from now, as the U.S. bill regains the

spotlight.

I will be presenting our position – our advocacy for

patient health in both the U.S. and Canada – at a

major session on cross-border drugs being

mounted at this crucial time by the Center for

Strategic and International Studies.

My message then will be the same as today. Faced

with the threat of continued U.S. activity to permit

and condone the easy answer of internet



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pharmacy, the solution for Canada is clear. The

need for action is urgent. We will continue to press

our government to do what is necessary to protectour drug supply, and the safety of Canadians.

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Marc Kealey's Health Policy Summit Speech