How US Health Reform Is Hitting Canada

Apr 01, 2011

Canada is the fickle date on the dance card of US health reform advocates. While some see our northern neighbor's medicare system as a waltzing symbol of compassionate care for all, others opt for the fierce tango rhetoric of "socialized medicine." What's intriguing now is how interest in Canada as a precedent for US reform has waned. This is a consequence of larger economic developments unaffected by the ritual foot-shuffling around the policy debate. The most important of these is the rising value of the Canadian dollar against the greenback, which has reduced the cross-border gap in drug prices that, among other things, drove congressional efforts to authorize government negotiation of reimbursements and to legalize the importation of medicines from Canadian pharmacies.

So Canada may be off the reform movement's pop chart—at least for the time being. Nevertheless, savvy observers believe there are useful lessons to be drawn from the diversity of approaches that characterize the two countries' health systems. The US is drifting toward the Canadian model due to the growing public sector stake in health financing and more overt government control over provider payments. Likewise, in Canada, drug access and reimbursement still mimic the US approach in maintaining a large private and employer base. And once you gain access to the system, margins for all suppliers, in both countries, are high when compared to other industrialized markets.

The closeness of the two countries in sharing an essentially boundaryless regional space illustrates a surprising truth: Big Pharma can do equally well in Canada, controlled by a single payer and where care is free to all at the point of access, as it has in the US, where the competitive market plays a greater role.

On the front line in managing this delicate pas de deux is Rx&D, the trade association representing innovative drug makers active in Canada—still the world's seventh-largest pharma market in terms of sales. For a closer look at the similarities and contrasts in managing the industry's commercial and policy platforms beyond the US, Pharm Exec recently visited with Rx&D President Russell Williams for a candid Q&A. Williams, a former member of the Quebec National Assembly, is embarking on his eighth year in the association's hot seat.

Pharm Exec: Given the turnover now taking place in many of the top positions within the industry's leading trade associations, you are distinguished partly by your long tenure. What are the key skills that have enabled you to prosper in an environment marked by repeated challenges to the industry's overall reputation?

"One fact that irks me is that because the Canadian payment structure is so siloed, companies struggle in making the case that newer innovative drugs are the most cost efficient part of the health system." — Russell Williams, President, Rx&D
Russell Williams: The most critical skills are the ability to adapt to change, recognize when conditions require consideration of a new approach, and to reach out to secure consensus. People who work with this industry are mainly interested in what we offer in terms of solutions. I think our positions and messaging is recognized; what matters is how we collaborate, so that when decisions are made the industry is seen as constructive rather than obstructive. What we find in Canada is that the "right to decide" remains in the hands of a few players. Just saying "no" isn't going to cut it with them. The US is different in that there are more points of leverage for the industry. Flexibility, diversity and choice—these are valuable attributes of your US health model that must be retained. And we as an industry need to spread that concept globally.

lorem ipsum