Negotiating A Price For Kalydeco

The problem with negotiating a price for Kalydeco in Canada is without question a complex one, and not just because of the astronomically high price Vertex wants for this miraculously effective drug.

First of all, Vertex seems to hold all the cards: they alone have the medication that – for some – can make the difference between life and death, or at least restore their quality of life to a point that they are able to live normal lives again. Mind you, a recent announcement by Galapagos NV in Belgium stated that they are about to conduct trials on a CF potentiator that is claimed to be more effective than Kalydeco. This might eventually bring some badly needed competition into the marketplace and result in more reasonable pricing for this type of medication, and CF patients in need of it might feel less like victims in a hostage taking. I know that is putting it very bluntly, but that is how many are feeling in the current situation.

As well, Vertex is not hurting for money at the moment – nor for the foreseeable future – as they have pricing agreements in place in a number countries that will guarantee them millions of dollars in revenue for some time to come, or at least for as long as it takes for the competition to enter the marketplace, but that will likely still be a number of years away. In addition, the key players at Vertex have already cashed in substantially on behalf of Kalydeco’s success, when on April 19 Vertex’ market value rose by 6 billion after positive trial data.  At least one of its executives sold shares worth more than $60 million, nearly doubling the purchase price of his share options.

Secondly – and as we have pointed this out in an earlier blog – there is the lack of political will to make this happen for Canada as a nation. A nation, I thought, that wants to be known foremost as a leader in how it looks after its citizens. With due respect to the Albertan negotiators trying to work out a deal with Vertex, they are doing so with one arm tied behind their backs.  This is so because the Harper government has all but abandoned Health Care in this country – this is not a priority for them, as clearly evidenced by a number of things, such as the refusal to renew the Health Canada Accord due for renewal in 2014, as well as the dismissal of the Canada Health Council by cutting off its funding.

It is important to note the Canada Health Accord and the Health Council of Canada were Pan-Canadian health strategies, designed to provide Canadians with equal access to the highest standards of healthcare, regardless of where they lived. As well, the Council was supposed to monitor and nurture the development and implementation of the 2004 National Pharmaceuticals Strategy that would, amongst other things:

• Develop, assess and cost options for catastrophic pharmaceutical coverage;
• Establish a common National Drug Formula for participating jurisdictions based on safety and cost effectiveness;
• Accelerate access to breakthrough drugs for unmet health needs through improvements to the drug approval process;

With the disbandment of the National Health Council,  this Strategy is now truly dead. Instead, we have what appears to be an ad-hoc agreement by the provinces, the Pan-Canadian Purchasing Alliance, and that is the body now sitting down with Vertex to decide on a price for Kalydeco.  Essentially, the provinces have been left on their own because – Mr. Harper seems to say – “Health Care is a provincial responsibility, so there – go for it, and see if you can sort these things out between yourselves. And don’t come to me for more money, as there isn’t any.”

Well, it isn’t so much that there isn’t any more money in the Tory-managed coffers, as the money they are spending elsewhere – such as in commercial development abroad – appears to flow freely: $25-million for an institute on mining and development based at the University of British Columbia; $16-million to improve environmental practices of Peru’s mining sector, and $17.4-million to “promote economic competitiveness” in mining regions to help build the businesses of small rural farmers in three areas of Peru where Canadian companies operate mines.

Not to say that these projects aren’t of any value to Canada, but you can draw your own conclusions as to the priority our federal government places on the overall Health and Well-being of Canadians.