Social Policy in Ontario

On Feb. 29, 2016, a curious fax landed in the hands of Michael Ritchie, a supervisor in the hospital pharmacy at Toronto’s Sunnybrook Health Sciences Centre.

It was an out-of-the-blue letter from Janssen, a unit of the pharmaceutical giant Johnson & Johnson, offering a discount on Remicade, a medication that eases the often harrowing symptoms of patients with Crohn’s disease, ulcerative colitis and rheumatoid arthritis.

Normally, it is priced at $987.56 for each of the three or four vials required at every IV infusion.

But Janssen was prepared to give Sunnybrook – and, as it turned out, every other hospital in Canada – an unusual deal. “As a valued partner for Janssen,” the letterbegan, “we are pleased to offer you a reduced hospital price of $0.01 for Remicade … inpatient use.”

In an e-mail to his boss, Mr. Ritchie skewered the audacious offer with an exaggerated subject line: “Remicade bribe.”

At the time, Janssen was facing competition from a new kind of drug called a biosimilar – a cheaper alternative that is almost, but not quite, the equivalent of a generic. The new version retailed for $525 a vial, about half the price of Remicade. Provincial governments and some private insurers were planning to promote the cheaper option by dictating that new patients would be covered only for this newer drug.

Janssen’s penny-a-vial offer is one of several aggressive tactics The Globe and Mail uncovered in an investigation into the juggernaut that is Remicade. With $1.1-billion in sales in 2017, it is Canada’s top-selling drug by revenue, according to the pharmaceutical analytics company IQVIA, and one of the most lucrative in the country’s history. It is one of only two drugs to eclipse a billion dollars in sales in Canada in a single year.

To protect Remicade’s market share, Janssen has signed confidential pricing deals with insurers, covering more than 90 per cent of privately insured Canadians; taken the Quebec government to court over its decision to stop covering Remicade for new patients; deployed a deep discount to separate Prince Edward Island from the federal-provincial-territorial alliance that negotiates drug deals; and attempted to dissuade physicians and patients from choosing biosimilars.

Janssen says its sales and marketing tactics are guided by one principle: its desire to ensure physician choice and patient access to its drugs. The one-cent-a-vial offer, Janssen contends, was never intended to gain public coverage of Remicade for new patients after they left the hospital, but to make sure physicians and patients, including children with severe bowel disease, could still get the drug they needed. The biosimilar, called Inflectra, is not yet approved for children.

Janssen’s Canadian division and its parent company, Johnson & Johnson, are hardly the only pharmaceutical giants who play hardball to protect their bottom lines. The manufacturers of other infused drugs, including Pfizer, which makes Inflectra, pay per-infusion fees to doctors, too. But Janssen’s constellation of efforts on behalf of Remicade in Canada have succeeded in a way that puts the drug in a league of its own.

Canadians pay a higher sticker price for Remicade, and use much more of it per capita, than in the United States or Europe, according to the federal drug-pricing regulator – this despite the fact that Remicade’s patent has expired and there are cheaper options available.

“When you compare Canada to other countries,” says Marc-André Gagnon, a pharmaceutical-policy expert at Carleton University in Ottawa, “there is something going on with this drug.”

During a 10-month investigation, The Globe examined documents obtained through 30 Freedom of Information Act requests and conducted more than 50 interviews with doctors, patients and drug-industry insiders. The result is an unvarnished look at how drug companies take advantage of a fractured system, in which Canadians pay for prescription drugs through more than 100 public and 100,000 private insurance plans. It is a system that is ripe for manipulation.

Remicade’s success in Canada is not a story about a bad or ineffective drug thrust upon patients who don’t need it. Remicade is a good drug – a wonder drug, even. But in revealing how it is sold and promoted in this country, and the health-care policies that allowed it to gain such a foothold, a picture emerges that helps explain why, per capita, only the United States and Switzerland among Organization for Economic Co-operation and Development countries spend more on drugs than Canada does.

About 300,000 Canadians suffer from rheumatoid arthritis. Crohn’s disease and ulcerative colitis afflict nearly 250,000 people in Canada, which has one of the highest reported prevalence rates of the conditions in the world – a fact that goes some of the way toward explaining why Canada uses more drugs like Remicade than most other countries.

All three conditions are autoimmune disorders, and all can be debilitating.

It used to be that physicians had little to offer these patients. Scientists did not understand precisely how autoimmune disorders turned the body’s defence system against itself, inflaming the joints or gastrointestinal tract.

That started changing when Marc Feldmann, an Australian immunologist, began looking, in the 1980s, for an answer in cytokines, a group of small proteins that tell the cells in the immune system how to behave. Working in a London lab with tissue from the knee joints of rheumatoid-arthritis patients, Dr. Feldmann and his research partner, rheumatologist Ravinder Maini, found they could halt a cascade of inflammatory effects by blocking the haywire signals from one type of cytokine called tumour necrosis factor alpha, or TNFa.

That discovery led to the testing of a TNF-blocking molecule called infliximab – then owned by Centocor, a small Pennsylvania biotechnology company – on patients with rheumatoid arthritis. Delivered by intravenous drip, infliximab was a biologic, a complex drug manufactured in living cells. It nearly erased the horrific symptoms of rheumatoid arthritis, but only for about 10 weeks. The relapses signalled that Centocor had a breakthrough far more lucrative than a cure: a drug that could transform lives, but which patients would have to take – and pay for – for years to come.

In 1999, Johnson & Johnson bought Centocor. More than a decade later, it renamed the unit Janssen. (Janssen Canada, meanwhile, took over the marketing of Remicade from Merck in 2011.)

Today, more than 25 years after the initial clinical trial of infliximab, the drug that would eventually be sold under the brand name Remicade, TNF-blockers bring in more money worldwide than any other class of drug. Remicade is now the fifth-best-selling drug in the world, with global sales of US$7.2-billion in 2017, according to EvaluatePharma, a U.S. company that analyzes the pharmaceutical and biotechnology sectors.

In Canada, Remicade is not fifth, but first.

Janssen, however, contends that Remicade is no longer the Canadian sales behemoth it appears to be. Data from IQVIA show Remicade is losing ground to competitors among new patients, but they also show prescriptions for the drug have steadily risen for the past five years.

But when it comes to sales, it’s hard to know the truth. All publicly available information about brand-name drug sales in Canada must be gleaned from “list” prices, which don’t reflect confidential discounts and rebates now commonplace in the global pharmaceutical industry.

Even the Patented Medicine Prices Review Board, Canada’s drug-pricing regulator, is left in a position of trying to divine what it can from those list prices. And Canada’s Freedom of Information laws are no help on this front: Such laws exempt commercial secrets. (And those secrets are tightly guarded: When three Toronto hospitals were prepared to release details of the one-cent-vial offer through an FOI request, Janssen objected. The case is now in the hands of the province’s Information and Privacy Commissioner. The Globe obtained a copy of the fax.)

Still, it’s clear the footprint of Remicade is much larger in Canada than elsewhere. According to the federal drug-pricing regulator, Remicade accounted for 40 per cent of all the biologic disease-modifying antirheumatic drugs sold in Canada last year – compared with roughly 21 per cent in Switzerland, 13 in the United States, 7 in Germany and 4 in Britain. Janssen says the report that includes those figures is misleading and lacks context, but the regulator stands by the report.

As the first widely sold intravenous therapy for a chronic disease, Remicade’s arrival on the scene, in 2001, confounded a Canadian policy born in the age of simple pills: Hospital care is free to patients, but prescription drugs taken outside of a hospital are not. Which was Remicade?

Hospital outpatient clinics, mindful of shouldering the cost of one of the most expensive medications ever sold in Canada, were slow to make space for Remicade users, who usually require a two-hour IV drip every eight weeks. So Schering-Plough, the company that launched Remicade here on Centocor’s behalf, did something radical: It set up its own infusion centres in strip malls and office blocks, helping to spawn a large private infusion industry that today operates alongside Canada’s public health-care system.

“To some extent, it was a relief,” says Steve Long, a pharmaceutical-industry consultant and a former head of Alberta’s public drug program. More patients got Remicade and hospitals saved money, with those costs offloaded to private insurers and provincial government-sponsored drug plans.

Ontario’s drug plan for patients with catastrophic annual drug costs saw its budget soar from about $50-million in 2000 to almost a half-billion dollars by 2016, according to a study published in March of this year. Although other high-priced drugs played a part, the program paid out twice as much for Remicade as for any other drug in 2015. Seven of 10 Canadian provincial governments say they spend more on Remicade than on any other prescription drug.

Today, about 90 per cent of all Remicade is delivered at private infusion centres, which also infuse other intravenous medications. Such centres are paid for by drug makers and run by third parties such as McKesson, the drug distributor and pharmacy company that owns the Rexall drug-store chain, and Innomar Strategies, whose clinics are exclusive providers of Inflectra, the Pfizer-owned biosimilar of Remicade. At most such clinics, nurses insert the intravenous lines and monitor the infusions, while doctors are paid to be on-call in case of serious drug reactions. As Janssen points out, these pharma-sponsored clinics save the public health-care system money.

Janssen has also insinuated itself directly into the public health-care system, in limited ways, by sponsoring infusion services inside at least two hospital outpatient clinics and even in the offices of doctors themselves. The company pays doctors who operate infusion chairs inside 46 offices across the country – most of those home to multiple practitioners – a fee of $275 for every infusion of Remicade, The Globe has learned. (Janssen would not confirm the amount of the fee, calling it confidential.) It is, of course, a fee that would not be paid if patients were prescribed one of the drugs that can be injected at home.

Pfizer, in a bid to keep pace with Janssen, says it also pays doctors $275 for every in-office infusion performed. Both companies say the fees are meant to help doctors defray their overhead costs, particularly the salary of infusion nurses.

And while the drug companies say the health-care system has left them with no choice but to pay per-infusion fees, that is not strictly true everywhere. Ontario’s Ministry of Health and Long-Term Care says it has a billing code that doctors can charge for starting or supervising infusions of Remicade, even if the work is delegated to a nurse. What is true: The code pays significantly less than $275 per infusion.

Of the 40 or so doctors The Globe tried to contact, one of the few on-the-record responses came from Mary Morgan, the manager of the screening clinic at Toronto’s non-profit Kensington Health, whose services include a long-term care home, a hospice, a surgical eye centre and the screening clinic that Ms. Morgan manages.

Beginning in the 2013-14 fiscal year, Kensington opened an infusion room. Janssen lent the clinic three lounge chairs – Janssen says it has since discontinued the practice of lending equipment such as chairs and IV poles – while McKesson lent a medical fridge, said Ms. Morgan. Under the terms of its deal with Janssen, the clinic receives “a per-infusion, per-person fee” every time a patient receives an IV drip of Remicade, Ms. Morgan said.

The clinic also receives a payment from McKesson for reconstituting, or mixing, the drug, Ms. Morgan said, adding that the amount of both fees is protected by a non-disclosure agreement. (A McKesson spokesman declined to answer a list of detailed questions, including whether it pays fees to doctors for infusions. “The implication that McKesson Canada impacts prescribing rates of Remicade is categorically false,” spokesman Darius Kuras wrote in an e-mail.)

Ms. Morgan, a nurse who began managing the clinic last spring, said the ethics of accepting fees for infusions from a drug company has never come up as a concern for the clinic’s doctors, who like that the infusion room allows them to keep a closer eye on patients. “We are a not-for-profit,” she said. “We just need [our staff’s] time to be reimbursed and our space to be reimbursed.”

Innovative Medicines Canada, the industry group that represents makers of brand-name drugs, has a Code of Ethical Practices that prohibits its member companies from making payments to doctors that could be construed as an incentive to prescribe a particular medication. Both Janssen and Pfizer say infusion fees don’t break the industry’s Code of Ethics. “We’ve been through this with [Innovative Medicines Canada],” said Andy Williams, Janssen Canada’s vice-president of sales and marketing for immunology drugs. “The practice is not a secret and it’s certainly not unique to Janssen. All the elements of the practice have been scrutinized, per the code, and have been deemed to be not in violation.”

On its face, infusion fees would also appear to break a 2004 Ontario law designed to prevent third parties from paying doctors to perform services that are paid for by the Ontario Health Insurance Plan (OHIP). Providing infusions of Remicade is an insured service in Ontario, according to the Ministry of Health and Long-Term Care. Doctors can bill $54.25 per infusion.

Janssen disputes this as well: Citing fine print in the schedule of benefits for physicians in Ontario – home to 31 of Janssen’s 46 in-office infusion locations – the company argued that doctors cannot bill anything to the public system for providing infusions in their offices. The Ontario ministry, presented with Janssen’s interpretation, disagreed.

Either way, Janssen spokeswoman Teresa Pavlin said, the company’s contracts make clear that the fees are not to be treated as an incentive to prescribe and that doctors can’t bill the public purse while also accepting infusion fees for the same service. “While the ultimate responsibility lies with physicians to ensure that they utilize available billing codes, Janssen has never been informed of the availability of such codes until now.”

Ontario government bureaucrats, however, had concerns about the fees to doctors. A 2017 briefing note drawn up for Ontario’s deputy health minister, and obtained by The Globe through a Freedom of Information request, flagged the risk that infusion fees “may be viewed as incentives for physicians to prescribe and administer select drugs.”

Matthew Herder, the head of the Health Law Institute at Dalhousie University in Halifax, is even blunter. “It’s a huge ethical question,” Mr. Herder said of the per-infusion fees. “There are clear grounds for a complaint on conflict of interest.”

Nav Persaud, a family physician and associate scientist at St. Michael’s Hospital in Toronto who studies pharmaceutical policy, called the per-infusion fee structure a “high-risk scenario” for undue influence on prescribing behaviour. “It’s hard for me to think of a higher-risk situation.”

The Ontario briefing note does not mention Janssen or Remicade by name, but it does enumerate the risks inherent in letting brand-name biologics makers pay infusion fees: “Physicians may be influenced to prescribe a certain biologic; physicians may be reluctant to switch or start their patients on biosimilars due to fees paid to the physician by the brand manufacturer; [and] the ministry’s savings potential due to market entry of biosimilars may be less than expected if physicians continue to get administration fees for branded biologics.” (The writers of the briefing note seemed unaware that Pfizer had also begun paying doctors $275 fees for infusions of Inflectra.)

Despite those concerns, Ontario’s former Liberal government took no public action against drug or specialty pharmacy companies who paid these fees, or doctors who accepted them, before the Progressive Conservatives swept them out of office in June. Now, Janssen says it is phasing out its in-office infusion program, because it has enough private clinics to satisfy the demand for Remicade.

Doctors’ offices are not the only places accepting fees from drug companies, including Janssen, for every infusion.

Toronto Western Hospital, part of the University Health Network (UHN), also accepts a fee of $275 for every infusion of Remicade – and Pfizer’s Inflectra, for that matter – provided in its outpatient infusion clinic, which was founded nearly 20 years ago to facilitate a clinical trial of Remicade.

In fact, a Janssen-paid patient support program co-ordinator had worked inside the Toronto Western clinic from 2000 until late last year, educating patients and helping them to secure insurance coverage of Janssen drugs. (UHN ordered the job description changed last fall after The Globe asked about a Janssen want ad seeking to replace the co-ordinator. The post has not been filled.)

The payments for infusions go to the budget of UHN’s Division of Rheumatology – not into doctors’ pockets – and cover nursing services at the clinic. But if UHN doctors prescribe alternative medications that patients swallow or inject at home, the hospital earns nothing.

In 2017-18, infusion payments brought in $153,725 for UHN, the vast majority for Remicade infusions.

Although Jorge Sanchez-Guerrero, the chief of the division of rheumatology at UHN, says “there are many, many advantages” to providing infusions in a hospital outpatient clinic, where doctors can swoop in if a patient reacts badly to an infusion, he acknowledges a stark fact as well: UHN couldn’t afford to run the clinic without financial support from the pharmaceutical industry.

Dr. Sanchez-Guerrero also oversees the division of rheumatology at Mount Sinai hospital, a few blocks east of UHN’s Toronto Western site. Mount Sinai’s outpatient infusion clinic, a larger operation that infuses seven different drugs and employs 14 staff, earns between $400,000 and $600,000 in infusion fees per year, according to spokesperson Sally Szuster.

Ms. Szuster wouldn’t divulge the per-infusion payment for each drug, citing confidentiality agreements. About one-third of the patients who received infusions of any kind at the clinic in the first six months of this year were on Remicade, she said.

Neither UHN nor Mount Sinai could point to any other outpatient services for which a third party’s payments cover nursing. And health officials across the country told The Globe that when patients don’t live near a private infusion clinic, Remicade – purchased by the patient from a pharmacy – is usually infused at a local hospital’s outpatient area or emergency department, with the nursing costs covered by the hospital budget.

As Bruce Conway, a spokesman for Alberta Health Services, said of the per-infusion fees, “We have never explored that option due to the potential for a perceived conflict of interest.”

Adam Scully was on the cusp of his 18th birthday when he learned he had Crohn’s disease. The diagnosis in January of 2010 explained the searing pain radiating from his small intestine and into his esophagus. “It was as if somebody stabbed me right here,” Mr. Scully, now 26, says, pointing to the middle of his chest. “I couldn’t move.”

At first, he tried a steroid and an immunosuppressant to manage his symptoms, but by early 2012 his condition had worsened. He remembers howling in pain during a colonoscopy at Mount Sinai.

Immediately after the colonoscopy, Mr. Scully’s gastroenterologist, Dr. Hillary Steinhart, invited Mr. Scully and his mother, Ruth, to his office to recommend that Mr. Scully start on an anti-TNF drug.

Dr. Steinhart told him he could choose between a drug Mr. Scully would inject at home and one that would require two-hour visits to an infusion clinic every eight weeks. His needle-phobia led him to pick the latter – Remicade. Someone from a program called BioAdvance would be in touch soon, Dr. Steinhart said. “Literally from the drive from Sinai to here, she had already called us,” Ruth Scully said in an interview from the family’s home, about half an hour from Mount Sinai. “It was like a godsend.”

BioAdvance is Janssen’s patient-support program. The person who so swiftly called was a Janssen-employed nurse and BioAdvance co-ordinator who would act as Mr. Scully’s personal concierge, ushering him on to Remicade. For starters, she handled the paperwork required to have Mr. Scully’s Remicade partly covered by his mother’s insurance.

When, less than a year later, Mr. Scully graduated from college and started working as a freelance TSN producer without benefits, the BioAdvance co-ordinator showed him how to pay rent to his parents, which would help him qualify for a provincial drug plan that would have been off-limits to him if his meagre income had been lumped in with that of his parents.

She scheduled the tests Mr. Scully needed before his first Remicade infusion, and has helped schedule the subsequent infusions that have dramatically improved his health.

Cadillac service from a pharmaceutical company – especially service that builds loyalty to a particular brand of drug – might seem at odds with the pride Canadians take in publicly funded medicine. But because Canada lacks a national pharmacare program, unlike most prosperous countries, it is exceptionally reliant on the drug industry to fill consequent gaps in health care.

Pharmaceutical companies in Canada spent just over $900-million to serve 673,000 patients enrolled in Patient Support Programs in 2016, according to a report commissioned by the industry group Innovative Medicines Canada.

Many in Canada’s pharmaceutical world trace the Patient Support Program phenomenon back to the wild success of the program set up to sell Remicade.

“[The private clinics] started out as a limited initiative that allowed the drug to be marketed. If you can’t infuse it, you can’t sell it,” says Brian Feagan, a gastroenterologist at London Health Sciences Centre and a professor of medicine at the University of Western Ontario. “But that initiative actually allowed them to build value-added services … that aren’t provided by the health-care system.”

Schering-Plough (the company that launched Remicade in Canada), and later Janssen, offered lab tests during infusion appointments and, with patient permission, fed the results back to doctors, Dr. Feagan notes.

The company assigned personal nurse co-ordinators to every patient, to educate them about Remicade, schedule their infusion appointments, and handle the voluminous insurance paperwork required to start new users on a high-priced drug. Such time-consuming work would be left to doctors or their administrative staff if not for help from a company that stands to benefit financially every time a new patient starts on its drug.

BioAdvance, and now other Canadian Patient Support Programs, often “bridge” patients with free drugs until their insurance coverage comes through. But BioAdvance, says Ms. Morgan, manager of the Kensington Screening Clinic, is the gold standard. “So when a doctor is trying to get his or her sick patient to treatment the fastest, they typically tend to go with BioAdvance.”

And that means they tend to go with Remicade, or with one of the newer Janssen drugs that are now part of the BioAdvance program.

Competing drug makers have scrambled to keep up. Some pharmaceutical companies contract out their Patient Support Programs to third parties, as Pfizer has done with Inflectra, by using Innomar Strategies not only to run infusion clinics but also to administer the Canadian support program.

And drug companies, like any other successful business, move heaven and earth to keep a customer’s loyalty once it’s won. “As soon as you decide to change to another product, you can be sure that the nurse will call you the day after to ask you, well, what is happening? Why do you prefer to stop the treatment with us?” says Mr. Gagnon, the Carleton University professor.

When the not-for-profit benefits carrier Green Shield Canada launched a pilot project earlier this year that allowed participating companies to force their workers to switch from brand-name Remicade and Enbrel to a biosimilar – or pay the difference in cost – Janssen sent a letter directly to Remicade patients warning them they would lose their BioAdvance services if they switched.

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In June of 2013, Janssen gathered eight eminent physicians in Toronto for a roundtable discussion. The company paid each of them approximately $4,000 to work on a paper, which would later be published in an obscure but peer-reviewed scientific journal called Biologicals. The subject of the article was biosimilars and “challenges” with one aspect of the approval process in Canada, the U.S. and Europe.

All the participants signed off on the paper’s conclusions, but a Janssen employee drafted and revised it, a fact disclosed in the fine print.

Not disclosed, however, was Janssen’s plan to use the article in a public-relations blitz against biosimilars. A November, 2014, Janssen PowerPoint presentation, obtained by The Globe and Mail, prepared for the company’s community-and government-relations teams, outlined a plan to “drive support for Remicade,” in part by “leverag[ing] timing of Biologicals article publication.”

As London gastroenterologist Dr. Feagan, the paper’s lead author, and Robin Thorpe, the journal’s editor-in-chief, both pointed out in interviews, there is nothing incorrect or, on its face, biased in the article. The paper merely raised concerns at a time when biosimilars were relatively unknown.

But Richard Smith, a past editor of the BMJ (formerly the British Medical Journal) who has written widely about the pharmaceutical industry’s manipulation of medical journals, said: “A little bit of doubt, in these circumstances, is going to go a long way.”

Ambiguity is something that comes easily in the field of biologics. And with that ambiguity comes an opening for yet more doubt – and profitable doubt, at that.

First, the ambiguity: Knock-offs of biologic drugs are called biosimilars, not biosames, because such drugs are not absolutely identical, the way generics are, to the brand-name drugs they mimic. With each new batch of lab-produced cells, biologics morph, albeit in very tiny ways.

It’s a distinction with practical implications. In Canada, pharmacists, at the behest of private and public payers, can swap in generic drugs without a doctor’s say-so. But they are not allowed to do the same with biosimilars, because of rules in every province.

Those rules are rooted in Health Canada’s decision not to declare any biosimilar 100-per-cent “interchangeable” with its brand-name counterpart. That designation, the regulator fears, could unleash unlimited switching between many copies made by different drug companies, decades in the future. Such multiple switches could, at least in theory, provoke an immune response in some patients, diminishing the drug’s effectiveness. As well, the brand-name drug and its copies could grow further apart, as minuscule differences in the molecules pile up over decades, a phenomenon known as manufacturing drift.

That said, it’s perfectly safe for patients to switch once or even a few times – regardless of how long they’ve been taking the brand-name biologic, according to Anthony Ridgway, a senior regulatory scientist at Health Canada.

“When we say a drug is safe and efficacious for that clinical indication,” he says, “then people should count on that as being correct.”

Yet that message seems not to have filtered down to Canadian physicians, who tend to err on the side of caution with even the most theoretical of Health Canada’s concerns. And so, from ambiguity, an opening for Janssen to sow yet more doubt – the kind that could help keep biosimilars from making it onto prescription pads.

In another PowerPoint presentation, this one produced for Janssen’s Ontario government-relations and community-relations teams, staff laid out their strategy for influencing patient-advocacy groups, provincial officials – and doctors. This was two months before Health Canada approved Inflectra as a Remicade biosimilar.

The document singled out the Ontario Association of Gastroenterology (OAG) as one rich target for “advocacy development” in the first quarter of 2014. Keeping specialists in inflammatory bowel disease onside would be essential: About three-quarters of the Remicade used in Canada is for Crohn’s and colitis, which don’t have nearly as many biologic treatment options as does rheumatoid arthritis.

“To date, OAG has lagged behind other physician associations with respect to both knowledge on SEBs [biosimilars] and advocacy ability,” one slide reads. “Following OAG January conference which will include SEB session, encourage OAG to develop position statement on SEBs. … source potential [government relations] consultants to work with OAG.”

The OAG turned down multiple interview requests with The Globe and declined to answer e-mailed questions about whether it had, in fact, developed a position statement on biosimilars at Janssen’s urging. “At this time,” Melonie Hart, a spokeswoman for the OAG, wrote in March, “the OAG leaders are not available to respond to your lengthy questionnaire as they are too busy attending to the needs of their patients.”

Julia Brown, Janssen’s vice-president of government affairs and market access, told The Globe that whatever ideas may have been discussed internally during a PowerPoint presentation, the company’s internal compliance department would never green-light payments to third-party consultants to guide the OAG; nor would it allow the company to help any group craft a position statement without making Janssen’s financial support clear in the document.

The OAG did, however, ultimately publish a position statement – which Janssen said it did not fund in any capacity – on biosimilars in September of 2016. That statement discouraged the “non-medical switching” of existing patients away from the brand-name biologic to a biosimilar.

If Canada had a single-payer national pharmacare program, it could (in theory, at least) force all patients taking Remicade to switch to a biosimilar tomorrow – simply by refusing to cover the cost of the brand-name version.

In B.C. alone, according to a 2016 briefing note for the province’s health minister, “If switching were supported, then the province could save more than $30-million each year. If all payers took advantage of the lower cost [of biosimilars] then the total provincial savings would be about $50-million per year.”

One way that Janssen tries to keep such “switching” from occurring is by striking what are known as product-listing agreements, or PLAs, with private insurers: In exchange for a discount off the list price of Remicade, private insurers provide some manner of protection for it, the details of which are confidential. The agreements for high-priced drugs of all kinds have become popular with insurers trying to tame runaway drug costs in the short run.

The Remicade deals are an especially big hit. According to a Nov. 18, 2016, e-mailfrom a Janssen official to an Alberta MLA, obtained through a Freedom of Information request, Janssen’s offer to be “cost competitive with biosimilars has been enthusiastically received” by companies covering more than 90 per cent of privately insured Canadians.

Critics of the Remicade deals with private insurers, however, argue the confidential deals have helped block the biosimilar drug Inflectra from the market, stifling competition. Green Shield, the not-for-profit benefits carrier, has rejected such overtures, while elevating biosimilars to preferred status in its benefit plans. According to Ned Pojskic, the pharmacy strategy leader at Green Shield, even if the confidential deals merely put Remicade and the biosimilar on equal footing, the biosimilar would still be at a disadvantage. “What that practically translates into is nobody prescribes the biosimilar,” he said. “[That’s] because of lack of familiarity, lack of understanding and, quite frankly, some of the fear-mongering that went on in the market in the early days.”

When Janssen began locking down its first round of product-listing agreements for Remicade, it’s unlikely the country’s private insurers knew what their counterparts in the public sector would achieve in their own price negotiations with Pfizer, the maker of biosimilar Inflectra. Ultimately, in 2015, Pfizer reached an agreement with the pan-Canadian Pharmaceutical Alliance – which negotiates group drug discounts on behalf of Ottawa and the provinces and territories – to offer Inflectra at $525 a vial, roughly half the list price of Remicade.

In an unusual move, the federal-provincial-territorial alliance and Pfizer agreed to reveal the size of that discount and make it available to all payers, government and private alike; the provinces, in turn, promised to promote cheaper biosimilars by refusing to cover Remicade for new patients. But before the deal was revealed, Janssen officials guessed the discount for Inflectra would be less generous than it ended up being – “possibly 25-30% less than Remicade (room to go lower)” – according to the November, 2014, PowerPoint presentation obtained by The Globe.

So, did private insurers lock in a price for Remicade that was higher than that ultimately settled on for Inflectra? With the private payers sworn to secrecy, only Janssen knows for sure, although Janssen says its confidential PLAs have made Remicade “cost competitive” with the biosimilar and don’t in any way prevent physicians and patients from choosing other drugs.

“All of us have learned through the Remicade experience,” said Stephen Frank, the president of the Canadian Life and Health Insurance Association, which represents private insurers. “There are things we’re going to look to do differently in the future.”

Janssen has aimed a similar divide-and-conquer strategy at individual provinces. The pan-Canadian Pharmaceutical Alliance asks pharmaceutical companies to make proposals to its central office, but Janssen has ignored that request and pursued side deals on Remicade anyway, according to a 2017 Quebec court case and other documents obtained by The Globe through Freedom of Information requests.

In an Oct. 31, 2016, letter to Janssen president Chris Halyk, the pan-Canadian Pharmaceutical Alliance explained that it was rejecting an unsolicited discount offer on Remicade. “[The] pCPA understands that the motivation behind the submitted proposal and willingness for Janssen to now offer value is due to the introduction of competition from [a biosimilar] …” the letter says. “The manufacturer is kindly requested to communicate with the pCPA office directly and not approach the individual jurisdictions,” the letter reads.

Quebec Superior Court Judge Brian Riordan thought the letter was extraordinary enough to quote in full in his Nov. 27, 2017, dismissal of a Janssen court challenge against Quebec’s decision to stop covering Remicade for new patients. Janssen is appealing.

Janssen has cast its line in other provinces, too.

Adrian Dix, B.C.’s Health Minister, wouldn’t divulge details of Janssen’s offers to his province, but said the terms were unacceptable to a government that supports the pan-Canadian Pharmaceutical Alliance’s efforts to promote biosimilars. “People talk about how one funds a national pharmacare program,” Mr. Dix says. “One of the ways one does that, surely, is to reduce the overall costs of drugs through collective action.”

But voluntary collective action apparently has its limits. In a Jan. 25, 2017, e-mail to colleagues, Grant Wyand, then PEI’s acting director of pharmacare, floated the idea of accepting a Janssen offer by which the company would provide Remicade at less than the cost of Inflectra in exchange for the PEI government agreeing to cover Remicade for new patients on the island. “This is offside with pCPA,” Mr. Wyand noted.

Further e-mails among the PEI bureaucrats revealed that, after the province passed its policy limiting new patients to Inflectra, physicians were simply prescribing other brand-name drugs, mainly the injectable, Humira, instead of the biosimilar.

In February of 2018, PEI announced that it had changed its rules to cover Remicade for new patients, breaking with the pan-Canadian Pharmaceutical Alliance.

Ms. Brown, the Janssen VP, says the company’s offer to the negotiating alliance remains on the table. As for why Janssen kept making its offer in provincial capitals, she said: “We still knew there were provinces … who had concerns about patient choice and about cost and wanted to talk to us.”

When Renate Rasokas of Tillsonburg, Ont., switched to Inflectra in September of 2015, it was “not a big production.” Her rheumatologist, Janet Pope, said the biosimilar was cheaper and designed to work as well as Remicade, the drug that had been relieving her arthritis pain for 14 years. Ms. Rasokas, now 66, didn’t hesitate: “I trust her,” she said of Dr. Pope. “I knew she wouldn’t lead me astray.”

Dr. Pope, the chief of rheumatology at St. Joseph’s Health Care in London, says her clinical group decided long ago to refuse infusion fees from drug companies. She doesn’t enroll her patients in pharma-sponsored support programs, either, unless they need help paying for their drugs.

For that reason, Ms. Rasokas’s transition to Inflectra was seamless. Dr. Pope’s own staff kept booking her infusion appointments at the St. Joseph’s outpatient clinic, just as they always had. Three years later, she’s still doing well on the biosimilar.

Ms. Rasokas’s switching experience is a lot like what happens in much of Europe, where public health-care systems, not drug companies, co-ordinate and provide infusions of biologics inside hospitals. Unlike Canada, those countries have national pharmacare.

Earlier this year, the federal government launched the Advisory Council on the Implementation of National Pharmacare, tapping former Ontario health minister Eric Hoskins to lead it. Currently crisscrossing the country in search of feedback, the council is scheduled to produce a final report next spring, six months before Canadians vote in an election that may be defined, in no small part, by competing visions of prescription drug coverage.

In an age when biosimilars hold out the hope of huge savings to governments, insurers and patients, the council’s timing is certainly apt. Merck has just launched a second biosimilar of Remicade here. Canada pays the third-highest drug prices among the countries in the Organization for Economic Co-operation and Development, and spends more per capita on prescriptions than any country except the United States and Switzerland.

Canada’s drug-pricing regulator predicts the biosimilar versions of Remicade alone could save the system anywhere from $91-million to $514-million every single year – but not if the near-copies can’t get a toehold here.

Indeed, Janssen has managed, with its suite of tactics, to block biosimilar Inflectra from the market almost completely: Of every $100 of infliximab that is sold in Canada today, $97 of it is still sold as Remicade. By contrast, several European countries with single-payer pharmacare systems have already cajoled or forced the majority of patients to switch to a biosimilar, saving immense amounts of money.

More than 90 per cent of the infliximab sold in each of Poland, Norway and Finland is a biosimilar. In Britain, it’s 80 per cent. In Sweden, it’s 70. The OECD average is 35 per cent. In Canada, only 2.7 per cent of the infliximab sold in 2017 was a biosimilar.

Like generic drugs before them, biosimilars could free up money for governments and private insurers to cover the newest generation of miracle cures, including expensive gene therapies, said Michael Guirguis, a drug stewardship pharmacist with Alberta Health Services, the agency that runs front-line health care in Alberta.

Although he spoke for himself, not AHS, he is worried about what will happen if Canada misses the boat on money-saving biosimilars. “This is a once-in-a-generation opportunity for health care in Canada.”

https://www.theglobeandmail.com/canada/article-how-a-blockbuster-drug-tells-the-story-of-why-canadas-spending-on/