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When the B.C. government decided to create a task force to examine pharmaceutical policies, it would have been natural to invite Steve Morgan onto the team. Morgan, head of the pharmaceutical-policy program at UBC's Centre for Health Services and Policy Research, has published more than 50 papers and reports on pharmaceutical policy and health economics. As an economist, Morgan researches how to obtain more pharmaceutical benefits for governments at a lower cost. This coincides with the B.C. government task force's mandate to "achieve and maximize value for patients in procuring pharmaceuticals".

However, Health Minister George Abbott chose not to ask Morgan–who has exposed deficiencies in the B.C. government's PharmaCare policies–to be a member of the nine-member panel when it was announced last month. Instead, Abbott loaded up the task force with government officials, university administrators who sometimes seek funding from the drug industry, and representatives of the British Columbia Medical Association and the corporate sector. Among those selected was Russell Williams, president of Canada's Research-Based Pharmaceutical Companies, which is the industry association that lobbies governments on behalf of the drug companies.

On December 10, Morgan attended a forum at SFU Harbour Centre with other critics of the pharmaceutical industry to share his research with the public. Billed as the Canadian Health Coalition's "national drug plan hearings", the event was designed to generate support for a national PharmaCare program to make prescription drugs more affordable.

Morgan began his presentation by explaining that there has been a "steady but controlled growth" in public expenditures on hospitals and on physicians' services. He noted that prescription-drug costs have historically been "under the radar" in policy debates because their percentage of public expenditure was traditionally quite small compared to the cost of hospitals and doctors. But in recent years, expenditures on prescription drugs have shot up sharply.

He noted that around 1997, the cost of pharmaceuticals surpassed the cost of physicians' services in Canada, and the gap has been growing ever since. "If we were to freeze Canadian expenditures on pharmaceuticals for just one year–that is, if in 2008 we promised ourselves as a nation that we would only spend roughly 28 or 29 billion dollars that we spent on drugs in this past year–we would save enough money to pay for the services of 10,000 primary-care doctors," Morgan said.

He said that Quebec, Nova Scotia, and New Brunswick spend 12 percent or more above the national average, whereas B.C. spends as much as 20 percent below the national average for prescription drugs on a per capita basis. If Quebec matched B.C.'s expenditure rate on a per capita basis, he said, that province would save enough money to pay for 10,000 nurses.

Morgan then went on to describe how the Pharmaceutical Management Agency of New Zealand, known as PHARMAC, has managed to contain drug costs while covering 80 percent of pharmaceutical costs in the country. He noted that in Canada, governments cover only 40 percent of the cost of prescription drugs.

PHARMAC, a New Zealand Crown entity created by district health boards, has contained spending increases on drugs to one to three percent per year by adopting a firm approach in dealing with pharmaceutical companies. It holds tenders before buying drugs, much like Canadian hospitals. However, PHARMAC also does tendering outside of hospitals, unlike here.

It applies reference pricing–in which new drugs must demonstrate substantial benefits if they're to be sold at higher prices than older drugs–to almost all pharmaceuticals, rather than to a limited number of categories as occurs in B.C. In addition, Morgan said, PHARMAC sometimes persuades drug manufacturers to reduce the cost of older drugs in return for being allowed to bring a patented new brand onto the market.

Morgan said that PHARMAC also makes deals with drug manufacturers to get them to reduce their "sticker price" in return for bulk purchases or for ensuring a multiyear contracts. "Nobody but Canadians pay the sticker price for pharmaceuticals," he quipped.

The financial benefits are staggering for New Zealand's residents. Morgan said the proof came when UBC researchers compared the cost of drugs in the four largest therapeutic categories: statins for high cholesterol; angiotensin-converting enzyme (ACE) inhibitors for hypertension; selective serotonin reuptake inhibitors (SSRIs) for depression; and proton pump inhibitors (PPIs) for gastrointestinal problems such as ulcers and heartburn.

The study relied on B.C. prices, which are lower than the national average. It showed that Canadians pay $4.5 billion per year for those four categories, whereas the cost would shrink to $2.3 billion if Canadians paid New Zealand prices. Morgan said this demonstrates the value of a national PharmaCare program.

"Anyone who says it's not affordable is fooling themselves or trying to fool you into believing something that's not true," he said.

According to a paper that Morgan and other researchers published earlier this year, the price differential between B.C. and New Zealand for brand-name-matched ACE inhibitors was 78 percent, whereas it was 45 percent for statins, and 15 percent for PPIs. There was no difference among brand-name-matched SSRIs.

NDP health critic Adrian Dix, who attended the forum, told the Georgia Straight that he thinks B.C.'s PharmaCare program "should be flexing its muscles in a variety of ways" in its dealings with pharmaceutical companies. Otherwise, he said, the government would be giving hundreds of millions of dollars to an industry that's overcharging the public.

Dix also said he thinks Abbott should have included representatives of consumers' interests on the B.C. government's pharmaceutical task force. However, in Health Minister Abbott's universe, there wasn't a place for Steve Morgan, despite his extensive research into how New Zealand has saved taxpayers tens, if not hundreds, of millions of dollars on drug costs.

When contacted for an interview with Abbott, Health Ministry representative Sarah Plank said she could only supply a written statement.