Update: The proposed Guidelines will not be implemented on January 1, 2023 as previously planned.
On October 6, 2022, the Patented Medicine Prices Review Board (PMPRB) released its revised draft Guidelines to give effect to the July 1, 2022 amendments to the Patented Medicines Regulations. Submissions are due by December 5, 2022.
The Guidelines provide criteria that PMPRB staff will consider in determining whether the price of a patented medicine warrants an investigation, which could lead to a recommendation for a hearing to determine whether the price of the patented medicine is excessive. Neither the current Guidelines (last updated in February 2017) nor the 2020 draft Guidelines address the final amended regulations. Pending the finalization of the revised Guidelines, the PMPRB is applying a “status quo” to pricing relating to the amended regulations.
As described in the backgrounder that accompanied the draft Guidelines, proposed changes include:
- Investigation criteria: Instead of separating patented medicines into different therapeutic categories with different excessive price tests, the Guidelines introduce the concept of “investigation criteria”. Staff may open an investigation into the price of a patented medicine when certain criteria are present. Different criteria would apply depending on whether the medicine is a “new” or “existing” medicine (see #3 below).
- List Prices: Under the Draft Guidelines, the proposed investigation criteria apply to list prices only and will not fluctuate annually based on average transaction prices (ATP) the year before and a formula derived from the Consumer Price Index. While rights holders would still need to file their ATP with the PMPRB, the ATPs would only be taken into account in the context of proposed undertakings by rights holders to offset potential excess revenues from the sale of a patented medicine that is subject to an investigation.
- New and existing medicines: The Draft Guidelines distinguish between “existing” medicines (those that received a notice of compliance prior to July 1, 2022 and line extensions of same) and “new” medicines (all other medicines) and propose to apply less probing investigation criteria to the former. As this distinction does not arise from the Regulations, once an investigation is opened, Staff would apply the same level of regulatory scrutiny to all medicines in determining whether to recommend the commencement of a hearing.
- Waiver of filing requirements for medicines believed to be at lower risk of excessive pricing: Under the amended Regulations, patented over-the-counter (OTC) medicines, certain non-prescription controlled substances, and generic and veterinary medicines are not required to file pricing and other information with the PMPRB unless specifically requested to do so by the PMPRB. The draft Guidelines expand this list to biosimilars and vaccines. For all such medicines, a complaint would automatically result in the opening of an investigation.
Should you have any questions, please do not hesitate to contact a member of the Life Sciences Regulatory & Compliance Group.
The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.