SOLIRIS is a breakthrough drug indicated for the treatment of paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome, both rare and life-threatening disorders. According to the Board’s Guidelines, as a breakthrough drug, the highest price at introduction (the Maximum Average Potential Price, MAPP) is the median price of the seven comparator countries listed in the Patented Medicines Regulations. In subsequent years, the highest price is the lower of (i) the price from the previous year increased by the Consumer Price Index (CPI) or (ii) the highest price in the comparator countries (the Highest International Price Comparison, HIPC).
The Board considered its consumer protection mandate in determining whether the pricing was excessive according to the factors set out in s. 85(1) of the Patent Act which include: the prices at which the medicine has been sold in the relevant market; the prices at which the medicine has been sold in other countries; and changes in the CPI.
The Panel agreed with the Board Staff that the Guidelines were appropriate in assessing increases, but not in assessing the appropriate benchmark, agreeing with Board Staff that in “the unique circumstances of this case”, the appropriate benchmark was the LIP (the lowest international price), which was the United Kingdom price. The Panel assumed that by selling at the LIP in the UK, Alexion was covering its costs and earning a normal rate of return, found that no justification was provided as to why Canadians should be paying significantly more than in the UK (and the US), and considered the significant impact that the cost was having on the provinces’ health care budget.
The Panel rejected Alexion’s main argument that the Guidelines were not appropriate regarding the permitted increases in subsequent years as the fluctuations in the exchange rates and the appreciation of the Canadian dollar resulted in the Canadian price appearing higher than the international comparators, while the Canadian price remained unchanged, and in fact, decreased based on changes in the CPI. The Panel concluded that foreign prices must be converted to Canadian dollars for comparison purposes; exchange rate fluctuations are the responsibility of the patentee.
The Panel concluded that Alexion was selling SOLIRIS at an excessive price from 2009-2015, as the price exceeded the LIP. While the Panel believed the correct benchmark was the LIP as of the date of first sale, it only required Alexion to comply with this as of the date of the decision, as Board Staff had consistently applied the HIPC test until 2015. For the 2009-2017 period, the Guidelines were to be applied to calculate excess revenues, and the Panel will then issue a further decision, after which Alexion is to make payment.
Alexion has sought judicial review of the Panel’s decision.
Report comparing drug coverage by Canadian public drug plans
On October 11, 2017, the PMPRB announced the publication of a report titled “Alignment Among Public Formularies in Canada - Part 1: General Overview”. The report, based on 2015 data, compares lists of drugs covered by the public drug plans to determine the extent of overlap in drug coverage. The report’s key findings include:
“There is a reasonably high degree of alignment among public drug plan formularies in Canada.”
“Alignment among public plans is greatest for multi-source drug listings, which generally have a higher use and lower cost”; and
“Public plans are less well aligned in their listing decisions for single-source drugs, with more variability for high-cost drugs.”
Apo-Salvent proceeding discontinued
On September 21, 2017, in response to an unopposed request filed by PMPRB staff to discontinue the proceeding, a hearing panel discontinued an excessive-pricing proceeding relating to Apotex’s Apo-Salvent CFC Free (Order). The panel held that it was not in the public’s interest to continue the proceeding because, among other things, it had been on hold for approximately nine years and, given the passage of time, PMPRB staff “would face significant evidentiary challenges” if the proceeding was to continue.
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.