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The Pricing of Patented Drugs in Canada: Stakeholder Consultation Period Open Until June 28, 2017

Authored byDaphne Lainson

The Patented Medicine Prices Review Board (PMPRB) regulates the price of patented medicines in Canada by determining whether a price is excessive. The Board is revisiting its approach to pricing, and has now released a consultation document that proposes a number of changes to the Patented Medicines Regulations. The consultation document can be accessed here. The comment period expires on June 28, 2017.

This is the second public consultation on the pricing framework. In June of 2016, the Board requested feedback on its Guidelines (see here), with public submissions available here.

The PMPRB has posed a number of consultation questions in the consultation document. These questions are directed to five proposed changes to the Regulations, which are summarized below:

1. New factors to determine whether a price is excessive

The PMPRB is proposing adding the following three factors to the Regulations when determining whether a medicine is being or has been sold at an excessive price:

  • The pharmacoeconomic evaluation for the medicine and other medicines in the same therapeutic class in Canada and in countries other than Canada;
  • The size of the market for the medicine in Canada and in countries other than Canada; and
  • Gross Domestic Product (GDP) in Canada.

These factors would be in addition to those presently set out in the Patent Act. Generally stated, these factors are: the prices at which the medicine has been sold in Canada; the prices at which other medicines in the same therapeutic class have been sold in Canada; and the prices at which the medicine and other medicines in the same therapeutic class have been sold in the “PMPRB7”. The PMPRB7 is the current list of countries against which drug prices are benchmarked. These countries are: France, Germany, Italy, Sweden, Switzerland, the UK and the US.

2. Replacing the PMPRB7 with the PMPRB12

The PMPRB is proposing dropping the US and Switzerland from the basket of PMPRB7 countries, and adding: Australia, Belgium, Japan, the Netherlands, Norway, South Korea and Spain. France, Germany, Italy, Sweden and the UK would be maintained.

3. Generic drugs

The PMRPB is proposing that certain reporting for generic drugs—for which there is a patent—and which drugs are approved by way of an Abbreviated New Drug Submission before Health Canada, will only be required in the event of a complaint or at the request of the PMRPB. This addresses recent judicial decisions finding certain generic products under PMPRB jurisdiction.

4. Reporting requirements for patentees

The new factors under the first item will require new information. The PMPRB is proposing that the Regulations be amended to require the following information, where it is available to the patentee:

  • For pharmacoeconomic evaluation, the Regulations would be amended to require patentees to submit the “cost utility analysis by approved indication of the medicine”; and
  • For the size of the market for the medicine, the Regulations would be amended to require the patentee to submit the “estimated uptake of the medicine, by approved indication, in Canada without restraint on utilization (e.g. market/budget impact analysis in any relevant market)”.

The PMPRB is not suggesting that patentees provide GDP information.

5. Third party rebates

The PMPRB is proposing amending the Regulations to require patentees to report to the PMPRB “all indirect price reductions, given as a promotion or in the form of rebates, discounts, refunds, free goods, free services, gifts or any other benefit in Canada”.

For any questions, please contact a member of our firm’s Pharmaceutical or Life Sciences — Regulatory & Compliance groups.

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.