Today, the PMPRB launched a consultation on Draft Guidelines intended to implement recent amendments to the Patented Medicines Regulations. The PMPRB also released a Q&A-style Consultation Backgrounder. Interested parties have 60 days, until January 20, 2020, to make submissions on the Draft Guidelines.

Background

As we reported, the Government released final amendments to the Patented Medicines Regulations on August 9, 2019. These amendments are scheduled to come into force on July 1, 2020 and are intended to lower the prices of patented medicines in Canada. They include: (1) new factors for assessing excessive pricing, (2) new powers to collect information regarding these factors, (3) new obligations to report indirect price adjustments, (4) risk-based reporting obligations for OTC and generic drugs, and (5) a revised list of international price comparator countries (the PMPRB11).

Rather than amending the PMPRB's existing Compendium of Policies, Guidelines and Procedures (Compendium), the Draft Guidelines state that they are intended to supersede all previous guidance documents, policy communiqués and written or verbal statements of any kind by the PMPRB regarding the administration of the price review process and investigations. The Draft Guidelines also make reference to the Patentee's Guide to Reporting, which has not yet been updated by the PMPRB in connection with the amendments.

The Draft Guidelines at a glance

Under the Draft Guidelines, different price review processes will apply depending on when the patented medicine received its DIN:

  • Grandfathered medicines. For patented medicines that received a DIN before August 21, 2019, the PMPRB will set a maximum list price (MLP) based on the lower of (1) the median international price across the new PMPRB11 and (2) the ceiling price set under the existing Compendium. A new process is provided for price calculations and adjustments going forward.
  • Non-grandfathered medicines. All other medicines (including non-DIN medicines, such as those distributed under the SAP) will be divided into either "Category I" or "Category II", based on 12-month treatment cost (greater than 50% of GDP per capita) and an estimated or actual market size exceeding $25 million.
    • All medicines will have an MLP set based on domestic and international price comparisons, then tested against the list price of the medicine. This will be the only price test for Category II medicines.
    • In addition, Category I medicines will have a maximum rebated price (MRP) set using the new excessive-pricing factors (pharmacoeconomics and market size), then tested against the average transaction price (ATP) computed net of rebates and other price adjustments.

For Category I medicines, a pharmacoeconomic price will be calculated based on a cost-per-QALY threshold of $60,000. This is higher than the threshold proposed in the Regulatory Impact Analysis Statement accompanying the amendments. The pharmacoeconomic price is used to set the MRP, subject to a Market Size Adjustment Methodology that may increase or decrease the MRP based on certain thresholds. This may result in a higher price ceiling for "rare disease or disorder" patented medicines.

The Draft Guidelines also include processes for reassessing the category or price ceilings of any patented medicine, including Grandfathered ones.

A number of differences from the current system are highlighted in the Consultation Backgrounder:

  • Price ceilings will no longer fluctuate annually based on the ATP of the medicine.
  • Prices of Category II medicines will only be assessed using list prices — not ATPs. As a result, rebates and other price adjustments will not be considered.
  • The number of markets and customer classes has been reduced.

The consultation: next steps

In addition to receiving written submissions from stakeholders, the PMPRB has also indicated that it will host a policy forum where stakeholders will be invited to appear in person to make their views known to the Board, as well as working groups to discuss specific questions and issues arising from the Draft Guidelines.

So far, the PMPRB has indicated that it will meet with various stakeholders in: Victoria, Vancouver, Edmonton, Regina, and Winnipeg during the week of December 2, 2019. The PMPRB has also scheduled a Civil Society Forum (distinct from government or business) for December 10, 2019 in Ottawa. Information about how to participate in the consultations is available on the PMPRB website.

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