Pangaea Express: PMPRB Guidelines

November 22, 2019

By Marla WeingartenSuzanne Solman

The Draft PMPRB Guidelines were released yesterday to explain how the amended Patented Medicines Regulations, that go into effect July 1, 2020 will be implemented. The consultative period will only be for 60 days, closing on January 20, 2020.

Stated upfront in the “Interpretation” section of the Draft Guidelines is the proclamation that, “In exceptional circumstances or in the event of a hearing, any methods or tests deemed appropriate and consistent with the Act and Regulations may be used by the PMPRB, regardless of whether they are addressed in the Guidelines or otherwise differ from the approach set out therein. In no case will Staff or Board members be bound or limited by these Guidelines." As such, there may be pricing tests, not identified in the Guidelines, that are deemed appropriate and could be used by the PMPRB.

As identified in the amended Regulations, Category 1 drugs (annual treatment cost > 50% of GDP/capita or market > $25 million/year revenue), will be subject to a Maximum Rebated Price (MRP) ceiling determined by a pharmacoeconomic test and market size adjustment. The Draft Guidelines reveal that PMPRB will default to CADTH for the primary source of cost-utility analysis models. INESSS reports will only be used where CADTH reports are unavailable or do not meet the criteria defined in the guidelines.

Grandfathered patented medicines (received DIN on or before August 21, 2019), will only be subject to the Maximum List Price (MLP) based on the PMRPB11 and not subject to an MRP. The Draft Guidelines “Backgrounder” explains that drugs sold through the Special Access Program (SAP), will not be grandfathered as these drugs are not assigned a DIN. As well, line extensions of existing products that are assigned a DIN after August 21, 2019 will not be grandfathered even though the original product, received a DIN prior to August 21, 2019 and would therefore be grandfathered.

It is not surprising, in light of the Alexion case where the Lowest International Price Comparison (LIPC) test was deemed acceptable, that the Draft Guidelines are clear that the PMPRB are not actually bound by what is in the Guidelines! As industry plans for the consultative process, analyses and models will be constructed to better understand the impact of the pricing Guidelines.

For more information, please contact Suzanne Solman or Marla Weingarten.