Pangaea Express: PMRPB Proposes Significant Revisions

May 31, 2017

Back in January 2016, federal, provincial and territorial Ministers agreed to work together to improve the affordability, accessibility and appropriate use of prescription drugs. Despite the substantial growth in high priced specialty medicines the Patented Medicines Regulations (“Regulations”) have not largely changed over the decades since the Patented Medicine Price Review Board (PMPRB) was first created in 1987. As such the pricing framework under the PMPRB is now undergoing revisions to ensure the price of patented drugs are not excessive.

On Tuesday May 16th, at the Economic Club of Canada, Health Minister Jane Philpott announced upcoming consultations on the regulatory changes related to the PMPRB. These amendments will bring about a risk-based approach to drug price regulation. The five important proposed changes to the Regulations include:

  1. Introducing new factors to help determine whether a price is excessive. Factors that would be considered: *The pharmacoeconomic evaluation for the medicine *The size of the market for the medicine in Canada and in countries other than Canada *Gross Domestic Product in Canada
  2. Amending the list of countries used for international price comparisons *Proposed countries include: Australia, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, South Korea, Spain, Sweden, United Kingdom
  3. Reducing regulatory burden for generic drugs with a patent
  4. Modernizing reporting requirements for patentees
  5. Providing information related to third party rebates
    *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 more details please see the report “Protecting Canadians from Excessive Drug Prices - Consulting on Proposed Amendments to the Patented Medicines Regulations”

So What does this all mean for the industry? - A LOT… For instance, in a situation where the market size grows substantially, a drug’s price may need to adjust downwards as the original price could be deemed excessive; the US would no longer remain as a country of price comparison and some of the newly proposed countries have much lower drug prices; transparency will now be taken to a whole new level and will affect the price ceilings determining excessive pricing.

Health Canada is seeking feedback from provinces and territories, consumer groups, private payers, the pharmaceutical industry, other stakeholders and any interested members of the public on proposed amendments to the Regulations, prior to their pre-publication in Part I of the Canada Gazette. This consultation period is 6 weeks, running from May 16, 2017 to June 28, 2017.

For more information please contact Marla Weingarten