On Friday, December 1, 2017, the government revealed proposed amendments to the Patented Medicines Regulations (the Regulations) conferring new powers on the Patented Medicine Prices Review Board (PMPRB) and setting the stage for revised Guidelines from the Board. Interested stakeholders have until February 14, 2018 to provide comments to the government. A definitive version of the amendments is expected to take effect on January 1, 2019.
The proposed amendments aim to empower the PMPRB to: (i) consider new pharmacoeconomic information as part of determining excessive pricing; (ii) require broader disclosure of price adjustments, such as third-party rebates under formulary listing agreements with the provinces; (iii) provide reduced reporting obligations for patented medicines perceived to be at low risk of excessive pricing; and (iv) address a new and expanded schedule of international comparator countries that, notably, excludes the United States and Switzerland.
The proposed amendments are driven by the modernisation initiative that began with the PMPRB in June 2016, when the Board published a consultation paper called Rethinking the Guidelines. In May 2017, the PMPRB announced that it had put its Guidelines consultation on hold and passed the baton to Health Canada, which published a consultation paper called Protecting Canadians from Excessive Drug Prices: Consulting on Proposed Amendments to the Patented Medicines Regulations. This paper addressed many of the same themes as the PMPRB’s consultation, but proposed to deal with them by amending the Regulations with the expectation that the PMPRB would then be better-equipped to rethink its Guidelines. Health Canada’s consultation on the paper concluded on June 28, 2017 and led to the proposed amendments.
The government states in the accompanying Regulatory Impact Analysis Statement (RIAS) that the objective of the proposed amendments is to “lead to lower prices for patented medicines in Canada that are more closely aligned with their value to patients and the health care system, and Canadians’ willingness and ability to pay.”
The proposed amendments would implement five policy changes:
- New factors for assessing excessive pricing. The PMPRB will be directed to consider three new factors when assessing excessive prices:
- Pharmacoeconomic value, as assessed by cost-utility analyses that measure cost per quality-adjusted life years (QALY). Patentees will not be required to prepare such analyses, but will be required to report them to the PMPRB within 30 days of publication by a publicly-funded Canadian organisation such as the Canadian Agency for Drugs and Technology in Health (CADTH) and the Institut national d’excellence en santé et services sociaux (INESSS).
- Market size for the drug in Canada, expressed as estimated maximum usage by quantity of the medicine sold in final dosage form. It is expected that patentees already prepare such analyses and will be required to keep them up to date with the PMPRB.
- Gross domestic product and per capita gross domestic product for Canada. These data will be obtained by the PMPRB from Statistics Canada.
- New powers to collect information regarding the pharmacoeconomic factors. The proposed amendments contain specific guidance regarding the triggers and timing for reporting cost-utility analyses and market size information, including special provisions for drugs that are already on the market.
- New obligations to report price adjustments. The proposed amendments expand the information required to be included when calculating average price per package and net revenue from sales for reporting in Form 2. These calculations will be required to factor in any price “adjustments that are made by the patentee or any party that directly or indirectly purchases or reimburses for the purchase of the medicine”. This is intended to include confidential third-party rebates paid to insurers under formulary listing agreements.
- More medicines to benefit from reduced risk-based reporting. The proposed amendments expand the existing categories of medicine that benefit from reduced reporting requirements because they are considered to be at a low risk of excessive pricing. The list now includes all non-prescription/over-the-counter drugs (including those containing controlled substances), veterinary medicines, and generic drugs (defined as those that were approved on the basis of an abbreviated new drug submission).
- Revised international comparators. The list of international comparator countries (previously known as the “PMPRB7”) is modified, deleting the United States and Switzerland while adding Australia, Belgium, Japan, the Netherlands, Norway, the Republic of Korea, and Spain. France, Germany, Italy, Sweden, and the United Kingdom remain on the list, which is now being referred to as the “PMPRB12”.
The RIAS accompanying the proposed amendments indicates that the new reporting obligations will apply to all patented medicines marketed on or after January 1, 2019, but only in respect of sales on or after that date. As with the current version of the Regulations, the proposed amendments assume that the PMPRB will fill in specific details regarding implementation through amendments to its Guidelines, which are expressed in the Compendium of Policies, Guidelines and Procedures and the Patentee’s Guide to Reporting.
- An HTML version of the proposed amendments and associated RIAS can be found here.
- An official copy of the Canada Gazette, Part I, Vol. 151, No. 48, setting out the proposed amendments and associated RIAS can be found here.
- Health Canada’s portal for consultation on the proposed amendments can be found here.