On Monday, December 11, 2017, the Patented Medicine Prices Review Board (PMPRB) released a scoping paper providing a high-level overview of how a new, risk-based approach to its mandate could function under revised Guidelines following forthcoming amendments to the Patented Medicines Regulations. This previews an official consultation on a revised set of proposed Guidelines that the PMPRB intends to hold in the spring of 2018.
As we reported, the government pre-published amendments to the Patented Medicines Regulations on December 2, 2017. 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 (the PMPRB12) that, notably, excludes the United States and Switzerland.
The scoping document describes a five-part proposal for revisions to the price review process.
- Part I: Interim international price reference test. The list price of all new drugs in Canada would be compared to the list price in the PMPRB12 countries. The Canadian list price would be considered potentially excessive if it exceeds the median of the PMPRB12 list prices.
- Part II: Screening. A variety of factors would be used to classify new drugs as either “high” or “low” priority based on their impact on Canadian consumers (patients and payers). In general, high priority drugs would include breakthrough drugs, high-cost drugs, and drugs addressing large patient populations or unmet needs. High-priority drugs would be subject to automatic investigation and a comprehensive review.
- Part III: High-priority drugs. The price of high-priority drugs would then be subjected to a two-part test:
First, the incremental cost per quality-adjusted life year (QALY) of the drug would be assessed, as determined by CADTH, against an explicit cost-effectiveness threshold.
Second, for drugs that meet the cost-effectiveness threshold, the potential for a further price adjustment would be assessed based on expected impact on payers within the first three to five years of launch.
If the price fails this two-part test, the patentee would be given an opportunity to explain why the price is not excessive, including using confidential commercial information (costs of making and marketing, “true” PMPRB12 prices, proposed rebates and discounts). If the price is found to be potentially excessive, the public ceiling price would continue to be set by international price referencing but the ceiling price resulting from application of the two-part test would remain confidential.
- Part IV: Medium and low-priority drugs.
- Medium-priority drugs (those with a minimum number of therapeutic alternatives and little-or-no therapeutic improvement over standard of care) would be subject to the same initial price test as high-priority drugs, and might also be required to meet a revised therapeutic class comparison test that requires each successive entrant to reduce its price relative to the price of the drug that preceded it.
- Low-priority drugs (those with a significant number of therapeutic alternatives and/or generic competition) would not be subject to an introductory or ongoing section 85 analysis, and would be investigated on a complaints basis only.
- Part V: Re-benching. The re-benching process, which is not described in detail, would ensure that previous determinations of potential excessive pricing and/or price ceilings remain relevant in light of a variety of factors (new indications, changes in market conditions), and might result in increases or decreases in ceiling price.
The PMPRB is not currently seeking feedback on the scoping document, but encourages stakeholders to reflect upon it in the lead-up to an expected first draft of the new Guidelines in the spring of 2018. The PMPRB expects to consult on the draft with a view to having new Guidelines in place by early 2019.
- The PMPRB’s Guidelines Scoping Paper can be found here.
- An HTML version of the proposed amendments to the Patented Medicines Regulations 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 to the Patented Medicines Regulations and associated RIAS can be found here.
- Health Canada’s portal for consultation on the proposed amendments to the Patented Medicines Regulations can be found here.