The Government is moving forward with changes to the PMPRB intended to lower the prices of patented medicines in Canada in order to lay the foundation for National Pharmacare. The changes are set out in final amendments to the Patented Medicines Regulations that were released on Friday, August 9, 2019. The amendments will come into force on July 1, 2020.

Once the amendments come into force, the PMPRB will use a different basket of price comparator countries. Significantly, the new basket excludes the US. The PMPRB will also consider new pharmacoeconomic market size, and gross domestic product (GDP)-based factors in its price tests and require patentees to report prices net of confidential rebates.

Overview of the amendments

The final version of the amendments includes the same key changes and overall objectives as an earlier draft version published on December 2, 2017. Here is a summary of some of the notable features of the final amendments:

  • New factors for assessing excessive pricing.
    • The PMPRB must consider three new factors when assessing excessive prices: (1) the medicine’s pharmacoeconomic value in Canada, (2) the size of the market for the medicine in Canada, and (3) the GDP and GDP per capita in Canada.
    • These new factors do not apply to medicines that receive a drug identification number (DIN) before the day that the final amendments are published in Canada Gazette, Part II, which is expected to happen on Wednesday, August 21, 2019. All other features of the amendments apply to all patented medicines upon their coming-into-force.
  • New powers to collect information regarding the pharmacoeconomic factors. 
    • The amendments contain specific guidance regarding the triggers and timing for reporting cost-utility analyses and market size information.
    • Cost-utility analyses need only be reported if the pro-rated cost of the medicine’s use over a 12-month period is greater than or equal to 50% of the GDP per capita in Canada.
  • New obligations to report price adjustments.
    • The amendments expand the information that must 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 the medicine or reimburses for the purchase of the medicine”.
    • This new requirement is intended to include confidential third-party rebates paid to insurers under formulary listing agreements.
  • OTC and generic medicines to benefit from risk-based reporting. 
    • The amendments list the categories of medicine that benefit from reduced reporting requirements because they are considered to be a low risk for excessive pricing.
    • The list now includes most 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). However, non-prescription Schedule D drugs (e.g., non-prescription biologics) are excluded and remain subject to normal reporting requirements.
  • Revised international price 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, and Spain. France, Germany, Italy, Sweden, and the United Kingdom remain on the list, which is now being referred to as the “PMPRB11”.
    • The final version omits the Republic of Korea, which had been proposed as a twelfth comparator country in the draft version of the amendments.

Update on the Guidelines

During technical briefings held on August 9, 2019, Health Canada and PMPRB officials stated that details regarding implementation of the amendments will be outlined in a revised set of Guidelines.

PMPRB officials indicated that a proposed set of revised Guidelines will be published for stakeholder consultation this fall. The revised Guidelines should be finalised prior to the amendments coming into force on July 1, 2020.

Officials also indicated that until the amendments come into force in 2020, the PMPRB will continue to apply the existing Guidelines.