On June 19, 2020, the Patented Medicine Prices Review Board (PMPRB) launched its consultation on revised Draft Guidelines to implement the amended Patented Medicines Regulations. The revised Guidelines outline new price tests for existing and new patented medicines, as well as a revised risk-based system for reporting and investigations. They will be available for public comment until July 20, 2020.
Amendments to the Patented Medicines Regulations are scheduled to come into force on January 1, 2021. These amendments are intended to lower the prices of patented medicines in Canada. They include: (1) new factors for assessing excessive pricing, (2) new powers to collect information regarding these factors, (3) new obligations to report indirect price adjustments, (4) risk-based reporting obligations for OTC and generic drugs, and (5) a revised list of international price comparator countries (the PMPRB11).
On November 29, 2019, the PMPRB launched a 60-day consultation on its first set of Draft Guidelines to implement the amended Regulations. That consultation was subsequently extended and, according to the PMPRB, resulted in “extensive feedback” including at least 123 written submissions published to the PMPRB’s website. The PMPRB has now produced revised Draft Guidelines.
As with the original Draft Guidelines, the revised Draft Guidelines state that they are intended to supersede all previous guidance documents, policy communiqués and written or verbal statements of any kind by the PMPRB regarding the administration of the price review process and investigations, including all previous versions of the PMPRB’s Compendium of Guidelines, Policies and Procedures. The revised Draft Guidelines also state that the Patentee’s Guide to Reporting will be replaced by the “Help” section of an online filing tool.
The revised Draft Guidelines at a glance
The revised Draft Guidelines are intended to apply to sales of patented medicines beginning on January 1, 2021. Under the revised Draft Guidelines, the price review process depends on when the medicine first received its DIN:
- Existing patented medicines. The revised Draft Guidelines divide existing patented medicines, e., those sold before January 1, 2021, into three categories: Grandfathered (DIN before August 21, 2019), Line Extension (DIN on or after August 21, 2021 for new dosage form/strength of Grandfathered medicine), and Gap (DIN on or after August 21, 2019 and first sale before January 1, 2021). All existing patented medicines are assigned a Maximum List Price (MLP) tested against ex-factory list prices. The MLP will be determined by considering international price comparisons and the ceiling determined for the medicine under the current Guidelines.
- New patented medicines. Medicines that do not fall into one of the three groups of existing patented medicines will be regulated as new patented medicines and assigned to either Category I or Category II. Medicines with an annual treatment cost >150% of GDP/capita or maximum expected market size >$50 M will be classified as Category I, except biosimilars and generics. Medicines falling below these thresholds, as well as biosimilars and generics, will be classified as Category II.
- All new patented medicines will initially be assigned an interim MLP (iMLP) calculated as the median international ex-factory price (MIP), or at the top of the domestic Therapeutic Class Comparison (dTCC) in the absence of international price data. This will transition to the MLP after the interim period, calculated based on MIP or top of dTCC. This will be the only price ceiling for Category II medicines, subject to reassessment.
- In addition, Category I medicines will be assigned a Maximum Rebated Price (MRP) ceiling tested against average transaction prices. The methodology for calculating MRP differs for “high cost” vs “high market size” medicines. Within each category, the precise price test depends on sales and may consider a Therapeutic Criteria Level (TCL) based on scientific information including therapeutic effect, clinical impact, and quality-adjusted life year (QALY) gains.
The consultation: next steps
In addition to accepting written feedback on the revised Draft Guidelines until July 20, 2020, the PMPRB has also scheduled a number of webinars:
- Public consultations with industry stakeholders (June 29) and the general public (July 8).
- Invitation-only sessions with health partners (June 25) and private insurers (July 7).
The PMPRB has also indicated that during the week of June 22, it will publish a Backgrounder to provide more context to the revised Draft Guidelines and summarize the feedback it received on the November 2019 version.