The Patented Medicine Prices Review Board (PMPRB) has issued a decision that Procysbi (cysteamine bitartrate) is being sold at an “excessive” price. The PMPRB ordered the manufacturer, Horizon Pharma PLC (Horizon), to reduce its price and pay excess revenues to the Crown.
In its decision, the Board applied the Guidelines to determine the price ceiling for Procysbi. Following amendments to the Patented Medicines Regulations in July 2022, these Guidelines are no longer in force. As we reported, the PMPRB is now applying an interim guidance based on the previous Guidelines, pending consultation on a new set of Guidelines. The Board has indicated that a draft of the new Guidelines will be released for consultation in the fall.
Procysbi is a delayed-release, enterically coated formulation of cysteamine bitartrate. It is marketed for the treatment of nephropathic cystinosis, which affects roughly 100 patients in Canada. Procysbi was approved in 2017. At introduction, it was priced by Horizon in accordance with the Median International Price Comparison test (MIPC) under the Board Guidelines.
In 2018, the pan-Canadian Pricing Alliance (pCPA) filed a complaint about the price of Procysbi with the PMPRB. This is an automatic trigger for an investigation under the Board’s Guidelines. During the investigation, Board Staff rejected a proposed Voluntary Compliance Undertaking (VCU) from Horizon.
Before the Board, one of the issues was the level of therapeutic improvement offered by Procysbi. Prior to the Board proceeding, Procysbi was categorized by the Human Drug Advisory Panel (HDAP) as a “moderate improvement” over Cystagon, an immediate-release formulation of cysteamine. Cystagon has never been approved in Canada, but had been available since 1994 through the Special Access Programme (SAP). After Procysbi was approved in 2017, Cystagon continued to be available for patients who are medically unable to use Procysbi.
Excessive price under the Guidelines
Both Board Staff and Horizon argued that the PMPRB should depart from its Guidelines when determining whether the price of Procysbi was “excessive”. The Board rejected this argument, finding that it was “not reasonable or necessary” to do so in order to implement section 85 of the Patent Act.
Application of the price tests in the Guidelines depended in part on the status of Cystagon, which is the only other treatment for nephropathic cystinosis. The PMPRB accepted Horizon’s argument that Cystagon and Procysbi were not the same medicine for price review purposes, but accepted Board Staff’s argument that Cystagon was “sold” under the SAP and was therefore a relevant price comparator.
Board Staff argued that the PMPRB should create a new “modest improvement” category for Procysbi, between the existing “slight or no improvement” and “moderate improvement” categories in the Guidelines. Staff proposed three alternative price tests that could be used for medicines in this category. The Board rejected the proposed new category. It also rejected the proposed price tests, which it found were “reverse engineered” by Board Staff to require a greater price reduction than under the Guidelines.
Meanwhile, Horizon argued that Procysbi should have been categorized as a “substantial improvement” or “breakthrough”, and that the MIPC therefore ought to apply. The Board rejected this argument, holding that while it was not bound by the HDAP’s determination that Procysbi was a moderate improvement, it agreed with the conclusion. The Board also rejected Horizon’s argument that it was required to consider costs of making and marketing Procysbi pursuant to subsections 85(2) and (3). The Board concluded that since it was able to make a determination under subsection 85(1), it was precluded from considering costs of making and marketing.
The Board ordered Horizon to reduce its price to be no higher than the ceiling calculated for a “moderate improvement” and to pay an undisclosed amount of excess revenues to the Crown in respect of its sales at an “excessive” price.