Title: Latest Update on the Patented Medicine Prices Review Boards Activities
1Latest Update on the Patented Medicine Prices
Review Boards Activities
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- Barbara Ouellet
- Executive Director
- Drug Pricing Reimbursement in Canada
- Toronto, Ontario
- May 24, 2008
2Overview of Presentation
- PMPRB Mandate and Overview
- Current Environment
- Challenges and Recent Decisions
- Compliance and Enforcement
- Review of the Regulations and Guidelines
- 2007 Pharmaceutical Trends
3- PMPRB Mandate and Overview
4PMPRB Overview
- Created in 1987 as consumer protection pillar
of drug patent law reform - Arms-length agency in health portfolio
- No involvement in federal policy-making
- Quasi-judicial tribunal
- Unique structure both investigative and
adjudicative functions - Remedial orders provided for in the Patent Act
enforceable in the - Federal Court
- Structure and budget
- 5 part-time Board Members
- 62 employees
- Budget 11.5 million
5PMPRB Overview (contd)
- Two-fold mandate
- Regulatory - To ensure that prices charged by
patentees (ex-factory prices) for patented
medicines sold in Canada are not excessive,
thereby protecting consumer interests and
contributing to Canadian health care - Reporting - To report on pharmaceutical trends
and on RD spending by pharmaceutical patentees,
thereby contributing to informed decisions and
policy-making - Key principles
- Openness
- Transparency
- Fairness
- Timeliness
- Efficiency
6Current Environment
- Health Canadas Blueprint for Legislative Renewal
- Progressive licensing
- Openness and transparency
- Competition Bureau
- Canadian Generic Drug Sector Study
- Provincial public drug plan legislation and
policies - e.g., Ontarios Transparent Drug System for
Patients Act - Changes to historically frozen prices
Reimbursement/listing agreements
7PMPRB Challenges and Recent Decisions
- Constitutional challenge
- Federal role in regulating prices provincial
jurisdiction - Reporting
- Failure-to-File
- Not on time or incomplete
- Refusal to file based on April 2000 Board policy
(compassionate use programs, expenditure
limitation agreements, trial prescription
programs) - Sales under Health Canadas Special Access
Programme (SAP) under PMPRB jurisdiction - January 21, 2008 Board Decision in the matter of
Celgene Corporation and the medicine Thalomid
(currently subject to Judicial Review)
8- Compliance and Enforcement
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10Enforcement Activities
- 9 Voluntary Compliance Undertakings in 2007-2008
- Airomir (concluding the proceedings initiated in
2006) Denavir Dovobet (following the September
2007 Board Order) Forteo Lantus OctreoScan
Risperdal Consta (completing the proceedings
initiated in 2006) Vaniqa Zemplar (concluding
the proceedings initiated in 2006) - Combination of price reductions and reimbursement
of excessive revenues totalling over 7M - Since 1993, 49 VCUs have been approved
- Price reduction price reduction of other
patented medicines payments of excess revenues
totalling 34M
11Hearings since 2006
- 11 Hearings initiated since January 2006
- Adderall XR Airomir1 Apotex Concerta
Copaxone Penlac Quadracel and Pentacel
Risperdal Consta1 Strattera Thalomid / Celgene
Zemplar1 - Dovobet matter, initiated in 2004
- March 21, 2007 Federal Court decision on
judicial review (Board decision of April 19,
2006) - September 17, 2007 Board Order LEO Pharma
offset excess revenues of 3,736,398.71 (for
period 2002 to 2005) 870,425.68 (VCU for 2006
period) - One older ongoing hearing, the Nicoderm matter,
initiated in 1999 - 1 Resolved through VCUs
12Ongoing Hearings
- Adderall XR (decision issued - Board Order
pending) - Apotex (October 6)
- Concerta (decision pending)
- Penlac (resumes July 14)
- Quadracel-Pentacel (resumes November 25)
- Strattera (to be scheduled)
- And
- One older ongoing hearing, the Nicoderm matter,
initiated in 1999 (resumes on July 3)
13- Possible Options for the Review of the
- Patented Medicines Regulations
- and the
- Boards Excessive Price Guidelines
14Impetus for Review
- Changing environment
- International and Canadian developments
- Developments within the pharmaceutical industry
globalization, mergers, partnerships - Changes in nature of new patented medicines
fewer breakthroughs, more incremental innovation - High (over 90) but declining voluntary
compliance with current Excessive Price
Guidelines - Third party reports to PMPRB of price increases
15Impetus for Review (contd)
- Need to ensure that its Excessive Price
Guidelines remain relevant and appropriate - Concerns in 2006 especially regarding
- Categorization of new medicines not consistent
with Health Canada priority review and dont
adequately reflect incremental innovation - Introductory prices seen as cost-driver
- Additional issue
- March 2007 Federal Court of Canada decision
overturned Boards April 2000 policy permitting
discretion in inclusion of certain customer
benefits in average net price
16Excessive Price Guidelines
- Ss. 96(4) of Patent Act permits Board to issue
guidelines - Used by Board Staff to conduct price
reviews/investigations - Provide transparency and predictability to
patentees and other stakeholders - Not binding on Board or patentee in a Hearing
- But, Federal Court ruled Board can use Guidelines
in a hearing for rationale, approach or
methodology in considering price factors (ICN
Pharmaceuticals Inc. LEO Pharma Inc.) - Ss. 96(5) requires Board to consult with the
F/P/T Health Ministers, consumers and the
pharmaceutical industry - Last major changes made in 1994
17Extensive Consultations To Date
- Discussion Guide, May 2006
- Multi-stakeholder meetings, November 2006
- Board Stakeholder Communiqué setting out an
action plan, May 2007 - Bilateral meetings with industry (brand name,
biotech, generics), provinces and consumers,
September 2007 - Industry/Board Staff Working Groups
- 6 meetings to date with RxD representatives
- 3 meetings with BIOTECanada representatives
- 2 meetings with CGPA representatives
- Working Groups industry, governments, consumers
- Therapeutic Improvement
- International Therapeutic Class Comparison
- Making and Marketing
- Price Tests
18January 2008 Discussion Paper
- Next steps on overall Guidelines review
- Scenarios for conducting Any Market reviews
- Scenarios for possible Re-setting of the
Maximum Non-Excessive (MNE) Price - Progress updates on other issues in May 2007
Stakeholder Communiqué - Potential options to mitigate FCC decision
- Possible changes to Patented Medicines
Regulations - Further changes to Guidelines
19Working Group Reports Highlights
- Therapeutic Improvement
- 4 levels of improvement
- Expanded set of secondary criteria
- International Therapeutic Class Comparison
- Comparators and dosage regimens same as domestic
TCC - Test only for information in cases of dispute
20Working Group Reports Highlights(contd)
- Cost of Making and Marketing (Subsection 85(2))
- Cost-based price regulation should be a last
resort - In the case of price increases, it can be
confined to demonstrable medically-related
product improvements and demonstrable,
significant, unanticipated and non-transitory
cost increases beyond the control of the firm
involved - Price Tests
- New tests aligned to 4 levels of improvement
21Next Steps
- Entering final deliberations
- Holding one further bilateral consultation with
Board of Directors of RxD and of BIOTECanada on
June 26 - Upcoming release of Stakeholder Communiqué
outlining the process to complete the review.
22 23Scope
- Annual Report
- Pursuant to Sections 89 and 100 of the Patent Act
- 2007 Report just released on June 18, 2008
- Includes overview of
- PMPRB activities
- Price trends patented and all medicines
- RD expenditures by patentees
- National Prescription Drug Utilization
Information System (NPDUIS), including
Non-Patented Prescription Drug Prices - Quarterly NEWSletter
- Web site
24Trends in Sales
- Sales of patented drugs increased by only 3.0 to
12.3B from 12.0B in 2006 - However, patented drugs now account for 66.0 of
total sales, down from 68.1 in 2006
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26Patented Medicine Price Index
- PMPI decreased by 0.1
- Consumer Price Index CPI increased by 2.1
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29Price Change by Class of Customer and
Jurisdiction
- PMPI varied by class of customer, i.e.,
hospitals, pharmacies, wholesalers, others and
by province/territory - Overall PMPI decrease due to price declines for
hospitals, which more than offset price increases
to pharmacies and wholesalers - Five jurisdictions (Yukon, NB, NS, ON and MB) saw
small price drops, while others, including QC,
experienced small price increases
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32Prices in Comparator Countries
- Five of the seven comparator countries saw price
increases in 2007 only Switzerland and France,
like Canada, experienced a small decline - For much of the last decade, Canadian prices, on
average, have been in the middle of the pack
relative to comparator countries. However in
2007, average Canadian prices appeared to be
slightly higher than all countries except the US.
This is the first time Canada has been second
highest to the US since PMPRB began reporting
bilateral foreign-to-Canadian price comparators
in 1997. The appreciating Canadian dollar is
likely the main cause - As well, as a result, foreign Median
International Prices dipped slightly below those
in Canada for the first time since 1993
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40RD Expenditure in 2007
- Patentees reported total RD expenditures of
1.32 B in 2007, an increase of 9.5 from 2006 - The RD-to-sales ratio increased
- All patentees 8.3 - up from 8.1 in 2006
- RxD members 8.9 from 8.5
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43National Prescription Drug Utilization
Information System (NPDUIS)
- Pursuant to section 90 of the Patent Act
- In partnership with the Canadian Institute for
Health Information (data custodian and some
analyses) - Responsive to priorities of F/P/T drug plans
(Steering Committee) - Publications
- Guidelines for conducting pharmaceutical budget
impact analyses - New Drug Pipeline Monitor
- Pharmaceutical Trends Overview
44NPDUIS (contd)
- Research priorities for 2008-2009
- Financial implications for public drug plans of
long-term demographic shifts - High-cost claimants
- Methodologies to identify prescribing patterns
and track up-take of new drugs - Indices to measure trends in drug therapy costs
for major health problems - Drug utilization relative to expenditure
limitation arrangements - Pharmacy dispensing fees
- Rapid-response for ad hoc requests
45Non-Patented Prescription Drug Prices
- Pursuant to section 90, in support of the
National Pharmaceuticals Strategy - Upcoming Publications
- Price Trends and International Price Comparisons
- Market Structure - Trends and Impacts
- As of April 1, 2008, NPPDP studies are conducted
under the umbrella of the NPDUIS
46- Contact us
- at pmprb_at_pmprb-cepmb.gc.ca
- or at 1-877-861-2350