Latest Update on the Patented Medicine Prices Review Boards Activities - PowerPoint PPT Presentation

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Latest Update on the Patented Medicine Prices Review Boards Activities


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Title: Latest Update on the Patented Medicine Prices Review Boards Activities

Latest 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

Overview of Presentation
  • PMPRB Mandate and Overview
  • Current Environment
  • Challenges and Recent Decisions
  • Compliance and Enforcement
  • Review of the Regulations and Guidelines
  • 2007 Pharmaceutical Trends

  • PMPRB Mandate and Overview

PMPRB 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

PMPRB 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
  • Key principles
  • Openness
  • Transparency
  • Fairness
  • Timeliness
  • Efficiency

Current 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
  • e.g., Ontarios Transparent Drug System for
    Patients Act
  • Changes to historically frozen prices
    Reimbursement/listing agreements

PMPRB Challenges and Recent Decisions
  • Constitutional challenge
  • Federal role in regulating prices provincial
  • 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
  • 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)

  • Compliance and Enforcement

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Enforcement 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

Hearings since 2006
  • 11 Hearings initiated since January 2006
  • Adderall XR Airomir1 Apotex Concerta
    Copaxone Penlac Quadracel and Pentacel
    Risperdal Consta1 Strattera Thalomid / Celgene
  • Dovobet matter, initiated in 2004
  • March 21, 2007 Federal Court decision on
    judicial review (Board decision of April 19,
  • 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
  • One older ongoing hearing, the Nicoderm matter,
    initiated in 1999
  • 1 Resolved through VCUs

Ongoing Hearings
  • Adderall XR (decision issued - Board Order
  • 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)

  • Possible Options for the Review of the
  • Patented Medicines Regulations
  • and the
  • Boards Excessive Price Guidelines

Impetus 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
  • Third party reports to PMPRB of price increases

Impetus 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

Excessive Price Guidelines
  • Ss. 96(4) of Patent Act permits Board to issue
  • Used by Board Staff to conduct price
  • 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

Extensive 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

January 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
  • Further changes to Guidelines

Working 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
  • Test only for information in cases of dispute

Working Group Reports Highlights(contd)
  • Cost of Making and Marketing (Subsection 85(2))
  • Cost-based price regulation should be a last
  • 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
  • Price Tests
  • New tests aligned to 4 levels of improvement

Next 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.

  • Reporting Mandate

  • 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

Trends 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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Patented Medicine Price Index
  • PMPI decreased by 0.1
  • Consumer Price Index CPI increased by 2.1

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Price Change by Class of Customer and
  • 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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Prices 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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RD 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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National 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
  • 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

NPDUIS (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

Non-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

  • Contact us
  • at
  • or at 1-877-861-2350
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