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The Patented Medicine Prices Review Board and Pharmaceutical Price Regulation in Canada


... Medicine Prices Review Board and Pharmaceutical Price Regulation in Canada ... Pharmaceutical industry. Rx&D Canada's Research Based Pharmaceutical Companies ... – PowerPoint PPT presentation

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Title: The Patented Medicine Prices Review Board and Pharmaceutical Price Regulation in Canada

The Patented Medicine Prices Review Board and
Pharmaceutical Price Regulation in Canada
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  • Brien G. Benoit, MD, MSc, FRCSC, FACS
  • Chairperson
  • Pharmaceutical Pricing and Market Access Summit
  • London, UK
  • April 24, 2008

  • Health Care System in Canada
  • History of the Pharmaceutical Provisions of the
    Patent Act
  • PMPRB Mandate
  • Price Regulatory Regime
  • Regulations and Guidelines
  • Pharmaceutical Trends

Health Care System in Canada
  • To protect, promote and restore the physical and
    mental well-being of residents of Canada and to
    facilitate reasonable access to health services
    without financial or other barriers
  • Shared roles and responsibilities between the
    federal and provincial-territorial governments
  • For Health
  • Canada Health Act
  • Canada Health Transfer
  • For Pharmaceuticals
  • Federal Health Canada Patented Medicine Prices
    Review Board
  • Provinces-Territories Drug Plans
  • Federal-Provincial-Territorial Common Drug
    Review (CDR)

Pharmaceuticals - Federal Responsibilities
  • Health Canadas responsibilities include
  • market authorization (product reviews/approvals)
  • surveillance of safety and effectiveness after
    products reach the market
  • implementation of the Patented Medicines (Notice
    of Compliance) Regulations
  • provision of drug plan benefits to special
    populations (e.g., First Nations and Inuit)
  • leadership for health care renewal, including
    initiatives to improve prescribing and
    utilization, control costs and expand drug plan
  • Patented Medicine Prices Review Board
  • Independent quasi-judicial administrative agency,
    responsible for regulating the prices patentees
    charge for their patented medicines to ensure
    that they are not excessive

Pharmaceuticals - Provincial-Territorial
  • Provincial-territorial responsibilities
  • provision of drug plan benefits to provincial
  • drug plan management
  • Federal/Provincial/Territorial partnership
    Common Drug Review
  • evidence-based clinical and pharmacoeconomic
    reviews of new drugs and new indications for old
    drugs, for potential coverage by participating
    F/P/T drug benefit plans
  • F/P/T drug plans have final authority over
    listing decisions

Access to Drugs in Canada
History of the Pharmaceutical Provisions of the
Patent Act
  • 1960s Restrictive Trade Practice Commission
    and others
  • 1969 Introduction of compulsory licensing
  • 1985 Eastman Commission
  • 1987-1993 Bills C-22 and C-91, amending the
    Patent Act
  • Increased patent protection eliminated
    compulsory licensing
  • Introduced direct price controls
  • in 1987 Canadian prices were 20 higher than the
    median prices of other industrialized countries
    and 2nd highest only to the U.S.
  • RD commitments 10 of sales

Median International Prices to Canadian Prices
  • Created in 1987 as consumer protection pillar
    of drug patent law reform
  • Arms-length agency now in health portfolio
  • No involvement in federal policy-making
  • Quasi-judicial tribunal
  • Remedial orders provided for in the Patent Act
    enforceable in the Federal Court
  • Unique structure both investigative and
    adjudicative functions
  • 5 part-time Board members
  • 62 employees 2007-08
  • Budget 11.6 million

PMPRB Mandate
  • Two-fold
  • 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

Parameters of the Regulatory Mandate
  • PMPRB does not set prices for patented drug
  • Reviews/limits the introductory price of new
    patented drugs set by patentees to ensure that
    they are not excessive
  • Limits the price increases of existing drugs
  • Patentee does not require prior price approval
    before selling in Canada

Key Stakeholders
  • Provincial and Territorial Ministers of Health
  • Consumers
  • Consumers Association of Canada
  • Seniors groups
  • Pharmaceutical industry
  • RxD Canadas Research Based Pharmaceutical
  • CGPA Canadian Generic Pharmaceutical
  • BIOTECanada

Other Stakeholders
  • Private Insurers
  • Health associations
  • Canadian Pharmacists Association
  • Canadian Society of Hospital Pharmacists
  • Canadian Health Coalition
  • Canadian Healthcare Association
  • Disease groups patient advocacy groups

  • Overview of the
  • Price Regulatory Regime

Jurisdiction of the PMPRB
  • Over price charged by the patentee (factory-gate
    price) for
  • prescription and non-prescription patented drugs
    sold in Canada to wholesalers, hospitals,
    pharmacies or others, for human and veterinary
  • the price of each patented drug product,
    including each strength of each dosage form, sold
    in Canada, at the level of the Drug
    Identification Number (DIN).

Legislated Pricing Factors
  • The Patent Act - ss. 85(1) - dictates the factors
    the PMPRB takes into consideration when reviewing
    prices of patented medicines
  • (a) the prices at which the medicine has been
    sold in the relevant market
  • (b) the prices at which other medicines in the
    same therapeutic class have been sold in the
    relevant markets
  • (c) the prices at which the medicine and other
    medicines in the same therapeutic class have been
    sold in countries other than Canada
  • (d) changes in the Consumer Price Index and
  • (e) such other factors as may be specified in any
    regulations made for the purposes of this

Legislated Pricing Factors
  • If the Board is unable to make a determination
    using paragraph 85(1) factors, the Board may take
    into account
  • (a) the costs of making and marketing the
    medicine and
  • (b) such other factors as may be specified in any
    regulations made for the purposes of this
    subsection or as are, in the opinion of the
    Board, relevant in the circumstances

Patented Medicines Regulations
  • Identify the specific reporting requirements of
  • Set out the seven comparator countries used in
    the price review France, Germany, Italy, Sweden,
    Switzerland, United Kingdom and United States
  • Price and sales in Canada to be filed for each
    class of customer (hospital, pharmacy,
    wholesaler, other) in each province and territory

Excessive Price Guidelines
  • Under the Act, the Board can establish price
  • in consultation with the provinces, consumers and
    the industry
  • 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

Patented Drug Products (DINs) for Human Use
The Scientific Review
  • Purpose To determine
  • the primary indication/use of the new medicine,
    and dosage regime
  • the category (i.e., breakthrough/substantial
    improvement provides modest, little or no
    improvement over other medicines for same
    indication line extension)
  • therapeutically comparable medicines, and their
    respective comparable dosage regimes

The Price Review
  • Application of price tests
  • Reasonable Relationship
  • Association between strength of the medicine and
  • Therapeutic Class Comparison
  • Price of the drug compared to that of clinically
    equivalent drugs sold in same market at
    non-excessive price
  • International Price Comparison
  • Price of the drug compared to that of the same
    dosage form and strength of the drug sold in
    countries listed in the Patented Medicines
  • Highest International Price Comparison
  • Canadian price cannot be the highest in the world
    (i.e., 7 comparator countries)

Introductory Price Review
Drug Categorization
Existing Drug Price Review
  • Where a price appears to exceed the Guidelines,
    the patentee may make further written submissions
    to substantiate price
  • Meetings of patentee and Board Staff take place
    to discuss materials submitted
  • May result in revisiting of science, i.e.,
    appropriate comparators, etc.

Possible Outcomes of Investigations
  • Price not excessive and investigation closed
  • Price excessive under the Guidelines
  • Patentee given opportunity to provide a Voluntary
    Compliance Undertaking (VCU) (i.e., comply with
    the MNE price and agree to repay excess revenues)
  • Requires approval of Board Chairperson
  • OR
  • Board Staff refers the matter to the Chairperson
  • Decides whether it is in the public interest to
    issue a Notice of Hearing

Separation of Investigation and Decision-Making
  • Conflict Wall between Board Staff and
  • Essential to ensure Board remains unbiased
  • Board never aware of investigation details
  • Board Staff and Patentees both parties before
    Hearing Panel
  • All communications by one party to the Board are
    served on the other party

  • 11 hearings initiated since January 2006
  • Adderall XR Airomir1 Apotex Concerta
    Copaxone Penlac Quadracel and Pentacel
    Risperdal Consta1 Strattera Thalomid / Celgene
  • One older ongoing hearing (Nicoderm), initiated
    in 1999
  • 1 Resolved through VCUs

Voluntary Compliance Undertakings (VCUs)
  • 46 VCUs approved to-date price reductions and
    offset of excess revenues
  • Over 33M in total since 1993
  • In 2007 and 2008
  • Three were submitted in the context of a hearing
  • Airomir payment of excess revenues of
  • Risperdal Consta price reduction and payment of
    excess revenues of 4,386,172.99
  • Zemplar price reduction and payment of excess
    revenues of 58,741.67
  • Forteo offset of excessive revenues of
  • OctreoScan price reduction and payment of excess
    revenues of 387,181.87
  • Dovobet 870,425.68 (for 2006 period)
  • Vaniqa payment of excess revenues of 70,860.59
  • Lantus price reduction and payment of excess
    revenues of 694,239.50

  • Current Review of the
  • Boards Excessive Price Guidelines
  • and
  • Regulations

Impetus for Review
  • Changing environment
  • 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 significant price
  • Shifting regimes in Canada and internationally
  • Health Canada progressive licensing
  • Certain Provinces-Territories changes in
    legislation, reimbursement and listing agreements
  • Internationally U.S. Medicare, Part D UK move
    away from PPRS

Objectives of Review
  • To ensure that Excessive Price Guidelines remain
    relevant and appropriate
  • Concerns since 2006 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 calculation of average net price

Extensive Consultations Ongoing
  • Written submissions
  • Multi-stakeholder meetings
  • Bilateral Board meetings with stakeholders
  • Staff-level Working Groups with stakeholders
  • Board Communiqu├ęs

Review Considerations
  • In reviewing / amending the Guidelines, the Board
    must consider
  • Consistency with the statutes
  • Public / consumer interest focus
  • Impact on patentees
  • Transparency and predictability
  • Overall timeliness

Review Requirements
  • Reaching decisions on
  • Scenarios and options
  • Drafting new Guidelines
  • Determination on whether to amend the Patented
    Medicines Regulations
  • Considering transition issues
  • Target completion date December 2008

  • Reporting Mandate

  • Annual Report
  • Pursuant to sections 89 and 100 of the Patent Act
  • Provided to Minister of Health on May 31 for
    tabling in House
  • Includes overview of
  • PMPRB activities
  • Price trends patented and all medicines
  • RD expenditures by patentees
  • National Prescription Drug Utilization
    Information System (NPDUIS) Reports
  • Non-Patented Prescription Drug Prices (NPPDP)
  • Quarterly NEWSletter
  • Web site

PMPI and the CPI 2006
RD Expenditures by Patentees
National Prescription Drug Utilization
Information System (NPDUIS)
  • Pursuant to section 90 of the Patent Act
  • In partnership with the Canadian Institute on
    Health Information (data custodian and some
  • Responsive to priorities F/P/T drug plans
    (Steering Committee)
  • Publications to-date focus on
  • Guidelines for conducting pharmaceutical budget
    impact analyses
  • New Drug Pipeline
  • Pharmaceutical Trends Overview

  • Potential 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 (NPPDP)
  • Pursuant to section 90, in support of the
    National Pharmaceuticals Strategy
  • Publications to-date
  • Non-patented Single-source Drugs in Canada,
    December 2007
  • Market for New Off-Patent Drugs, June 2007
  • Trends in Canadian Sales and Market Structure,
    October 2006
  • Canadian and Foreign Price Trends, June 2006

Patented Medicines Average Foreign-to-Canadian
Price Ratios
Generics Average Foreign-to-Canadian Price Ratios
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