Title: The Patented Medicine Prices Review Board and Pharmaceutical Price Regulation in Canada
1The 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
2Summary
- Health Care System in Canada
- History of the Pharmaceutical Provisions of the
Patent Act - PMPRB Mandate
- Price Regulatory Regime
- Regulations and Guidelines
- Pharmaceutical Trends
3Health 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) -
4Pharmaceuticals - 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
coverage - 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
5Pharmaceuticals - Provincial-Territorial
Responsibilities
- Provincial-territorial responsibilities
- provision of drug plan benefits to provincial
populations - 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
6Access to Drugs in Canada
7History 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
8Median International Prices to Canadian Prices
9PMPRB
- 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
10PMPRB 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
policy-making - Key principles
- Openness Transparency Fairness Timeliness
Efficiency
11Parameters of the Regulatory Mandate
- PMPRB does not set prices for patented drug
products - PMPRB
- 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
12Key Stakeholders
- Provincial and Territorial Ministers of Health
- Consumers
- Consumers Association of Canada
- Seniors groups
- Pharmaceutical industry
- RxD Canadas Research Based Pharmaceutical
Companies - CGPA Canadian Generic Pharmaceutical
Association - BIOTECanada
13Other Stakeholders
- Private Insurers
- Health associations
- Canadian Pharmacists Association
- Canadian Society of Hospital Pharmacists
- Canadian Health Coalition
- Canadian Healthcare Association
- Disease groups patient advocacy groups
14- Overview of the
- Price Regulatory Regime
15Jurisdiction 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
use - 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).
16Legislated 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
subsection
17 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
18Patented Medicines Regulations
- Identify the specific reporting requirements of
patentees - 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
19Excessive Price Guidelines
- Under the Act, the Board can establish price
guidelines - in consultation with the provinces, consumers and
the industry - 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
20Patented Drug Products (DINs) for Human Use
21 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
22The Price Review
- Application of price tests
- Reasonable Relationship
- Association between strength of the medicine and
price - 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
Regulations - Highest International Price Comparison
- Canadian price cannot be the highest in the world
(i.e., 7 comparator countries)
23Introductory Price Review
Drug Categorization
24Existing Drug Price Review
25Investigations
- 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.
26Possible 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
27Separation of Investigation and Decision-Making
Functions
- Conflict Wall between Board Staff and
Board/Panels - 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
28Hearings
- 11 hearings initiated since January 2006
- Adderall XR Airomir1 Apotex Concerta
Copaxone Penlac Quadracel and Pentacel
Risperdal Consta1 Strattera Thalomid / Celgene
Zemplar1 - One older ongoing hearing (Nicoderm), initiated
in 1999 - 1 Resolved through VCUs
29Voluntary 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
485,498.58 - 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
333,629.25 - 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
30- Current Review of the
- Boards Excessive Price Guidelines
- and
- Regulations
31Impetus 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
Guidelines - Third party reports to PMPRB of significant price
increases - 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
32 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
33Extensive Consultations Ongoing
- Written submissions
- Multi-stakeholder meetings
- Bilateral Board meetings with stakeholders
- Staff-level Working Groups with stakeholders
- Board Communiqués
34Review 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
35Review 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
36 37Scope
- 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)
Reports - Quarterly NEWSletter
- Web site
38PMPI and the CPI 2006
39RD Expenditures by Patentees
40National 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
analyses) - 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
41NPDUIS
- 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
42Non-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
-
43Patented Medicines Average Foreign-to-Canadian
Price Ratios
44Generics Average Foreign-to-Canadian Price Ratios
45- pmprb_at_pmprb-cepmb.gc.ca