Canada: Canada's PMPRB Guidelines Proposed For Stakeholder Consultation

The Patented Medicine Prices Review Board (PMPRB) has published draft guidelines describing its regulatory framework and the tests that it will use to assess whether the price of a patented medicine is "excessive" in Canada. Stakeholders can submit comments on the draft guidelines by December 5, 2022. Comments will be made public.

Please see Torys' past bulletins on the PMPRB for more information on the history of the amendments to the Patented Medicines Regulations (PMR) and ongoing litigation involving PMPRB¹.

What you need to know

• On July 1, 2022, amendments to the PMR came into force, modifying the basket of comparator countries for reference-based price tests, referred to as the PMPRB11². Notably, PMPRB11 does not include the United States and Switzerland, which were comparators under the former PMR.
• The PMPRB has published draft guidelines intended to implement the PMR, and is seeking feedback from stakeholders on its new approach to price regulation.
  • While the guidelines are non-binding in nature, the guidelines will inform the Board's reasoning in an excessive price hearing and PMPRB staff will rely heavily on the guidelines when investigating whether the price of a patented medicine is excessive.
• The draft guidelines have undergone a significant change compared to former versions of the guidelines. Rather than separating patented medicines into different therapeutic categories with variable annual price tests, the PMPRB has proposed "bright-line" tests to regulate list prices as opposed to the former, more complex assessments of annual average price increases.
• The PMPRB indicates that the draft guidelines are intended to streamline the review of patented medicine prices and reduce administrative burdens.

Analysis

The draft guidelines distinguish between "existing" and "new" medicines. "Existing medicines" are those: a) for which a Notice of Compliance (NOC, or marketing authorization) was issued prior to July 1, 2022, and any dosage forms/strengths of such medicines that are issued an NOC after July 1, 2022; and b) medicines approved under the Special Access Programme prior to July 1, 2022. "New medicines" are all medicines that are not existing medicines.

The draft guidelines outline the criteria that will trigger an investigation by PMPRB staff into the price of the patented medicine:

• For all medicines³: an investigation may be triggered if: a) a complaint is received; b) the list price is increased by more than the changes in the Consumer Price Index (CPI); or c) no international prices are filed by the rights holder.
• For existing medicines, less probing investigation criteria apply as compared to new medicines. For existing medicines, an investigation could also be triggered if the list price of any dosage form or strength of the medicine exceeds the highest international price among the PMPRB11.
• For new medicine, more probing criteria apply, in that an investigation could also be triggered if: a) the list price exceeds the median international price of the PMPRB11; b) the list price is between the median and lowest international price of the PMPRB11 but is greater than the top of the domestic therapeutic class comparator prices (dTCC); or c) the list price is greater than the midpoint between the top of the dTCC and lowest international price of the PMPRB11, and the top of the dTCC is more than 50% lower than the lowest international price.
• The dTCC is a price test that compares a patented medicine's list price with the list prices of other comparable medicines in the domestic marketplace. The PMPRB Human Drug Advisory Panel (HDAP) advises PMPRB staff on appropriate comparators through review of clinical and scientific information. For new medicines, the appropriate comparators within the dTCC will be highly relevant in assessing pricing.

Once an investigation is opened, Board Staff will apply the same level of regulatory scrutiny to all medicines, regardless of NOC date, in determining whether to recommend a hearing to the Board Chair.

Next steps

Stakeholders are invited to provide comments on the draft guideline until December 5, 2022. All comments received will be published on the PMPRB website. The PMPRB indicated that it is aiming to publish final guidelines before the end of the year, suggesting that the framework under the draft guidelines is unlikely to materially change regardless of the feedback that is received.

Footnotes

1. Torys has written extensively on PMPRB developments; see below for a selection:

• "PMPRB regulations: New basket of comparator countries has arrived, absent guidance"
• "Canada's PMPRB: Reference-based pricing here to stay"
• "A sense of déjà vu: The Québec Court of Appeal rules on constitutionality of PMPRB"
• "'This Court does not sign blank cheques': Federal Court of Appeal reverses Canada's Patented Medicine Prices Review Board, restricting Board's price control mandate"
• "Déjà vu: Another delay in implementation of Canada's PMPRB Regulations"
• "The wait is over: Canada's PMPRB releases final Guidelines"
• "PMPRB decision stands: Soliris priced excessively"
• "Alexion Pharmaceuticals v Canada FCA Dismisses Appeal Aimed at Constitutionality of PMPRB Provisions"

2. PMPRB11 countries are Australia, Belgium France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden and the United Kingdom.

3. If a complaint is received for biosimilars, medicines for veterinary use, over-the-counter (OTC) medicines and vaccines, an investigation may also be triggered when a complaint is received. For generic medicines, an investigation may be triggered when a complaint is received, the rights holder is the only company in Canada selling the generic medicine and the medicine is not the subject of a pricing agreement with the pan-Canadian Pharmaceutical Alliance (pCPA).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.