Author: Pinky Mazumder
A significant portion of all healthcare-related expenditures in Canada is attributed to prescription drugs. Despite this, prescription drug costs have continued to rise, with Canada having some of the world’s highest prices for prescription drugs. Not only does this pose financial hurdles for patients and their families, but it also limits accessibility to new and innovative drugs and treatments. In an effort to address these concerns, Health Canada has proposed amendments to the Patented Medicines Regulations in an effort to help the Patented Medicine Prices Review Board (PMPRB) better protect Canadians from excessive prices associated with patented drug products.
Significant changes in pharmaceutical therapy over the past two decades have seen an increased prevalence of high cost treatments, for example biologics and gene therapies. While many jurisdictions have responded, including Canada, in implementing measures to reduce drug prices, there has been little change to PMPRB practice. In an effort to modernize PMPRB practice to respond more effectively to modern drug pricing issues, Health Canada has proposed five amendments to the Regulations:
1. New pricing factors: domestic and international price references have traditionally been used by the PMPRB to evaluate the price of drug products. Addition factors are proposed, such as long term value for money thresholds, systemic therapeutic class and price reviews, and reimbursement and clinical criteria restrictions. Also proposed are considerations of the pharmacoeconomic value of the drug, the market size of the product in Canada, and Canada’s GDP.
2. Comparative jurisdictions: the list of countries considered for price comparison will be updated to provide a better standard for consumer protection aligned with median OECD pricing. The criteria used to select additional countries are based on consumer protection, economic standing, and the characteristics of their pharmaceutical market. New countries proposed to be added include Australia, Japan, Belgium, and South Korea.
3. Complaint-based system for generic patented medicines: generic products that are covered by a patent and thus subject to the jurisdiction of the PMPRB are at a lower risk of overpricing. By moving to a complaint-based system for such products, the unnecessary regulatory burden associated with self-reporting is alleviated.
4. Modernize reporting requirements for patentee: in association with the proposed new factors to be considered by the PMPRB, the Regulations will also be amended to require additional reporting information, including: the cost utility analysis by approved indication of the medicine (where available), and the estimated uptake of the medicine by approved indication (where available).
5. Providing Information related to third party rebates: patentees are currently required to report price reductions through rebates and discounts when sold to customers (e.g., wholesalers, pharmacies). However, there is no requirement for price reduction provided to third party payers such as provincial drug plans. This will better allow the PMPRB to assess the actual prices paid in the market.
The consultation period for the proposed-amendments has closed. CAPRA will provide further updates on the proposed amendments as they occur. For more information on the proposed amendments, please refer to the Consultation document from Health Canada in the References section below.
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