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PMPRB Regulations Saga Coming to an End? New Draft Guidelines Issued

November 10, 2022

By Nyrie Israelian, Parnian Soltanipanah, Melanie Szweras, Noel Courage 

After almost two years of delays, the highly contentious amended Patented Medicines Regulations (the Regulations) came into force on July 1, 2022. As we previously reported, the Regulations now include a new basket of comparator countries, referred to as the PMPRB11, omitting the United States and Switzerland, and reduced reporting requirements for medicines at lower risk of excessive pricing. After key sections of the proposed Regulations were found unconstitutional by Federal and Quebec Courts, the Canadian government confirmed that it will not proceed with the new price regulatory factors and the requirement to file information net of all price adjustments.

In a bid to provide clarity, the PMPRB has provided Interim Guidance, outlining the price review process in the Interim Period between the coming into force of the new Regulations, and the publication of its new PMPRB Guidelines, intended to operationalize the amended Regulations.

On October 6, 2022, the PMPRB issued its Draft Guidelines 2022, reflecting the set of Regulations which came into force. The PMPRB has invited stakeholders and interested members of the public to provide feedback during a 60-day consultation period ending December 5, 2022.

Interim Guidance

After a consultation period on its proposed approach for reviewing the prices of patented medicines during this period, the PMPRB proceeded with the following interim guidance.

During the interim period, the price of an existing patented medicine will not trigger an investigation if:

  1. The national average transaction price (N-ATP) remains at or below the 2022 projected non-excessive average price (NEAP). If the N-ATP is above the NEAP, the PMPRB will only open an investigation if this results in excess revenues greater than $50,000; and
  2. The medication’s list price does not increase. An increase in the list price of a medicine will not trigger an investigation if it was taken in accordance with the Consumer Price Index (CPI)-based price-adjustment factors during the first filing period of 2022.

New patented medicines (that is, patented medicines without a maximum average potential price (MAPP) or projected NEAP as of July 1, 2022), will not be subject to price review during the Interim Period. Once the new Guidelines are in place, potentially excess revenues will not be calculated retrospectively for sales made during the Interim Period.

Draft Guidelines 2022

Aside from referencing the new Schedule of 11 comparator countries (the “PMPRB11”, comprising of Australia, Belgium, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden and the United Kingdom), the new Draft Guidelines 2022 differ in four key aspects compared to previous iterations.

Patented medicines will no longer be separated into different therapeutic categories. Rather, depending on whether a medicine is an “existing” medicine or a “new” medicine, the Draft Guidelines have proposed criteria that, if engaged, may trigger an investigation. The PMPRB stated that these investigative criteria are meant to significantly reduce the number of overall investigations and enable staff to focus resources on cases where the potential risk of excessive pricing is highest.  

Moreover, investigation criteria will apply only to list prices (the publicly available ex-factory price), which is meant to make the potential triggering of an investigation more stable and predictable for rights holders.

The Draft Guidelines also propose to apply less probing investigation criteria to existing medicines and their line extensions, where “existing” medicines are defined as medicines that received a Notice of Compliance prior to July 1, 2022. On a go-forward basis, however, more probing investigation criteria will be applied to new medicines.

Finally, the Draft Guidelines waive filing requirements for medicines believed to be at lower risk of excessive pricing. For biosimilars, certain non-prescription controlled substances, generics, medicines for veterinary use, over-the-counter medicines, and vaccines, an investigation may be opened only when a complaint is received. Additionally, for an investigation to be opened for a generic, the rights holder of the medicine must be the only company in Canada which is selling a generic version of the medicine in Canada, and the medicine must not be the subject of a pricing agreement with the pan-Canadian Pharmaceutical Alliance (pCPA) to which it is compliant.

The PMPRB is committed to completing the consultation process and issuing new Guidelines before January 1, 2023.

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Author(s):

Melanie Szweras Melanie Szweras
B.Sc., Ph.D. (Genetics), LL.B.
Partner
416.957.1678  email Melanie Szweras
Noel Courage Noel Courage
B.Sc. (Biochem.), LL.B.
Partner
416.957.1655  email Noel Courage
Nyrie Israelian Nyrie Israelian
BA&Sc. (Biomedical Science), Ph.D (Immunology), J.D.
Associate
289.326.4524  email Nyrie Israelian
Parnian Soltanipanah Parnian Soltanipanah
B.Sc. (Chem), J.D.
Associate
416.957.6578  email Parnian Soltanipanah