Patented Medicines Prices Review Board (PMPRB) releases new draft guidelines

On October 6, 2022, the PMPRB released new draft guidelines to give effect to the July 2022 amendments to the Patented Medicines Regulations (the "Regulations") set forth by Health Canada. Stakeholders will have a 60-day period (up until December 5, 2022) to submit written feedback. All submissions will be made available to the public.

The PMPRB describes the new draft guidelines as being simpler, more stable and more predictable for rights holders, namely by:

1. Introducing the concept of "investigation criteria", where the PMPRB will not presume excessive pricing ab initio, but only if after investigation the factors for excessive pricing have been met.
   
   Investigations may be initiated for any medicine (existing or new medicine):
   1. On receipt of a complaint;
   2. If the list price increased more than the Consumer Price Index (CPI); or
   3. No international prices were filed.

   For existing medicines, the PMPRB may also open an investigation if the list price exceeds the highest international prices of the comparator countries (see "PMPRB11", discussed below).

   For new medicines, the PMPRB may also open an investigation if the list price exceeds the median international price of the comparator countries (the "PMPRB11"); falls between the median and lowest list price of the PMPRB11 but exceeds the domestic therapeutic class comparator price (dTCC); or the list price exceeds the midpoint between the top of the dTCC and lowest international price for the PMPRB11, and the top of the dTCC is more than 50% lower than the lowest international price.

   The PMPRB states in its backgrounder that a concerted effort will be made to only trigger an investigation for new medicines when "at least two of the [s. 85] factors are engaged whenever possible". The factors under s. 85 of the Patent Act are:

   1. The prices at which the medicine has been sold in the relevant market;
   2. The prices at which other medicines in the same therapeutic class have been sold in the relevant market;
   3. The prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada;
   4. Changes in the Consumer Price Index; and
   5. Such other factors as may be specified in any regulations made for the purposes of this subsection.
2. Applying the investigation criteria to list prices only, which will not fluctuate annually based on average transaction prices (ATP) the year before and a formula derived from CPI.
3. Distinguishing between "existing medicines" (medicines which had market authorization in the form of a Notice of Compliance ("NOC") prior to July 1, 2022, and their line extensions) and "new medicines" (medicines which received an NOC on or after July 1, 2022), and applying less probing investigation to existing medicines.
4. Waiver of filing requirements for those medicines believed to be at lower risk of excessive pricing, such as patented over-the-counter (OTC) medicines, certain non-prescription controlled substances, generic and veterinary medicines unless specifically requested to do so by the PMPRB, and only opening an investigation in the event that a complaint is received in respect of one of these types of products.

As previously reported in our article concerning the amendments to the Regulations, such amendments were first published in August 2019 and were originally intended to come into force on January 1, 2021. However, due to the volume and nature of feedback received from prior draft guidelines and constitutional challenges in both the Federal and Québec courts (see our article), only some of the amendments came into force on July 1, 2022, (see our article) namely the provisions relating to:

1. The new basket of comparator countries (the PMPRB11), which were amended to add Australia, Belgium, Japan, the Netherlands, Norway and Spain, while removing Switzerland and the United States and maintaining the listed countries France, Germany, Italy and Sweden (the Schedule to Subparagraph 4(1)(f)(iii)of the Regulations); and
2. The provisions relating to reduced reporting requirements for medicines at lowest risk of excessive pricing (Section 3.1 of the Regulations).

The amendments introducing the consideration of pharmacoeconomic factors in to the determination of excessive pricing (i.e., pharmacoeconomic value in Canada, size of the market for the medicine in Canada and Canada's Gross Domestic Product (GDP)), as well as the new price reporting requirements that required reporting of price net of all pricing adjustments (including confidential rebate information) have not been enacted. Such provisions were held invalid by the Quebec Court of Appeal in a decision dated February 18, as reported in our prior article: Two major amendments to the patented medicines regulations.

If you wish to learn more about the PMPRB, get our insights on the draft guidelines or general Canadian commercialization strategies for medicines in light of PMPRB's jurisdiction, the PM(NOC) patent linkage regulations, patent term extensions (CSPs) and patent legislation, please contact one of the authors or a member of our Life Sciences Group.