Question and Answers - Proposed Amendments to the Patented Medicines Regulations

Q. What is the government trying to achieve with these amendments to the Patented Medicines Regulations?

Making prescription medicines more accessible and affordable is an important part of the federal Government's commitment to strengthening health care and improving the health of Canadians.  If passed, these amendments would help the Government of Canada strengthen its ability to protect Canadians from excessive prices for patented medicines. By providing the Patented Medicine Prices Review Board (PMPRB) with more relevant and effective regulatory tools, it would be better equipped to carry out its consumer protection mandate.

Q. Why are the proposed amendments needed?

Drug spending in Canada has increased from less than 10% of total health expenditure in the late 1950s, to about 16% today. Medicines are now the second-largest category of spending in health care, ahead of physician services.  Canada’s per capita spending on medicines is second only to the United States. Canadians pay higher prices for prescription medicines than most other developed countries, which can result in limited access to innovative medicines, a financial burden on patients, and limited resources for other critical areas of the health care system.

Q. What are the key measures in the proposed amendments?

The proposed amendments include three key measures that would:

  1. Provide the PMPRB with new factors that it would use when determining if the price of a patented medicine is excessive. The current factors direct the PMPRB to consider the prices at which the medicine (and other similar medicines) have been sold in Canada and other countries. The proposed new factors would direct the PMPRB to also consider the price of a patented medicine in relation to its value and impact on the health care system.
  2. Update the list of countries that the PMPRB uses to compare prices to include countries with similar consumer protection measures, economic standing and pharmaceutical markets as Canada.
  3. Change current reporting requirements to:
    1. add new reporting requirements to support the new factors,
    2. alter price and revenue information requirements to include all third-party price adjustments (such as rebates and discounts), and
    3. remove the reporting requirements for patented medicines that have the lowest risk of being priced excessively.

Q. Would these amendments cause a delay in the approval of new medicines in Canada?

The price of a medicine is not a factor in the process used to approve new medicines in Canada. The PMPRB begins reviewing prices of patented medicines after their first sale, meaning that, in the vast majority of cases, the medicine has already been approved for sale in Canada.

The PMPRB does regulate the prices of unapproved medicines sold to Canadians through Health Canada’s Special Access Programme.  This pricing review does not hinder the manufacturer’s ability to seek future approval to sell the medicine in Canada. The PMPRB cannot delay or withhold the approval of new medicines, nor is there an obligation for manufacturers to have the price of their new medicine reviewed by the PMPRB before the first sale occurs.

Q. What would be the anticipated impact on the prices of patented medicines in Canada?

Overall, patented medicine prices would be expected to be lower.  For high cost specialty medicines that do not have much competition, such as biologics and medicines for rare diseases, the proposed amendments could reduce prices significantly, by as much as 30-40%. It is important to note that these drugs currently account for nearly 25% of drug plan costs and are expected to increase as a proportion of drug spending in the future.

For other types of medicines where there is greater competition (e.g. different brands of medicines for the same medical condition), it is expected there would be less impact as the competition in the market is already making these medicines less prone to excessive pricing.

Q. Would companies still bring their medicines to Canada if prices were lower?

Prices are currently significantly lower in several countries economically comparable to Canada.  Companies still bring medicines to those countries at rates that are equal to - or better than – the rates that Canada enjoys. Even with the decrease in prices that these proposed amendments could bring, Canada would still remain a sizeable market for patented medicines. This should continue to drive companies to bring their medicines to Canada, even after the proposed amendments would take effect.

Q. How can I participate in this consultation?

The public comment period is open for 75 days ending February 14, 2018.

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