2023-24 Operating context

In July of 2022, long awaited amendments to the Patented Medicines Regulations (“Regulations) came into force. The main change brought into effect by these amendments is to the group of countries the PMPRB compares the prices of patented medicines in Canada to for the purpose of determining whether they are excessive. The new group is composed of countries that, in the aggregate, have much lower priced patented medicines than the old group. Whereas the policy intent behind the composition of the old group was to have prices in Canada in line with countries that attract significant investment in pharmaceutical research and development (R&D), on the assumption that Canada would enjoy come to attract similar levels of R&D investment, the policy intent behind the new group is to have Canadian prices more closely aligned with median prices in member countries of the Organization for Economic Development (OECD). Changes to the PMPRB’s pricing Guidelines are necessary in order to give effect to this new policy on a day-to-day administrative basis and to realize the Board’s longstanding commitment to modernize and simply its regulatory framework.

To that end, in October of 2022, the Board commenced a public consultation on new proposed draft Guidelines. In developing the draft Guidelines, the Board took into account the feedback received from stakeholders and the public as part of recently held consultations on other proposed changes to its Guidelines. The Board was also mindful of the evolving nature of the jurisprudence on excessive pricing in Canada and of its continuing duty to use its consumer protection powers in a responsible and efficient manner. 

The Board’s latest Guidelines consultation, which ended on December 5, 2022, took place against the backdrop of a rapidly changing regulatory landscape and policy environment for pharmaceuticals, the pace of which has significantly intensified with the advent of the COVID-19 pandemic.  National security, political imperatives, and supply chain disruptions have become confounding factors in the formulation and prioritization of pharmaceutical policy, not just in Canada but throughout the developed world. In Canada in particular, the former policy underlying the Regulations of seeking to attract R&D investment has been given fresh impetus, as evidenced by a whole of government effort to build up domestic biopharmaceutical manufacturing capacity as a safeguard against future potential pandemics. Legacy policies in the pharmaceutical space, such as the one underlying the amendments to the PMPRB’s Regulations, are now considered subordinate to other imperatives.

With the recent appointment of a new Chairperson, the PMPRB will pick up the project of conducting consultations on proposed new Guidelines in the 2023-24 fiscal year and will explore potential avenues for a more synergistic relationship between the reforms to the PMPRB’s regulatory framework and the federal government’s higher-level objectives in pharmaceutical policy.