Annual Report 2022

Annual Report 2022

ISSN 1495 – 0561
Cat. no.: H78E-PDF
PDF version (4.6 MB)

 

Statistical Highlights 2022

Price Review Mandate

  • 1,138 patented medicines for human use were reported to the PMPRB, including 69 new medicines.
  • 8 Voluntary Compliance Undertakings (VCUs) were accepted as of December 31, 2022.
  • More than $31.2 million in excess revenues and potential excess revenues were offset by way of payments to the Government of Canada through VCUs, settlements, and Board Orders.

Reporting Mandate

Sales Trends:

  • Sales of patented medicines in Canada were $18.4 billion in 2022, an increase of 5.7% from the previous year.
  • Patented medicines accounted for approximately 49.0% of the sales of all medicines in Canada in 2022.

Price Trends:

  • The Consumer Price Index rose by 6.8%, while the national average transaction price for patented medicines increased by 0.8%.
  • Canadian list price ratios rose from third to second highest among the 31 Organisation for Economic Co-operation and Development (OECD) countries, behind only the US.

Research and Development

R&D–to–Sales Ratios Decreased in 2022:
  • 3.1% for all rights holders, a decrease from 3.4% in 2021.
  • 3.2% for Innovative Medicines Canada members, a decrease from 3.5% in 2021.
R&D Expenditures:
  • $914.0 million in total R&D expenditures were reported by rights holders in Canada, a decrease of 1.0% over 2021.
  • $748.6 million in R&D expenditures were reported by Innovative Medicines Canada members, an increase of 1.7% over 2021.
 

Letter to the Minister

24 November 2023

The Honourable Mark Holland, P.C., M.P.
Minister of Health
House of Commons
Ottawa, Ontario
K1A 0A6

Dear Minister:

I have the pleasure to present to you, in accordance with sections 89 and 100 of the Patent Act, the Annual Report of the Patented Medicine Prices Review Board for the year ended December 31, 2022.

Yours very truly,

Thomas J. Digby
Chairperson

 

Chairperson’s Message

Thomas J. Digby

The Patented Medicine Prices Review Board (PMPRB) is an independent quasi-judicial body established by Parliament in 1987 under the Patent Act (the Act). The PMPRB’s mandate is to protect and inform Canadians by ensuring that the prices of patented medicines sold in Canada are not excessive and by reporting on pharmaceutical trends.

With the coming-into-force of Health Canada’s amendments to the Patented Medicines Regulations on July 1, 2022, the PMPRB has been developing new Guidelines to implement these regulatory changes into the Board’s operations. The Board acknowledges these regulatory changes reflect important court decisions, including by the Quebec Court of Appeal [Merck Canada Inc c Procureur général du Canada, 2022 QCA 240] and the Federal Court of Appeal [Alexion Pharmaceuticals v Canada (Attorney General), 2021 FCA 157; Innovative Medicines Canada v Canada (Attorney General), 2022 FCA 210].

The regular operations of the Board have continued to provide value for Canadian payers. In the fall of 2022, the Board’s Hearing Panel issued a decision that found that the price of Procysbi (cysteamine bitartrate) was excessive under section 83 and 85 of the Patent Act, directing Horizon Therapeutics Canada to pay just over $22 million to the Receiver General of Canada. This brought the total excess revenues collected through Voluntary Compliance Undertakings (VCUs), settlements, and Board Orders in 2022 to more than $31 million.

Analytical studies conducted through the PMPRB’s reporting mandate under the banner of the National Prescription Drug Utilization Information System (NPDUIS) initiative continue to show the vast pressures stemming from the increased use of higher-cost medicines in Canada. Over the last five years, sales of patented medicines have grown by an average of 1.8% per year, reaching $18.4 billion in 2022. High-cost medicines now account for 57.5% of these sales. In 2022 the 20 top-selling patented medicines in Canada, which accounted for 37.7% of total patented medicine sales, had a median treatment cost of $21,345, compared to just $803 in 2013.

Significantly, in 2022, the average list price for medicines in Canada rose from third to second highest among the 31 countries of the Organisation for Economic Co-operation and Development (OECD), behind only the US. The average list price is above all our PMPRB11 comparator countries, as may be seen in the average foreign–to–Canadian price ratios calculated using external data. It is acknowledged that the new Patented Medicines Regulations took effect at the mid–point of 2022, and are not expected to impact average list price ratios until later reporting cycles.

In early 2023, Douglas Clark, the PMPRB’s longtime Executive Director, announced his retirement after nearly a decade with the organization. On behalf of the PMPRB, I offer our thanks for his years of dedication and commitment. As we move forward under new leadership, the PMPRB remains committed to serving Canadians through the responsible and efficient use of our regulatory powers, in collaboration with and in support of our many stakeholders and partners in the Canadian healthcare system.

Thomas J. Digby
Chairperson

 

About the Patented Medicine Prices Review Board: Acting in the Interest of Canadians

The Patented Medicine Prices Review Board (PMPRB) is an independent, quasi-judicial body established by Parliament in 1987 under the Patent Act (Act).

The PMPRB is a quasi–judicial administrative agency with a dual price review and reporting mandate. Through its price review mandate, it ensures that the prices of patented medicines sold in Canada are not excessive. The PMPRB also reports on trends in pharmaceutical sales and pricing for all medicines and on research and development (R&D) spending by rights holders. In addition, at the request of the Minister of Health, pursuant to section 90 of the Act, the PMPRB conducts critical analyses of price, utilization, and cost trends for patented and non-patented prescription medicines under the National Drug Utilization Information System (NPDUIS) initiative. Its reporting mandate provides pharmaceutical payers and policy makers with information to make rational, evidence-based reimbursement and pricing decisions.

The PMPRB is part of the Health Portfolio, which includes Health Canada, the Public Health Agency of Canada, the Canadian Institutes of Health Research, and the Canadian Food Inspection Agency. The Health Portfolio supports the Minister of Health in maintaining and improving the health of Canadians.

Our Mission

The PMPRB is a respected public agency that makes a unique and valued contribution to sustainable spending on pharmaceuticals in Canada by:

  • Acting as an effective check on the prices of patented medicines and intervening where the Board determines a price to be excessive; and
  • Providing stakeholders with price, cost, and utilization information to help them make timely and knowledgeable pricing, purchasing, and reimbursement decisions.

Protecting Consumers in a Complex Marketplace

Protecting Consumers in a Complex Marketplace

(CADTH) Canadian Agency for Drugs and Technologies in Health; (INESSS) Institut national d'excellence en santé et en services sociaux; (CDR) Common Drug Review; (pCODR) pan-Canadian Oncology Drug Review; and (pCPA) pan-Canadian Pharmaceutical Alliance

Data source: PMPRB

Figure description

This flowchart illustrates the role of Canadian regulators during the life cycle of a medicine through research and development, the patent period, and post-patent generic period. Health Canada reviews medicines for safety, efficacy, and quality at the start of the patent period and provides subsequent post-market surveillance. The PMPRB exercises price monitoring and investigation during the patent period, after Health Canada’s review. Private drug plans reimburse during and after the patent period, following Health Canada’s review. CADTH conducts the Common Drug Review and pan-Canadian Oncology Drug Review processes after Health Canada’s review. The Institut national d'excellence en santé et en services sociaux (INESSS) conducts this evalution process for Quebec. For provinces and territories, the pan-Canadian Pharmaceutical Alliance negotiations begin after CADTH reviews, and reimbursement is after these negotiations.

 

Although part of the Health Portfolio, because of its quasi-judicial responsibilities, the PMPRB carries out its mandate at arm’s length from the Minister of Health, who is responsible for the sections of the Act pertaining to the PMPRB. The PMPRB also operates independently of other healthcare–related bodies, such as:

  • Health Canada, which approves medicines for marketing in Canada based on their safety, efficacy, and quality;
  • federal, provincial, and territorial (F/P/T) public drug plans, working collectively as the pCPA, which approve the listing of medicines on their respective formularies for reimbursement purposes; and
  • the Common Drug Review and pan-Canadian Oncology Drug Review, administered by the CADTH, which recommend which new medicines should qualify for reimbursement by the pCPA. In Quebec, this evaluation process is conducted by INESSS.

The PMPRB is composed of up to five Board Members, Governor–in–Council appointees who are assisted in their work by public servants (Staff).

Jurisdiction

Price Review

1,138 patented medicines were reported to the PMPRB in 2022.

The PMPRB reviews the price at which rights holders (companies) sell their products to wholesalers, hospitals, pharmacies, and other large distributors to ensure that this price is not excessive. This price is sometimes also known as the "factory gate" (ex-factory) price. The PMPRB does not review the prices of non-patented medicines (e.g., generics).

The PMPRB’s jurisdiction is not limited to medicines for which the patent is for the active ingredient or for the specific formulation(s) or uses the rights holder sells the medicine for in Canada. Rather, its jurisdiction also covers medicines for which a patent "pertains", including patents for manufacturing processes, delivery systems or dosage forms, indications/use, and any formulations.

The Act requires rights holders (which include any parties who benefit from patents regardless of whether they are owners or licensees under those patents and regardless of whether they operate in the "brand" or "generic" sector of the market) to inform the PMPRB of their intention to sell a new patented medicine. Upon the sale of a new patented medicine, rights holders are required to file price and sales information at introduction and, thereafter, until all patents pertaining have expired. Rights holders are not required to obtain approval of the price to be able to market their medicines. However, the Act requires the PMPRB to ensure that the prices of patented medicines sold in Canada are not excessive.

Staff review the prices that rights holders charge for each individual strength and form of a patented medicine. If the price of a patented medicine appears to be potentially excessive, the rights holder may volunteer to lower its price and/or refund its potential excess revenues through a Voluntary Compliance Undertaking (VCU). If this fails, the Chairperson may consider whether a hearing on the matter is in the public interest. At the hearing, a panel composed of Board members acts as a neutral arbiter between Staff and the rights holder. If a Hearing Panel concludes, after hearing all of the evidence in light of the factors set out in section 85 of the Act, that the price of a patented medicine is/was excessive in any market, it can order the maximum ceiling price to be reduced to a non-excessive level. It can also order a rights holder to make a monetary payment to the Government of Canada to offset the excess revenues earned and, in cases where the panel determines there has been a policy of excessive pricing, it can double the amount of the monetary payment.

Reporting

As required by the Act, the PMPRB reports annually to Parliament through the Minister of Health on its price review activities, the prices of patented medicines and price trends of all prescription medicines, and on the R&D expenditures reported by pharmaceutical rights holders.

In addition, as a result of an agreement by the F/P/T Ministers of Health in 2001, and at the request of the Minister of Health, pursuant to section 90 of the Act, the PMPRB conducts critical analyses of price, utilization, and cost trends for patented and non-patented prescription medicines under the National Prescription Drug Utilization Information System (NPDUIS). The PMPRB publishes the results of NPDUIS analyses in the form of reports, posters, presentations, briefs, and chartbooks. This program provides F/P/T governments and other interested stakeholders with a centralized, objective, and credible source of information on pharmaceutical trends.

The PMPRB also hosts various forums, such as webinars, research forums, and information sessions with academics and policy experts to discuss and disseminate research on emerging areas for study on pharmaceutical trends in Canada and internationally.

Communications and Outreach

The PMPRB takes a proactive and plain-language approach to its external communication activities. This includes targeted social media campaigns and more conventional (e.g., email) engagement with domestic, international, and specialized news media. The PMPRB is actively pursuing additional opportunities to leverage new and emerging media to communicate with its stakeholders and the Canadian public.

The PMPRB recognizes the importance of openness and transparency as we continue to work on modernizing the way we carry out our mandate. We communicate regularly, through various channels, about our progress, including projected timelines, and key milestones. Engagement with stakeholders will remain a central part of our multi-faceted communications approach. Reporting on our progress helps ensure we remain focused on delivering results.

Governance

The Board consists of not more than five members who serve on a part-time basis. Board members, including a Chairperson and a Vice–Chairperson, are appointed by the Governor–in–Council. The Chairperson, designated under the Act as the Chief Executive Officer of the PMPRB, has the authority and responsibility to supervise and direct its work. By law, the Vice–Chairperson exercises all the powers and functions of the Chairperson when the Chairperson is absent or incapacitated, or when the office of the Chairperson is vacant.

The members of the Board, including the Chairperson, are collectively responsible for implementing the applicable provisions of the Act. Together, they establish the guidelines, rules, by-laws, and other policies of the PMPRB provided for by the Act (section 96) and consult, as necessary, with stakeholders including provincial and territorial Ministers of Health, representatives of consumer groups, the pharmaceutical industry, and others.

Members of the Board

Chairperson

Thomas J. Digby

Thomas J. Digby

Thomas Digby was appointed Chairperson of the Board on February 1, 2023.

Thomas Digby is a lawyer with more than 25 years’ experience in Canadian and US intellectual property (IP) law, in the field of pharmaceuticals. He has worked closely with diverse biotech start-ups, their venture investors, and, for 10 years, with the global pharmaceutical leader, Novartis.

Thomas attended Queen’s University (BSc [Hons], 1987) and Dalhousie University (MSc [Biochem], 1990), and graduated from Dalhousie Law School (now Schulich School of Law) (JD, 1992). He is licensed to practice in both Canada and the United States (Ontario [1994], New York [1995], Massachusetts [1995], British Columbia [1998]). He was formerly registered to practice before the United States Patent and Trademark Office (2005-2012).

After articling with Blakes in Toronto, Thomas worked with a variety of biotech start-ups including Visible Genetics, Inex Pharmaceuticals, and Xenon Pharmaceuticals. At Inex, he provided IP strategy for the discovery efforts that led to the lipid-nanoparticle delivery system used in current COVID mRNA vaccines.

Thomas joined Novartis at its research headquarters in Cambridge MA (2005-2012), and later moved to the head office in Basel, Switzerland (2012-2015). At Novartis, he specialized in global transactions, led a multi-country IP enforcement program, supported the global tax team and the Novartis Venture Fund, and was regularly involved with the IP strategy of the generic (Sandoz) and innovator (Novartis) divisions.

In 2016, Thomas returned to Vancouver with his family, where he is a sole practitioner supporting the IP strategy of a small number of Canadian and US biotech clients. Among other community roles, he is a Commissioner of the Vancouver Board of Parks and Recreation.

Vice-Chairperson

Anie Perrault

Anie Perrault.jpg

Anie Perrault was appointed Vice-Chairperson of the Board on August 15, 2023.

Ms. Anie Perrault is a lawyer by training (University of Ottawa – 1992; Barreau 1993) with more than 30 years of professional experience in the public and private sectors. Her career has focused on communications and public affairs related to genomic research and biotechnology and she has held several strategic positions at a national level in this field. She was Director General of BIOQuébec from 2013 to 2022 and Vice President, Communications of Genome Canada from 2001 to 2006.

Named Sun Life Leadership – Exceptional Woman finalist in the prestigious Les Mercuriades 2021 competition, Ms. Perrault is also an accredited mediator from the Institute of Mediation and Arbitration of Quebec. Ms. Perrault was a Member (administrative judge) of the Canadian Human Rights Tribunal from 2015 to 2021, and continues to act as a mediator there today.

In 2013, Ms. Perrault received the title of Certified Corporate Administrator from the College of Corporate Administrators at Laval University. She is president of the board of directors of Génome Québec. She has also served on the board of directors of ACCESSA since 2020. She was a member of the boards of the Jeanne-Mance Foundation from 2016 to 2022, Loto-Québec from 2011 to 2021 and the University of Sherbrooke from 2016 to 2019.

Members

Carolyn Kobernick,
B.C.L., LL.B.

Carolyn Kobernick

Carolyn Kobernick was appointed Member of the Board on June 13, 2014.

Ms. Kobernick is a lawyer and former public servant. Prior to her retirement in 2013, Ms. Kobernick had been Assistant Deputy Minister of Public Law for the Department of Justice since 2006. As principal counsel to the Minister of Justice and Attorney General of Canada, Ms. Kobernick was instrumental in the development and delivery of policy for the Department of Justice. In addition to identifying key strategic, legal, and operational matters, she tackled cross-cutting national issues as the liaison between the Department of Justice and other government organizations.

Ms. Kobernick holds a B.C.L. and LL.B. from McGill University and is a member of the bar of Ontario. In 2012 she obtained a Certificate in Adjudication for Administrative Agencies, Boards and Tribunals from the Osgoode Hall Law School and the Society of Ontario Adjudicators and Regulators.

Organizational Structure and Staff

PMPRB Organizational Chart (September 2023)

Patented Medicine Prices Review Board Organizational Chart (September 2023)
Figure description

This organizational chart illustrates the high–level reporting structure within the PMPRB and lists the current Board and Senior Staff members. Board: Chairperson–Thomas J. Digby; Vice–Chairperson–Anie Perrault; Member–Carolyn Kobernick. Senior Staff: Executive Director–Vacant; General Counsel and Senior Director–Isabel Jaen Raasch; Director Board Secretariat–Mélissa Lyonnais; Director Policy and Economic Analysis–Tanya Potashnik; Director Regulatory Affairs and Outreach–Guillaume Couillard; Senior Director Corporate Services and CFO–Devon Menard.

 

Executive Director

The Executive Director is responsible for advising the Board and for the leadership and management of Staff.

Regulatory Affairs and Outreach

The Regulatory Affairs and Outreach Branch reviews the prices of patented medicines sold in Canada; ensures that rights holders are fulfilling their filing obligations; encourages rights holders to comply voluntarily with the PMPRB’s Guidelines; implements related policies; and investigates complaints into the prices of patented medicines.

Policy and Economic Analysis

The Policy and Economic Analysis Branch develops policy and strategic advice; leads stakeholder consultations and makes recommendations on possible amendments to the PMPRB’s Guidelines; conducts research and analysis on the prices of medicines, pharmaceutical market developments, and R&D trends; and publishes studies aimed at providing F/P/T governments and other interested stakeholders with centralized, objective, and credible information in support of evidence-based policy.

Corporate Services

The Corporate Services Branch provides advice and services in relation to human resources management; facilities; procurement; health, safety, and security; information technology; and information management. It coordinates activities pursuant to the Access to Information Act and the Privacy Act, and is responsible for strategic planning and reporting. It is also responsible for financial planning and reporting, accounting operations, audit and evaluation, and liaising with federal central agencies on these topics.

Board Secretariat

The Board Secretariat manages the Board’s meeting and hearing processes, including the official record of proceedings.

General Counsel

The General Counsel advises the PMPRB on legal matters, leads the legal team representing Staff in proceedings before the Board, and liaises with counsel for the Attorney General in PMPRB–related proceedings before federal and provincial courts.

Budget

In 2022-23, the PMPRB had a budget of $17.0 million and an approved staff level of 84 full–time equivalent employees.

Table 1. Budget and Staffing

  2021-22 2022-23 2023-24
Budget*

$18,892,322

$17,003,213

$17,093,674

Salaries and employee benefits

$10,175,540

$10,164,617

$10,257,961

Operating

$2,510,296

$2,375,235

$2,372,352

Special Purpose Allotment

$6,206,486

$4,463,361

$4,463,361

Full Time Employees (FTEs)

85

84

81

* Budget amounts are based on the Main Estimates.

The Special Purpose Allotment is reserved strictly for external costs of public hearings (legal counsel, expert witnesses, etc.).

Unspent funds are returned to the Consolidated Revenue Fund.

 

Monitoring Prices of Patented Medicines: Informing on PMPRB Price Review Activities

Medical advancements have introduced many innovative new medicines to the Canadian marketplace to improve existing treatments and to treat conditions that previously had no pharmaceutical therapy. However, many of these new medicines come at a very high cost. Since 1987, pharmaceutical costs in Canada have grown at an average annual rate of 6.6%,Footnote 1 outpacing most other health care costs and growing at approximately three times the rate of inflation over the same period. At 13.6 % of total health care spending, pharmaceutical expenditure is level with spending on physicians.Footnote 2 In 2021, about 1 in 5 Canadians reported having no prescription medicine coverage while many more were under-insured or faced high deductibles or co-pays. As a result, almost 1 in 10 Canadians had to forego filling a prescription for reasons related to cost.Footnote 3

The PMPRB protects the interests of Canadians by ensuring that the prices of patented medicines sold in Canada are not excessive. It does this by reviewing the prices that rights holders charge for each individual patented medicine and by ensuring that rights holders reduce their prices and pay back excess revenues, where appropriate.

Reporting Requirements

By law, rights holders must file information about the sale of their medicines in Canada. The Act and the Patented Medicines Regulations (Regulations) set out the information required and Staff reviews pricing information on an ongoing basis until all relevant patents have expired. When the review of the information filed by rights holders suggests that the price of a patented medicine may be excessive, the rights holder is given an opportunity to voluntarily lower its prices and/or refund its potential excess revenues through a Voluntary Compliance Undertaking (VCU). If the rights holder chooses not to submit a VCU, the Chairperson may consider whether a hearing on the matter is in the public interest. If such a hearing is held before a panel composed of Board members ("Hearing Panel”) and that Hearing Panel concludes, after hearing all of the evidence in light of the factors set out in section 85 of the Act, that the patented medicine was priced excessively in any market, an order may be issued to the rights holder requiring that (1) the maximum ceiling price of the medicine be reduced to a non-excessive level; and/or (2) that measures be taken to offset any excess revenues that may have been earned through sales of the patented medicine at an excessive price.

Amending Regulations to the Patent Act were published in the Canada Gazette, Part II, moving forward with the implementation of a new basket of comparator countries and reduced reporting requirements for those medicines at lowest risk of excessive pricing, which came into force on July 1, 2022. The composition of reference countries moved from the previous seven (PMPRB7) to a broader group of eleven countries (PMPRB11) by removing the United States and Switzerland and adding six others (Australia, Belgium, Japan, Netherlands, Norway, and Spain).

The Compendium of Policies, Guidelines and Procedures details price tests and triage mechanisms used by Staff up to July 1, 2022, when it reviewed and investigated the prices of patented medicines. The Board is in the process of developing new Guidelines and until new Guidelines are implemented, Interim Guidance issued by the Board on August 18, 2022, is in operation. Guidelines are not binding and are developed in consultation with stakeholders, including the provincial and territorial Ministers of Health, consumer groups, and the pharmaceutical industry. Copies of the Act, the Regulations, and the Guidelines are available on the PMPRB’s website.

Failure to Report

Access to timely and accurate information regarding the sale of patented medicines is necessary for the PMPRB to fulfil its price review mandate. Therefore, rights holders and former rights holders are required to submit this information to the PMPRB within the timelines set out in the legislation. The information that must be submitted and related deadlines are set out in section 82 of the Act and in the Regulations. In 2022, two medicines were reported to the PMPRB for the first time despite being patented and sold prior to 2022 (see Table 2, Failure to Report the Sale of Patented Medicines).

Failure to File Price and Sales Data (Form 2)

Failure to file refers to the complete or partial failure of a rights holder to file the information required by the Act and the Regulations to the PMPRB. There were no Board Orders issued for failure to file in 2022.

Table 2. Failure to Report the Sale of Patented Medicines

Rights holder Trade name* Medicinal ingredient Year medicine reported to the PMPRB as under PMPRB jurisdiction Year medicine reported to the PMPRB with subsequent patent

Sanofi-Aventis Canada Inc.

Trurapi
(2 DINs)

Insulin aspart

2021

-

Sanofi-Aventis Canada Inc.

Admelog
(2 DINs)

Insulin lispro

2019

-

* Drug Identification Numbers (DINs)

Data source: PMPRB

Scientific Review

Human Drug Advisory Panel

Under the Guidelines, which were operational until July 1, 2022, a scientific evaluation was done on all new patented medicines as part of the price review process. The PMPRB established the Human Drug Advisory Panel (HDAP) to provide recommendations on the categorization of patented medicines to Staff. The HDAP conducted an evaluation to provide clinical context pertaining to the scientific information that was being considered by Staff. HDAP members reviewed and evaluated the appropriate scientific information available, including any submission by a rights holder about the proposed level of therapeutic improvement, the selection of comparator medicines, and comparable dosage regimens.

The HDAP provided recommendations on the therapeutic benefit of new patented medicines according to the following definitions:

  • Breakthrough: A medicine that is the first one sold in Canada to effectively treat a particular illness or effectively address a particular indication.
  • Substantial Improvement: A medicine that, relative to other medicines sold in Canada, provides substantial improvement in therapeutic effects.
  • Moderate Improvement: A medicine that, relative to other medicines sold in Canada, provides moderate improvement in therapeutic effects.
  • Slight or No Improvement: A medicine that, relative to other medicines sold in Canada, provides slight or no improvement in therapeutic effects.
Figure 1. Percentage and Number of New Patented Medicines Reviewed, by Therapeutic Benefit figure 1

* Updated to include reviews occurring after the previous Annual Report’s reporting date of March 31, 2022

Assessment as of March 31, 2023

Due to the Amending Regulations and update of comparator countries, new medicine reviews were not conducted until such time as new Guidelines were finalized. As per the Interim Guidance, the status of a category of medicines including all new medicines is "under review".

Data source: PMPRB

Figure description

This bar graph depicts the breakdown in percentages of new patented medicines by therapeutic benefit over existing medicines in the year of introduction for the period 2013 to 2022. An overall revenue share for the period depicts the percentage of sales related to each level of therapeutic benefit.

  Under Review Slight/No improvement Moderate improvement Substantial improvement Breakthrough

2013 Intro

79%

15%

2%

4%

2014 Intro

83%

7%

7%

3%

2015 Intro

86%

9%

4%

1%

2016 Intro

91%

7%

2%

2017 Intro

88%

10%

1%

1%

2018 Intro

91%

7%

1%

1%

2019 Intro

82%

14%

4%

2020 Intro

93%

4%

1%

1%

2021 Intro*

25%

68%

2%

5%

2022 Intro

100%

Overall 2013-2022

9%

79%

8%

2%

2%

Overall 2013-2022 revenue share

21.2%

61.6%

9.0%

7.7%

0.5%

A table below the graph gives the number of new patented medicines reviewed in each level of therapeutic improvement.

 

2013 Intro 2014 Intro 2015 Intro 2016 Intro 2017 Intro 2018 Intro 2019 Intro 2020 Intro 2021 Intro* 2022 Intro Overall 2013-2022 Overall 2013-2022 Revenue Share

Under Review

-

-

-

-

-

-

-

-

15

69

84

21.2 %

Slight/No Improvement

91

86

73

116

70

98

62

71

40

-

707

61.6 %

Moderate Improvement

17

7

8

9

8

8

11

3

1

-

72

9.0 %

Substantial Improvement

2

7

3

-

1

1

-

1

-

-

15

7.7 %

Breakthrough

5

3

1

3

1

1

3

1

3

-

21

0.5 %

 

Figure 1 shows the distribution of new patented medicines introduced from 2013 to 2022 by their level of therapeutic benefit. The largest percentage of patented medicines (78.6%) introduced since 2013 were categorized as "Slight or No Improvement” in therapeutic benefit over existing therapies.Footnote 4

The "Overall 2013–2022" bar represents the therapeutic benefit breakdown for all new patented medicines introduced from 2013 to 2022. The "Overall 2013–2022 Revenue Share" bar illustrates the revenue share by therapeutic benefit for all new patented medicines introduced from 2013 to 2022.

As per the Interim Guidance issued by the Board on August 18, 2022, patented medicines without a maximum average potential price or non-excessive average price as of July 1, 2022, were not subject to price reviews by PMPRB Staff and are reported as "under review".

Price Review

The PMPRB reviews the average price (net of reported discounts and deductions) and the list price of each strength of each individual dosage form of each patented medicine. In most cases, this unit is consistent with the Drug Identification Number(s) (DINs) assigned by Health Canada at the time the medicine is approved for sale in Canada.

New Patented Medicines Reported to the PMPRB in 2022

For the purpose of this report, a new patented medicine in 2022 is defined as any patented medicine or new dosage form or strength of a patented medicine first sold in Canada, or previously sold but first patented, between December 1, 2021, and December 1, 2022.

There were 69 new patented medicines for human use reported as sold in 2022. Some are one or more strengths of a new active substance and others are new presentations of existing medicines. Of these 69 new patented medicines, six (8.7%) were sold in Canada prior to the issuance of the Canadian patent that brought it under the PMPRB’s jurisdiction. Table 3 shows the year of first sale for these medicines.

Table 3. Number of New Patented Medicines for Human Use in 2022 by Year First Sold

Year First Sold Number of Medicines
2020 1
2021 4
2022 1
Total 6

Data source: PMPRB

Figure 2 illustrates the number of new patented medicines for human use reported to the PMPRB from 1989 to 2022.

Figure 2. Number of New Patented Medicines for Human Use figure 2

Data source: PMPRB

Figure description

This bar graph depicts the number of new patented medicines for human use reported to the Patented Medicine Prices Review Board by year.

In 1989, 68 patented medicines for human use were reported to the PMPRB;
1990: 74;
1991: 94;
1992: 88;
1993: 77;
1994: 64;
1995: 81;
1996: 80;
1997: 93;
1998: 90;
1999: 111;
2000: 81;
2001: 82;
2002: 98;
2003: 77;
2004: 96;
2005: 68;
2006: 112;
2007: 77;
2008: 83;
2009: 81;
2010: 68;
2011: 109;
2012: 82;
2013: 115;
2014: 103;
2015: 85;
2016: 128;
2017: 80;
2018: 108;
2019: 81;
2020: 79;
2021: 59;
2022: 69.

 

Price Review of Existing Patented Medicines for Human Use in 2022

For the purpose of this report, existing patented medicines include all patented medicines first sold and reported to the PMPRB prior to December 1, 2021

At the time of this report, there were 1,069 existing patented medicines:

  • 819 were not the subject of investigations;
  • 197 were the subject of investigations;
  • 36 were under review;
  • 14 were the subject of a Voluntary Compliance Undertaking;
  • 2 were subject to Board Order; and
  • 1 was subject to a Settlement Agreement and Order.

Table 4 provides a summary of the status of the price review of the new and existing patented medicines for human use in 2022.

Table 4. Patented Medicines for Human Use Sold in 2022—Status of Price Review as of March 31, 2023

  New medicines introduced in 2022 Existing medicines Total
Total 69 1,069 1,138
Not Subject to Investigation 0 819 819
Under Review 69 36 105
Subject to Investigation 0 197 197
Subject to Voluntary Compliance Undertaking (VCU) 0 14 14*
Subject to Board Order 0 2 2
Subject to Settlement Agreement and Order 0 1 1

* The terms and conditions of previous years’ VCUs that have carried over into 2022 are captured in this count.

Data source: PMPRB

Update From the 2021 Annual Report

  • 22 of the patented medicines for human use that were reported as under review in the 2021 Annual Report remain under review.
  • 56 of the 169 investigations reported in the 2021 Annual Report resulted in one of the following:
    • the closure of the investigation;
    • a VCU by the rights holder to reduce the price and offset potential excess revenues through a payment and/or a reduction in the price of another patented medicine (see "Voluntary Compliance Undertakings"); or
    • a public hearing to determine whether the price was excessive, including any remedial Order determined by the Board (see "Hearings").

Patented Over-the-Counter Medicines, Patented Generic Medicines, and Patented Medicines for Veterinary Use

The reduced reporting obligations for medicines with lowest risk of excessive pricing (i.e., veterinary, over-the-counter, and certain "generic" medicines) came into force on July 1, 2022, as provided for in the Amending Regulations. Staff only review the prices of patented over-the counter medicines, patented generic medicines, and patented veterinary medicines when a complaint of excessive pricing has been received. No complaint-based investigation was undertaken in 2022.

Certificates of Supplemental Protection

Amendments made to the Patented Medicines section of the Act, published in the Canada Gazette, which came into force on June 30, 2021, extended the PMPRB’s jurisdiction to medicines that are protected by a Certificate of Supplementary Protection (CSP). A CSP gives the certificate holder the same legal rights given by the patent and extends patent protection for a maximum period of two years. There were 58 CSPs reported to the PMPRB in 2022, with expiration dates ranging from 2024 to 2037. Each patent that had their duration extended through a CSP can be linked to multiple patented medicines; in total, there are 144 patented medicines linked to these 58 CSPs.

Voluntary Compliance Undertakings and Hearings

Voluntary Compliance Undertakings

A VCU is a promise by a rights holder to reduce its price(s) and/or offset any potential excess revenues from the sale of a patented medicine that is subject to an investigation. The consideration of a VCU is an administrative procedure and does not constitute an admission or determination by the PMPRB that the price submitted by the rights holder, or used to calculate a revenue offset, is not excessive. However, the acceptance of a VCU by the Chairperson will result in the closure of an investigation.

In 2022, the Chairperson approved the closure of investigations based on the receipt of eight VCUs. In addition to price reductions for certain medicines, potential excess revenues totaling $921,189.80 were offset by way of a payment to the Government of Canada.

No additional VCUs met the criteria for inclusion as of May 31, 2023.

Table 5. Voluntary Compliance Undertakings in 2022 up to May 31, 2023

Patented medicine (Trade name)* Therapeutic use Rights holder Date of approval Offset of potential excessive revenues
Price reduction Payment to the government

VCUs in 2022

Gilteritinib (sold under trade name Xospata)
(1 DIN)

Indicated for the treatment of adult patients who have relapsed or refractory acute myeloid leukemia (AML) with a FMS-like tyrosine kinase 3 (FLT3) mutation.

Astellas Pharma Canada, Inc.

February

-

$400,000.00

Fremanezumab (sold under trade name Ajovy)
(2 DINs)

Indicated for the prevention of migraine in adults who have at least four migraine days per month.

Teva Canada Innovation

February

Yes

-

Burosumab (sold under trade name Crysvita)
(3 DINs)

Indicated for the treatment of X-linked hypophosphatemia (XLH) in adult and pediatric patients 6 months of age and older; also indicated for the treatment of FGF23–related hypophosphatemia in tumor-induced osteomalacia (TIO) associated with tumors that cannot be curatively resected or localized in adult patients.

Ultragenyx Pharmaceuticals Inc.

February

Yes

-

Dalbavancin (sold under trade name Xydalba)
(1 DIN)

Indicated for the treatment of adult patients with acute bacterial skin and skin structure infections (ABSSSI) caused by gram-positive microorganisms.

Paladin Labs Inc.

April

Yes

$20,181.32

Halobetasol proprionate / tazarotene (sold under trade name Duobrii)
(1 DIN)

Indicated for improving the signs and symptoms of plaque psoriasis in adult patients with moderate to severe plaque psoriasis.

Bausch Health, Canada Inc.

May

-

$107,814.48

Clevidipine (sold under trade name Cleviprex)
(1 DIN)

Indicated for the management of acute elevation of blood pressure in perioperative settings.

Chiesi USA, Inc.

May

Yes

-

Chlormethine hydrochloride (sold under trade name Ledaga)
(1 DIN)

Indicated for the topical treatment of stage IA and IB mycosis fungoides-type cutaneous T-cell lymphoma (MF-CTCL) in adult patients who have received prior skin-directed therapy.

Recordati Rare Diseases Canada Inc.

May

-

-

Olopatadine hydrochloride (sold under trade name Patanol) and olopatadine hydrochloride (sold under trade name Pataday)
(2 DINs)

Indicated for the treatment of allergic conjunctivitis and the treatment of ocular itching associated with seasonal allergic conjunctivitis, respectively.

Novartis Pharmaceuticals Canada Inc.

August

-

$393,194.00

Total for VCUs approved as of December 31, 2022

$921,189.80

VCUs in 2023 as of May 31, 2023

-

-

-

-

-

-

Total for VCUs approved as of May 31, 2023

$921,189.80

* Drug Identification Number (DINs)

Hearings

The PMPRB holds hearings into two types of matters:

  • excessive pricing; and
  • failure to file–jurisdiction.

Excessive Pricing

When an investigation into the price of a patented medicine is completed, and the matter is not resolved, the Executive Director may submit a report to the Chairperson. The Chairperson may decide to issue a Notice of Hearing if he or she is of the opinion that it is in the public interest. During a hearing, submissions and evidence from the parties are heard by a Hearing Panel consisting of at least two Board members. The Hearing Panel determines whether a patented medicine is being, or has been, sold at an excessive price in any market in Canada by taking into consideration the available information relating to the factors set out in section 85 of the Act. If the Hearing Panel finds the price is excessive, it can issue an order to reduce the maximum price of the patented medicine in question (or of another patented medicine of the rights holder) and/or to offset revenues received as a result of the excessive price. Judicial review of Board decisions can be sought in the Federal Court of Canada.

In January 2019, the PMPRB announced it would hold a public hearing in the matter of the price of the patented medicine cysteamine bitartrate sold under the trade name Procysbi by Horizon Therapeutics Canada. The purpose of this hearing was to determine whether the medicine has been, or is being, sold in any market in Canada at a price that, in the Board’s opinion, is or was excessive: and, if so, what order, if any, should be made to remedy the excessive pricing.

The hearing was held over several weeks in late 2020–early 2021, and in September 2022, a decision was issued by the Hearing Panel that found that the price of Procysbi was excessive under section 83 and 85 of the Patent Act. On October 13, 2022, the Board ordered Horizon to pay $22,028,977.26 to the Receiver General of Canada within 30 days of the order date. This was coupled with an order that the ceiling price of Procysbi be reduced to a non-excessive level.

Failure to File–Jurisdiction

When it appears that a rights holder has failed or refused to provide the PMPRB with the pricing, sales, or revenues and like information required by law, the Executive Director may submit a report to the Chairperson. The Chairperson may decide to issue a Notice of Hearing if he or she is of the opinion that it is in the public interest to hold a hearing to determine whether the rights holder has, in fact, breached the reporting requirements of the Act and Regulations. If the Hearing Panel finds, as the result of a public hearing, that the rights holder has failed to report the required information, the Hearing Panel can order the rights holder to file the required pricing and sales information.

There were no new failure to file hearings as of March 31, 2023.

On May 7, 2020, the Board issued its decision on redetermination on its decision dated December 19, 2016, whereby the Board originally found that Canadian Patent No. 2,478,237 pertains to the patented medicine adapalene sold under the trade name Differin and ordered Galderma to file the required information for the period between January 1, 2010, and March 14, 2016. The Board’s decision on redetermination again ordered Galderma to file the required information for the period between January 1, 2010, and March 14, 2016. On August 11, 2020, Galderma Canada Inc. filed an application for judicial review of the Board’s May 7, 2020, decision on redetermination (T–906–20), which is still pending.

Summary

Excess revenues and potential excess revenues totaling $31,278,774.47 were offset by payments to the Government of Canada through VCUs, settlements, and Board Orders in 2022 and up to May 31, 2023.

Since 1993, 170 VCUs have led to investigation closures. In addition, 31 notices of hearing have been issued, 14 of which were resolved through settlements prior to the hearing on the merits and 17 of which were subject to a full public hearing on the merits (10 related to allegations of excessive pricing and 7 related to allegations of failure to file). These measures resulted in price reductions and the offset of excess revenues or potential excess revenues by additional price reductions and/or payments to the Government of Canada. Over $241 million has been collected through VCUs, settlements, and Board Orders through payments to the Government of Canada.

Matters Before the Federal Court, Federal Court of Appeal, and Supreme Court of Canada or Other Courts

A-237-19: on October 20, 2017, Alexion Pharmaceuticals Inc. filed an application for judicial review of the Board’s decision dated September 20, 2017, in respect of its finding that the patented medicine eculizumab sold under the trade name Soliris was being sold at an excessive price in Canada and ordering Alexion to lower its price (currently stayed) and make an excess revenue payment of $4,245,329.60. The Board’s decision was found to be reasonable by the Federal Court via a decision dated May 23, 2019. Alexion has appealed the Federal Court’s decision in the Federal Court of Appeal. The Federal Court of Appeal heard the appeal of the Board Panel’s decision in October 2020. The Federal Court of Appeal granted Alexion’s appeal on July 29, 2021, and remitted the matter to the Board for redetermination. On June 21, 2022, the matter was settled through a Board order granting a discontinuation of the redetermination and related settlement agreement.

T-906-20: on January 18, 2017, Galderma Canada Inc. filed an application for judicial review of the Board’s decision dated December 19, 2016. In that decision the Board found that Canadian Patent No. 2,478,237 pertains to the patented medicine adapalene sold under the trade name Differin and ordered Galderma to file the required information for the period between January 1, 2010, and March 14, 2016. The Federal Court granted Galderma’s judicial review application on November 9, 2017, and quashed the Board’s decision. On November 21, 2017, the Attorney General appealed the Federal Court’s grant of the judicial review application. On June 28, 2019, the Federal Court of Appeal granted the appeal and issued its decision sending the matter back to the Board for redetermination. The Board’s decision on redetermination, issued on May 7, 2020, again ordered Galderma to file the required information for the period between January 1, 2010, and March 14, 2016. On August 11, 2020, Galderma Canada Inc. filed an application for judicial review of the Board’s May 7, 2020, decision on redetermination (T-906-20). The Board Panel’s redetermination in this matter is under judicial review by the Federal Court.

T-1419-20: on November 23, 2020, Innovative Medicines Canada and 19 individual pharmaceutical companies brought an application in Federal Court for judicial review of the PMPRB’s decision to issue new Guidelines on October 23, 2020 (then slated to come into effect in July 1, 2021). The application sought a declaration that the new Guidelines are ultra vires the Patent Act and an order quashing and setting aside the decision of the PMPRB to issue the new Guidelines. The matter was discontinued in August of 2022.

There are no PMPRB–related matters before the Supreme Court of Canada.

One judgment was rendered on a challenge related to PMPRB legislation that commenced in 2019:

T-1465-19: on September 6, 2019, Innovative Medicines Canada (IMC) and sixteen individual pharmaceutical companies brought an application in Federal Court to judicially review s. 4 (new factors), s. 6 and Schedule (new basket of countries), and ss. 3(4) (new net price calculation) of the 2019 Amendments to the Patented Medicines Regulations on the basis that they were ultra vires the regulation-making power contained in the Patent Act. The Federal Court issued its decision on June 29, 2020, and held that the amendments in s 4, s. 6 and the Schedule are intra vires the Patent Act, but that the amendment in ss. 3(4) is not. On September 10, 2020, IMC and the individual pharmaceutical companies filed a Notice of Appeal (A-215-20) with respect to the Federal Court decision. The Attorney General of Canada also filed a cross-appeal in respect of the invalidated amendments. Judgement on the matter was rendered on December 5, 2022, with the FCA dismissing the appellant’s challenge on the change of the list of comparator countries, and not rendering a decision on additional issues which had been rendered moot.

No. 500-17-109270-192. Merck et al. v Canada (Attorney General): on August 22, 2019, six individual pharmaceutical companies brought an application for judicial review in Quebec Superior Court challenging the constitutionality of ss. 79-103 of the Patent Act. In its decision issued on December 18, 2020, the Quebec Superior Court found the amendments to subsections 4(4)a) and 4(4)b) that would update the net price calculation to require patentees to include discounts and rebates provided to third parties unconstitutional and of no force or effect. The Court found the rest of the Regulations, including the other amendments, and the relevant sections of the Patent Act constitutionally valid. The pharmaceutical company applicants filed a Notice of Appeal with respect to the Superior Court of Quebec’s decision on January 25, 2021, and the Attorney General of Canada also filed a cross-appeal in respect of the invalidated amendments. The Quebec Court of Appeal granted the appeal in part and dismissed the cross-appeal on February 18, 2022.

Table 6.  Status of Board Proceedings in 2022 up to May 31, 2023

Allegations of Excessive Pricing
Medicine Indication/use Rights holder Issuance of notice of hearing Status

Eculizumab (sold under trade name Soliris)

Paroxysmal nocturnal hemoglobinuria

Atypical hemolytic uremic syndrome

Alexion Pharmaceuticals Inc.

January 20, 2015

Board Order: September 27, 2017

Found the price of Soliris was and is excessive under Sections 83 & 85 of the Act.

Payment of excess revenues: $4,245,329.60

* Application for Judicial Review and subsequent appeal: see below.

Matter (redetermination) discontinued on June 21, 2022, following a settlement agreement.

Cysteamine bitartrate (sold under trade name Procysbi)

Nephropathic cystinosis

Horizon Therapeutics Canada

January 14, 2019

Hearing held in 2020-2021.

Decision issued September 1, 2022, found the price of Procysbi was excessive under Sections 83 and 85 of the Act.

Board order: October 13, 2022

Payment of excess revenues: $22,028,977.26

Ceiling price of Procysbi to be reduced to a non-excessive level.

Allegation of Failure to File
Medicine Indication/use Rights holder Issuance of notice of hearing Status

Adapalene (sold under trade names Differin and Differin XP)

Acne

Galderma Canada Inc.

(redetermination)

Board Order: May 7, 2020. Galderma to file the required information for the requested period.

* Application for Judicial Review and prior litigation: see below.

Judicial Review of Board Decisions and Appeals pending as of March 31, 2023
Medicine Indication/use Applicant Issue Date of notice of hearing/status

Adapalene (sold under trade names Differin and Differin XP)

Acne

Galderma Canada Inc.

Failure to file (jurisdiction)

Application for Judicial Review. Court File T-83-17 (Re. Board Panel’s decision of December 19, 2016): Decision issued November 9, 2017, quashing in part Board Panel’s decision.

Notice of Appeal (Federal Court of Appeal) filed on November 21, 2017. Court File A-385-17. Decision issued on June 28, 2019. Matter sent for redetermination by the Board.

Redetermination decision issued on May 7, 2020.

Application for Judicial Review. Court File T-906-20 (Re. Board Panel’s Decision of May 7, 2020) filed on August 11, 2020. Matter pending.

N/A

N/A

Innovative Medicines Canada et al

Vires of new Guidelines issued by the PMPRB in October 2020

Application for Judicial Review. Court File T-1419-20: discontinued in August of 2022.

Key Pharmaceutical Trends: Higher-Cost Medicines Continue to Influence Sales

Pharmaceutical spending is influenced by many factors, including price, utilization, the entry of newer, higher-cost medicines, and the loss of market exclusivity for older patented medicines. In 2022, there was a sizable increase in the volume of patented medicines sold, as well as a moderate rise in the sales of higher-cost medicines, resulting in an overall increase in total spending of 5.7%. Canadian list prices of patented medicines remained among the highest in the Organisation for Economic Co-operation and Development (OECD), ranking second, behind only the US.

The PMPRB is responsible for reporting on trends in pharmaceutical sales and pricing for all medicines, patented and non-patented, and for reporting research and development spending by rights holders.

Under the Regulations, rights holders are required to submit detailed information on their sales of patented medicines, including quantities sold, gross ("list") and net prices, and net revenues. The PMPRB uses this information to analyze trends in the sales, prices,Footnote 5 and use of patented medicines.Footnote 6 This section provides key trends, including analyses of Canadian national, public, and private payer markets for all medicines. Note that any reference to sales in this section should be interpreted as sales revenues unless otherwise noted.

$6.7 billion of Canadian pharmaceutical sales in 2022 were for medicines that previously but no longer report to the PMPRB.

Disclaimers

  1. Although select statistics reported in the KEY PHARMACEUTICAL TRENDS section are based in part on data obtained under license from the MIDAS® database and the Private Pay Direct Drug Plan database proprietary to IQVIA Solutions Canada Inc. and/or its affiliates ("IQVIA"), the statements, findings, conclusions, views, and opinions expressed in this Annual Report are exclusively those of the PMPRB and are not attributable to IQVIA.
  2. To provide a broader perspective on pharmaceutical trends in Canada, summaries of the results of National Prescription Drug Utilization Information System (NPDUIS) analyses have been included as additional "Brief Insights" throughout this section. A variety of public and licensed data sources are used for NPDUIS analytical studies. Many of these sources do not differentiate between patented and non-patented generic medicines; in these instances, the general term "generic" is used to include both. NPDUIS is a research initiative that operates independently of the price review activities of the PMPRB. Analysis produced under the NPDUIS initiative does not contain information that is confidential or privileged under sections 87 and 88 of the Patent Act.

Trends in Sales of Patented Medicines

Canadians spend much more on patented medicines today than they did a decade ago. Over the last five years, sales of these medicines have grown by an average of 1.8% per year, reaching $18.4 billion in 2022. This section looks at the most important factors driving the change in sales revenues from 2021 to 2022 and compares them to trends from previous years.

Trends in Sales Revenues

Figure 3 reports on trends in the sales of patented medicines from 1990 to 2022. Between 2021 and 2022, there was a $956 million (5.7%) increase in the sales of patented medicines. While there has been more than a ten-fold increase in annual sales since 1990, the year-over-year rate of change within that period has varied. This trend is highlighted by the five-year compound annual growth rate given in Figure 3(b), which has ranged between -1.7% and 9.4% since 2013.

Figure 3(a) gives the sales of patented medicines as a share of overall medicine sales. This share reached a peak of 72.7% in 2003 before declining to 60.7% in 2013. In 2022, patented medicines accounted for 49.0% of the sales of all medicines in Canada.

The trends in sales per capita and sales as a percentage of the gross domestic product (GDP) displayed in Figure 3(c) show the ongoing importance of patented medicines in the Canadian economy. Overall, per capita sales of patented medicines rose from $61.60 in 1990 to $465.12 in 2022, while sales as a percentage of GDP rose from 0.25% in 1990 to 0.67% in 2022.

To highlight the continuing impact of patented medicines, Figures 3(a) and 3(b) also provide results for "All PMPRB Medicines". This broader category includes all medicines, current and historic, that ever reported sales to the PMPRB. Historically, medicines have experienced a substantial decrease in market share upon loss of patent protection; however, that same effect has not been observed in a number of the medicines that have stopped reporting to the PMPRB in recent years.

Sales for All PMPRB Medicines rose by 6.8% in 2022, reaching $25.1 billion or 66% of the sales of all medicines in Canada. Medicines that previously reported to the PMPRB accounted for estimated sales of $6.7 billion, or 26.6% of All PMPRB Medicine sales. This is considerably more than a decade ago when medicines that formerly reported to the PMPRB accounted for $1.0 billion, or 6.9% of All PMPRB Medicine sales.

A complete table of the data presented in Figure 3 for patented medicines currently reporting to the PMPRB is included in Appendix 2.

Figure 3. Trends in Patented Medicine Sales, 1990 to 2022

(a) Patented medicine share of all medicine sales: Current PMPRB Medicines and All PMPRB Medicines* figure 3a

Note: To account for revised submissions from rights holders, sales are recalculated for the five years preceding the current Annual Report year. If the data has been revised, the values reported here may differ from those presented in earlier Annual Reports.

* Includes sales of currently patented medicines and medicines that once reported to the PMPRB but are no longer reporting a patent.

Data source: PMPRB; MIDAS® database, 1990–2022, IQVIA (all rights reserved)

Figure description

This line and bar graphic depicts the annual sales of patented medicines currently reporting to the PMPRB and patented medicines that once reported to the PMPRB but are no longer reporting a patent and the patented medicine share of sales for current PMPRB medicines and sales for all PMPRB medicines, for the period from 1990 to 2022.

In 1990, the sales of current PMPRB patented medicines was $1.7 billion and the current PMPRB patented medicine share of all medicine sales was 43.2%;
1991: $2.0 billion, 43.2%;
1992: $2.2 billion, 43.8%;
1993: $2.4 billion, 44.4%;
1994: $2.4 billion, 43.9%;
1995: $2.6 billion, 44.4%;
1996: $3.0 billion, 45.0%;
1997: $3.7 billion, 52.3%;
1998: $4.3 billion, 55.1%;
1999: $5.4 billion, 61.0%;
2000: $6.3 billion, 63.0%;
2001: $7.6 billion, 65.0%;
2002: $8.9 billion, 67.4%;
2003: $9.7 billion, 72.7%;
2004: $10.5 billion, 72.2%;
2005: $10.9 billion, 70.6%.

In 2006, the sales of current PMPRB medicines was $11.7 billion, current PMPRB medicines share of all medicine sales was 67.8%, the sales of all PMPRB medicines was $12.3 billion, and the share of sales for all PMPRB medicines was 69.9%;
2007: $12.1 billion, 63.2%, $12.7 billion, 67.9%;
2008: $12.6 billion, 61.7%, $13.3 billion, 65.5%;
2009: $13.0 billion, 59.6%, $13.7 billion, 63.1%;
2010: $12.4 billion, 55.8%, $13.2 billion, 59.2%;
2011: $12.9 billion, 58.3%, $13.8 billion, 63.6%;
2012: $12.9 billion, 59.2%, $13.8 billion 63.0%;
2013: $13.4 billion, 60.7% $14.4 billion, 64.6%;
2014: $13.8 billion, 59.9%, $15.1 billion, 64.3%;
2015: $15.1 billion, 61.6%, $16.6 billion, 66.9%;
2016: $15.6 billion, 60.8%, $17.3 billion, 66.8%;
2017: $16.8 billion, 61.5%, $18.8 billion, 68.6%;
2018: $16.7 billion, 59.0%, $19.9 billion, 69.8%;
2019: $17.2 billion, 57.5%, $20.8 billion, 69.3%;
2020: $17.7 billion, 55.4%, $22.6 billion, 70.8%;
2021: $17.4 billion, 51.0%, $23.5 billion, 68.3%.
2022: $18.4 billion, 49.0%, $25.1 billion, 66.0%.

 
(b) Rate of change in patented medicine sales: Current PMPRB Medicines and All PMPRB Medicines* figure 3b

Note: As data is updated each year, historical results may not exactly match those reported in previous editions.

* Includes sales of currently patented medicines and medicines that once reported to the PMPRB but are no longer reporting a patent.

Data source: PMPRB; MIDAS® database, 1990–2022, IQVIA (all rights reserved)

Figure description

This line and bar graphic depicts the annual rate of change in patented medicine sales and the 5-year compound annual growth rate from 1990 to 2022 for patented medicines currently reporting to the PMPRB and patented medicines that once reported to the PMPRB but are no longer reporting a patent.

In 1991, the rate of change in sales for Current PMPRB medicines was 13.1%;
1992: 14.0%;
1993: 9.4%;
1994: -2.1%.

In 1995, the rate of change in sales for Current PMPRB medicines was 10.8% and the 5-year compound annual growth rate for sales of Current PMPRB medicines was 8.9%;
1996: 12.8%, 8.4%;
1997: 22.6%, 11.0%;
1998: 18.9%, 12.4%;
1999: 27.0%, 17.6%;
2000: 16.7%, 19.4%;
2001: 18.9%, 20.4%;
2002: 17.5%, 19.2%;
2003: 9.0%, 17.7%;
2004: 7.8%, 14.2%;
2005: 4.2%, 11.6%;
2006: 7.4%, 9.0%.

In 2007, the rate of change in sales for Current PMPRB medicines was 3.2%, the 5-year compound annual growth rate for sales of Current PMPRB medicines was 6.3% and the rate of change in sales for All PMPRB medicines was 3.2%;
2008: 4.6%, 5.4%, 4.8%;
2009: 2.9%, 4.4%, 2.9%;
2010: -4.3%, 2.6%, -3.2%;

In 2011, the rate of change in sales for Current PMPRB medicines was 3.5%, the 5-year compound annual growth rate for sales of Current PMPRB medicines was 2.0%, the rate of change in sales for All PMPRB medicines was 4.5%, and the 5-year compound annual growth rate for sales of All PMPRB medicines was 2.3%;
2012: 0.1%, 1.3%, 0.1%, 1.7%;
2013: 4.2%, 1.2%, 4.6%, 2.0%;
2014: 3.1%, 1.2%, 4.6%, 2.0%;
2015: 9.4%, 4.0%, 9.9%, 4.7%;
2016: 3.3%, 3.9%, 4.2%, 4.6%;
2017: 7.6%, 5.4%, 8.7%, 6.4%;
2018: -0.6%, 4.5%, 6.9%, 6.7%;
2019: 3.5%, 4.5%, 4.5%, 6.6%;
2020: 3.0%, 3.2%, 8.7%, 6.4%;
2021: -1.7%, 2.2%, 4.0%, 6.3%.
2022: 5.7%, 1.8%, 6.8%, 6.0%.

 
(c) Patented medicine sales per capita and as a share of GDP: Current PMPRB Medicines figure 3c

Data source: PMPRB; Statistics Canada; OECD

Figure description

This line graphic depicts Current PMPRB medicine sales per capita and as a share of GDP from 1990 to 2022.

In 1990, Current PMPRB medicine sales per capita was $61.60 and as a share of GDP 0.25%;
1991: $71.40, 0.29%;
1992: $77.70, 0.31%;
1993: $83.90, 0.32%;
1994: $82.80, 0.30%;
1995: $88.70, 0.31%;
1996: $101.40, 0.35%;
1997: $123.70, 0.41%;
1998: $142.90, 0.46%;
1999: $177.60, 0.54%;
2000: $205.90, 0.57%;
2001: $245.20, 0.67%;
2002: $284.30, 0.75%;
2003: $307.00, 0.78%;
2004: $329.20, 0.79%;
2005: $338.50, 0.77%;
2006: $360.00, 0.78%;
2007: $368.90, 0.77%;
2008: $379.50, 0.76%;
2009: $386.90, 0.83%;
2010: $364.70, 0.75%;
2011: $376.10, 0.73%;
2012: $371.80, 0.71%;
2013: $381.80, 0.71%;
2014: $388.70, 0.70%;
2015: $421.80, 0.76%;
2016: $430.94, 0.77%;
2017: $454.09, 0.78%;
2018: $446.30, 0.75%;
2019: $458.60, 0.75%;
2020: $472.00, 0.80%;
2021: $456.14, 0.76%.
2022: $465.12, 0.67%.

 

Brief Insights: Trends in the Sales of Generic Medicines

While sales of patented medicines increased by 5.7% in 2022, retail sales of generic medicines rose by 10.6%, from $5.88 billion in 2021 to $6.50 billion in 2022. This is a notable increase over the generally low or negative rates of change observed since 2010, which were due in large part to the introduction of price-setting policies initiated by individual provincial governments and through the pan-Canadian Pharmaceutical Alliance (pCPA).

In 2018, the introduction of a five-year joint agreement between the pCPA and the Canadian Generic Pharmaceutical Association (CGPA) reduced the prices of 67 generic medicines to 10% or 18% of their reference brand price, driving expenditures down to virtually the same level as in 2010, even as generics continued to grow as a share of units sold in the retail pharmaceutical market (Figure 4).

As the prices of generic medicines begin to stabilize, the return to higher rates of sales growth in 2022 reflects a sustained increase in the use of generics over the previous year.

Figure 4. Generic Share of the Canadian Pharmaceutical Retail Market, 2006 to 2022 figure 4

Note: The results reflect prescription sales in the national retail market based on manufacturer ex-factory list prices.

Data source: MIDAS® database, 2006–2022, IQVIA (all rights reserved)

[NPDUIS Report: Generics360, 2018 – graph updated to include data up to 2022]

Figure description

This line graph gives the generic share of the retail pharmaceutical market in Canada from 2006 to 2022 in terms of spending (sales) and units sold.

  2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Share of units

58.2%

59.5%

62.4%

63.2%

62.4%

64.1%

68.1%

70.7%

72.7%

74.1%

75.2%

75.5%

76.1%

76.6%

77.2%

78.1%

78.6%

Share of sales

21.9%

24.4%

27.0%

29.2%

31.6%

31.1%

32.0%

31.1%

30.2%

28.9%

28.4%

27.3%

24.6%

22.8%

22.4%

22.4%

22.8%

 

Drivers of the Growth in Sales Revenues

The growth in the sales revenues of patented medicines is influenced by changes in several key factors:

  • Volume effect: changes in the quantity or amount of patented medicines sold.
    • This effect focuses on established medicines that were on the market for the period analyzed. Increases in the population, changes in demographic composition (e.g., shifts in the age distribution), increases in the incidence of disease, and changes in prescribing practices are among the factors that may contribute to this effect.
  • Mix effect: shifts in use between lower- and higher-cost patented medicines.
    • This effect applies to both new medicines and those that were already on the market. The switch to new higher-priced medicines, the use of new medicines that treat conditions for which no effective treatment previously existed, and changes in prescribing practices are among the factors that may contribute to this change.
  • Exiting effect: previously patented medicines that have stopped reporting sales revenues to the PMPRB or are no longer sold in Canada.
  • Loss-of-exclusivity effect: medicines that have lost market exclusivity and are open to some level of generic competition but are still patented.
  • Price effect: changes in the prices of existing patented medicines.
    • This effect applies to both increases and decreases in the prices of patented medicines over the time period analyzed.

Some factors, such as the mix effect, will generally put an upward pressure on sales, while others, such as the loss-of-exclusivity effect, have the opposite effect.

Figure 5 summarizes the major factors that drove the year–by–year change in patented medicine salesFootnote 7 between 2017 and 2022 (a) in absolute dollar amounts, and (b) as proportions of the overall annual change in sales.

Figure 5. Key Drivers of Change in the Sales of Patented Medicines, 2017 to 2022

(a) Absolute change ($millions)figure 5a
Figure description

These two bar graphs describe the factors that impacted the annual rates of change in the sales of patented medicines from 2017 to 2022. The first graph gives the rate of change in absolute dollar amounts and the second gives the corresponding percent rate of growth for each contributing factor along with the total push up (positive) and pull down (negative) effects. Direct-acting antiviral (DAA) medicines for hepatitis C are presented separately from the rest of the drug-mix effect because of their high impact.

(a) Absolute change in millions of dollars

  Exiting Loss-of-Exclusivity Mix, Other Drugs Mix, DAAs for hepatitis C Volume Price

2017

-$271

-$150

$1,001

$80

$517

-$26

2018

-$1,833

-$299

$964

$86

$1,107

-$35

2019

-$653

-$313

$1,800

-$177

-$267

$76

2020

-$795

-$191

$1,016

-$297

$468

$38

2021

-$,1541

-$461

$1,786

-$70

-$172

$104

2022

-$450

-$866

$1,751

-$27

$346

$82


Absolute change (millions of dollars) 2017 2018 2019 2020 2021 2022

Total Pull Effects

-$446

-$2,167

-$1,428

-$1,283

-$2,243

-$1,342

Total Push Effects

$1,597

$2,157

$1,876

$1,523

$1,901

$2,180

Net Change

$1,151

-$10

$448

$263

-$342

$838

 
(b) Relative change (%) figure 5b

Note: When multiple factors change simultaneously, they create a residual or cross effect, which is not reported separately in this analysis, but is accounted for in the total cost change.

Values may not add to the net change due to rounding and the cross effect.

As this model uses various measures to isolate the factors contributing to growth, the net change reported here may differ slightly from the reported overall change in the patented medicines market reported in Figure 3(b).

Data source: PMPRB

Figure description

(b) Relative change in percent

  Exiting Loss-of-Exclusivity Mix, Other Drugs Mix, DAAs for hepatitis C Volume Price

2017

-1.7%

-0.9%

6.3%

0.5%

3.3%

-0.2%

2018

-10.9%

-1.8%

5.7%

0.5%

6.6%

-0.2%

2019

-3.9%

-1.9%

10.7%

-1.0%

-1.6%

0.5%

2020

-4.6%

-1.1%

5.9%

-1.7%

2.7%

0.2%

2021

-8.6%

-2.6%

10.0%

-0.4%

-1.0%

0.6%

2022

-2.6%

-5.0%

10.0%

-0.2%

2.0%

0.5%


Relative change (in percent) 2017 2018 2019 2020 2021 2022

Total Pull Effects

-2.8%

-12.9%

-8.5%

-7.4%

-12.6%

-7.8%

Total Push Effects

10.1%

12.8%

11.2%

8.8%

10.7%

12.5%

Net Change

7.3%

-0.1%

2.7%

1.5%

-1.9%

4.7%

 

Changes in the prices of patented medicines have played a minor role in the growth in patented medicine sales over the last several years, suggesting that, on average, the prices of existing patented medicines are fairly stable. However, this does not reflect the overall increases in treatment costs due to the entry of newer, higher-priced patented medicines, the impact of which is captured by the mix effect.

The shift to new higher-cost patented medicines has been a major driver of sales growth in recent years. In 2022, the use of higher-cost patented medicines other than DAAs put an upward pressure on expenditures of $1.8 billion (push effect of 10.0%). While growth was observed in many therapeutic areas, the increase in sales of "antineoplastic and immunomodulating agents" exceeded that of any other class. These medicines, which include oncology treatments, accounted for more than 44% of all patented medicine sales in 2022. Results by therapeutic class are discussed in further detail in the upcoming sections.

Counterbalancing the upward sales pressure from the mix effect, there was a moderate market segment shift as some high-selling medicines stopped reporting their sales to the PMPRB. The loss-of-exclusivity effect accounted for a pull effect of $0.87 billion (-5.0%) on sales in 2022. Figure 6 illustrates the change in the impact of the exiting effect since 2017 and identifies the 10 top-selling medicines that stopped reporting to the PMPRB in 2022.

Figure 6. Pull Effect on Patented Medicine Sales from the Exiting Effect, 2017 to 2022

figure 6

Note: If a medicine stops reporting a patent mid-way through the year, its impact may be reflected in the exiting effect in more than one reporting year.

The amounts reported in any given year may not reflect an entire year’s worth of sales for these medicines.

Data source: PMPRB

Figure description

This bar graph describes the change in patented medicine sales caused by patented medicines no longer reporting patents from 2017 to 2022. An accompanying table gives the change in sales for the top-selling medicines that stopped reporting patents in 2022.

Year Change in sales (millions of dollars)

2017

-$271

2018

-$1,833

2019

-$653

2020

-$795

2021

-$1,541

2022

-$450


Top-selling medicines that stopped reporting to the PMPRB in 2022 Change in sales (millions of dollars)

Breo Ellipta

-$69

Brilinta

-$47

Myozyme

-$41

Somatuline Autogel

-$36

Prolia

-$23

Vaxzevria

-$19

Avamys

-$16

Pentasa

-$15

Pristiq

-$15

Onglyza

-$15

 

Brief Insights: Cost Drivers of Public and Private Drug Plans

Canadian public drug plans and private insurers together account for over three quarters of all prescribed drug spending in Canada.i This includes sales for all products reimbursed by the plan, including but not limited to patented and non-patented brand medicines, patented and non-patented generic medicines, and non-patented single-source medicines.

Drug costs, including markups, represent the largest component of prescription drug expenditures and have the greatest influence on overall trends. Drug costs rose by 8.4% in public plans in 2021/22 and 4.5% in private plans in 2022.

The increasing use of higher-cost medicines, or the drug-mix effect, is the primary cost driver for Canadian public and private drug plans. Over the past several years, higher-cost medicines (other than DAAs for hepatitis C) have exerted a consistent and significant upward pressure on expenditures, accounting for an 8.1% contribution toward drug costs in public plans in 2021–22 and 5.0% toward private plan costs in 2022. Given that the impact of DAA drugs on spending growth is dwindling, having had less than 0.1% pull effects in both public and private drug plans in the past year, the DAA effect is no longer separated out from the drug-mix effect.

The significant downward force exerted by generic pricing policies implemented in 2018, captured under the price change effect, has stabilized and is no longer offsetting the increasing cost pressures from the drug-mix effect. The pull-down effect from substitution became stronger than price effect, lowering drug costs by 1.7% in public plans in 2021–22 and 2.0% of private plans in 2022. Additional savings are expected to be realized from the substitution effect in the coming years as a result of recent biosimilar policy changes in most public drug plans, as well as initiatives introduced by some private payers aimed at promoting switching from biologic originators to available biosimilars. As of March 2023, biosimilar substitution policies have been adopted by public plans in British Columbia, Alberta, Saskatchewan, Ontario, Quebec, New Brunswick, Nova Scotia, Newfoundland and Labrador, the Northwest Territories, and Yukon, and policies are under development for the remaining jurisdictions. With a strong market for biologics in Canada, these efforts may act as a means of offsetting the mounting pressure from higher-cost medicines.

For public plans, a 2.5% demographic push effect from the increased number of active beneficiaries in 2021–22 indicates the gradual returning of these drivers to pre-pandemic levels.

Figure 7. Medicine Cost Drivers
(a) NPDUIS public drug plans*, 2016-17 to 2021–22figure 7
Figure description

These two bar graphs describe the factors that have impacted the annual rates of change in medicine costs for public and private plans. The first graph depicts the total for the combined NPDUIS public drug plans from fiscal year 2016–17 to 2021–22 and the second depicts the Canadian private drug plans from calendar year 2017 to 2022. The total positive or push effects, negative or pull effects, and net change are given above and below the bars for each year. Direct-acting antiviral (DAA) medicines for hepatitis C are presented separately from the rest of the drug-mix effect because of their high impact, but were incorporated into Drug-Mix, Other Drugs for 2021–22 and 2022. The effects of the introduction of the OHIP+ program in Ontario are also shown separately from 2017–18 to 2019–20 in the public plan results and 2018 to 2019 in the private plan results.

(a) NPDUIS public drug plans*, 2016–17 to 2021–22

  2016–17 2017–18 2018–19 2019–20 2020–21 2021–22

OHIP+

1.5%

4.7%

-3.0%

-

-

Drug-Mix, DAAs for Hepatitis C

-2.3%

2.4%

0.6%

-1.6%

-2.1%

-

Drug-Mix, Others

4.4%

4.7%

6.1%

5.8%

6.3%

8.1%

Volume

1.0%

1.0%

-0.3%

1.3%

4.6%

-0.2%

Demographic

1.8%

1.4%

1.0%

3.0%

-2.3%

2.5%

Price Change

-1.0%

-1.1%

-4.0%

-0.5%

0.0%

-0.3%

Substitution

-1.8%

-1.3%

-2.2%

-0.6%

-1.4%

-1.7%

Total pull effects

-5.1%

-2.3%

-6.5%

-5.7%

-5.8%

-2.2%

Total push effects

7.2%

11.0%

12.4%

10.2%

11.0%

10.5%

Net change

2.0%

8.3%

5.8%

4.3%

5.3%

8.4%

 
(b) Private drug plans, 2017 to 2022 figure 7b

Note: Public plans report on a fiscal year basis and private plans report on the calendar year. This has an impact on the magnitude of the effect of policies such as the OHIP+ program or the generic pricing initiative introduced in 2018, for which most of the impact on public plans was felt in the 2018–19 fiscal year.

When multiple factors change simultaneously, they create a residual or cross effect, which is not reported separately in this analysis, but is accounted for in the total cost change.

Values may not add to the net change due to rounding and the cross effect.

* British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, and the Non-Insured Health Benefits (NIHB) Program. Results for 2020–21 onward do not include the NIHB program.

A temporary partial data discontinuity from the private drug plans data supplier in 2021 and 2022 influenced the results for the demographic and volume effects. As such, the next Annual Report may include a revised estimate of these effects for those two years.

Data source: NPDUIS database, Canadian Institute for Health Information; IQVIA Private Pay Direct Drug Plan database

i Canadian Institute for Health Information. 2020. Prescribed Drug Spending in Canada, 2020: A Focus on Public Drug Programs. Ottawa, ON: CIHI. Available: https://www.cihi.ca/sites/default/files/document/prescribed-drug-spending-in-canada-2020-report-en.pdf

[NPDUIS Report: CompassRx 2021/22; NPDUIS Poster: Pressures behind the Rising Costs in Canadian Private Drug Plans, 2018 – graph updated to 2022]

Figure description

(b) Private drug plans, 2016 to 2021

 

2017

2018

2019

2020

2021

2022

OHIP+

-2.8%

2.3%

Drug-Mix, DAAs for Hepatitis C

-0.2%

-0.2%

-0.2%

-0.1%

-0.1%

Drug-Mix, Other Drugs

4.9%

5.2%

5.9%

6.0%

7.1%

5.0%

Volume

0.1%

-0.8%

1.4%

5.6%

-2.8%

0.8%

Demographic

4.0%

3.3%

2.4%

-5.5%

-0.2%

1.8%

Price Change

-0.9%

-2.5%

-1.4%

-0.5%

0.2%

-0.2%

Substitution

-1.2%

-2.3%

-1.0%

-1.0%

-1.0%

-2.0%

Total pull effects

-2.3%

-8.3%

-2.8%

-6.1%

-3.7%

-3.1%

Total push effects

8.8%

8.9%

11.8%

11.5%

7.7%

7.6%

Net change

6.4%

0.6%

9.0%

5.4%

4.0%

4.5%

 

Newer Medicines Driving Sales Revenues

Figure 8 breaks down the 2022 sales of patented medicines according to the year in which the medicine was first issued a Notice of Compliance (NOC) by Health Canada. Throughout the latter part of the 1990s and early 2000s, sales growth was largely driven by a succession of new "blockbuster" medicines that ultimately achieved very high sales volumes. As the patents for these medicines expired, their share of sales gradually decreased. In recent years, the introduction of new higher-cost medicines such as biologics, oncology medicines, and treatments for hepatitis C has accounted for a growing share of sales.

Figure 8. Share of 2022 Sales of Patented Medicines by Date of First Notice of Compliance (NOC) figure 8

Data source: PMPRB

Figure description

This bar graph depicts the share of sales of patented medicines by the year in which the medicine was first issued a NOC by Health Canada and approved for sale in Canada.
Medicines introduced before 2002 comprised 3.5% of 2022 sales;
2002: 0.9%;
2003: 0.4%;
2004: 4.3%;
2005: 1.0%;
2006: 1.4%;
2007: 1.6%;
2008: 4.0%;
2009: 3.8%;
2010: 3.8%;
2011: 2.3%;
2012: 5.4%;
2013: 6.7%;
2014: 8.2%;
2015: 10.6%;
2016: 11.0%;
2017: 7.8%;
2018: 6.9%;
2019: 5.1%;
2020: 7.1%;
2021: 4.1%;
2022: 0.1%

 

Higher-Cost Medicines Driving Sales Revenues

Over the last decade, there has been a notable shift in pharmaceutical development toward more specialized medicines, with an increasing number of higher-cost medicines entering the market and accounting for a substantial share of sales.

Figure 9 details the trend in the treatment costs of patented medicines since 2013. For many years, the majority of the 20 top-selling patented medicines had annual treatment costs under $1,000, but in recent years, costs for the top-sellers have soared into the thousands or tens of thousands of dollars. In 2022, the top 20 medicines, which accounted for 37.7% of patented medicine sales, had a median annual treatment cost of $21,345, more than 25 times the median in 2013.

 
Figure 9. Annual Treatment Costs for the 20 Top-Selling Patented Medicines, 2013 to 2022 figure 9

Data source: PMPRB; IQVIA Private Pay Direct Drug Plan database, 2013–2022

Figure description

This graph depicts the minimum, maximum, median, and weighted average annual treatment costs for the 20 top-selling patented medicines sold in Canada from 2013 to 2022.

Treatment cost 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Maximum

$52,227

$58,800

$58,830

$60,249

$57,928

$60,313

$60,313

$71,055

$508,113

$124,476

Weighted average

$10,156

$12,491

$18,860

$17,770

$16,359

$18,414

$19,266

$25,391

$37,269

$33,205

Median

$803

$828

$4,626

$8,584

$5,728

$5,163

$6,227

$19,420

$42,616

$21,345

Minimum

$181

$136

$254

$260

$260

$291

$287

$322

$656

$656

 
High-cost medicines continue to dominate the pharmaceutical landscape

The 20 top-selling medicines in 2022 had a median annual treatment cost of $21,345, compared to just $803 in 2013.

Figure 10 shows that high-cost medicines represent a growing share of the total sales of patented medicines, rising steeply from 21.8% in 2013 to 57.5% in 2022. This growth was evident in all ranges of annual treatment costs ($10,000 to $20,000; $20,000 to $50,000; $50,000 to $100,000; and $100,000 and over), with medicines in the highest cost band climbing from 0.8% to 7.9% of sales over the same period. Despite the sharp increase in their share of costs, less than 1% of the population use these medicines.

Figure 10. Share of Sales for High-Cost Patented Medicines by Annual Treatment Cost, 2013 to 2022 figure 10

Note: The methodology for this analysis was revised in 2018, and as such, historical results may not match those reported in earlier editions.

* Values may not add to totals due to rounding.

Data source: PMPRB; IQVIA Private Pay Direct Drug Plan database, 2013–2022

Figure description

This bar graph depicts the high-cost medicine share of total patented medicine sales per year by annual treatment cost from 2013 to 2022. The bars are subdivided into four bands based on average annual treatment cost: $10 to $20 thousand; $20 to $50 thousand; $50 to $100 thousand; and greater than $100 thousand.

Year Share of sales for medicines costing $10 to $20 thousand Share of sales for medicines costing $20 to $50 thousand Share of sales for medicines costing $50 to $100 thousand Share of sales for medicines costing greater than $100 thousand Total share of sales of high-cost medicines

2013

9.1%

10.5%

1.4%

0.8%

21.8%

2014

9.8%

11.7%

3.2%

1.0%

25.7%

2015

11.0%

13.4%

7.7%

1.2%

33.3%

2016

12.9%

15.6%

6.9%

1.4%

36.8%

2017

14.4%

20.2%

5.2%

1.5%

41.3%

2018

15.1%

19.4%

5.8%

1.8%

42.1%

2019

17.6%

18.7%

8.6%

3.4%

48.3%

2020

19.2%

18.4%

10.4%

4.1%

52.1%

2021

19.9%

19.8%

12.4%

5.0%

57.1%

2022

17.1%

20.7%

11.8%

7.9%

57.5%

The table below the graph gives additional information including the medicine cost, the number of medicines, the average annual treatment cost, and the estimated treatment population and corresponding share of total Canadian population.

  2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Medicine cost (millions of dollars)

$3,624

$4,284

$5,549

$6,141

$6,864

$6,996

$8,330

$9,124

$9,956

$10,587

Total number of medicines

105

116

129

143

150

162

172

189

201

204

Number of medicines costing $10,000 to $20,000

39

40

42

44

47

49

52

57

60

51

Number of medicines costing $20,000 to $50,000

45

50

58

68

69

73

71

74

74

76

Number of medicines costing $50,000 to $100,000

11

15

17

18

20

24

29

35

38

44

Number of medicines costing more than $100,000

10

11

12

13

14

16

20

23

29

33

Avg. treatment cost (thousands of dollars)

$37.8

$41.4

$44.8

$43.5

$42.7

$45.8

$51.8

$53.9

$59.0

$63.3

Estimated treatment population (thousands)

167.2

186.9

222.4

254.1

284.8

285.8

331.3

349.8

370.3

366.7

Share total Canadian population

0.48%

0.53%

0.62%

0.70%

0.77%

0.78%

0.88%

0.92%

0.97%

0.94%

 

Brief Insights: High-Cost Medicines in Public Drug Plans

High-cost medicines account for 36.8% of all public drug plan expenditures. This is lower than the share for patented medicines reported in Figure 10 because public plan costs also include non-patented generic and non-patented single-source medicines. Public plans reimbursed 144 high-cost medicines in fiscal year 2021–22, while private drug plans reimbursed 264 high-cost medicines in calendar year 2022.

FIGURE 11. Trends in the Number and Share of High-Cost Medicines, NPDUIS Public Drug Plans*, 2016–17 to 2021–22 figure 11

Note: High-cost medicines are defined as having an annual treatment cost greater than $10,000. If medicines reach this threshold in any given year, they are included in the count for all other years. Thus, the number and composition of high-cost medicines in any given year may vary depending on the time of analysis.

The number of oncology medicines and other high-cost medicines covered by public plans may be underestimated, as some are reimbursed through specialized programs, such as cancer care, that are not captured in the data.

Values may not add to totals due to rounding.

* British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, and the Non-Insured Health Benefits (NIHB) Program. Results for 2020–21 do not include the NIHB program.

DAA: Direct-acting antivirals for the treatment for hepatitis C, which were launched in 2014 and 2015. See earlier cost driver analysis (Figure 7) for more information.

2021–22 results included the cost share for >$50K DAA drugs (1.5%).

§ The total number of high-cost medicines reimbursed by the NPDUIS public drug plans is calculated using prescription drug utilization data, which includes claims for all medicines funded by public plans, and does not necessarily reflect the number of medicines listed on the formularies for these plans.

Data source: NPDUIS database, Canadian Institute for Health Information (fiscal year data)

[NPDUIS Report: CompassRx 2021/22 (pre-publication results)]

Figure description

This stacked bar graph depicts the high-cost medicine share of total medicine costs for the NPDUIS public drug plans from fiscal year 2016–17 to 2021–22. The bars are subdivided into bands based on average annual costs per active beneficiary: $10 to $20 thousand; $20 to $50 thousand; and more than $50 thousand. The share of new direct-acting antiviral (DAA) medicines for hepatitis C is reported separately, but was incorporated into the $50K+ Other drugs category for 2021–22. An accompanying table gives the total number of high-cost medicines, the share of beneficiaries using these medicines, and the share of prescriptions they represent.

  2016–17 2017–18 2018–19 2019–20 2020–21 2021–22

Medicine cost in millions of dollars

$2,347.4

$2,829.0

$3,288.3

$3,426.0

$3,483.9

$4,009.1

Total number of medicines

103

107

121

130

135

144

Average cost per active beneficiary of $10,000‒$20,000: share of total medicine cost

9.8%

10.3%

11.6%

12.2%

13.2%

14.8%

Average cost per active beneficiary of $20,000‒$50,000: share of total medicine cost

9.4%

9.5%

10.3%

11.8%

12.5%

12.2%

Average cost per active beneficiary of greater than $50,000: share of total medicine cost for medicines other than DAAs for hepatitis C

3.6%

4.1%

4.9%

5.8%

7.2%

9.9%

Average cost per active beneficiary of greater than $50,000: share of total medicine cost for DAAs

5.2%

7.2%

7.2%

4.2%

1.8%

High-cost medicines - share of active beneficiaries

1.73%

1.75%

1.72%

2.12%

2.51%

2.98%

High-cost medicines - share of total prescriptions

0.30%

0.34%

0.38%

0.40%

0.42%

0.49%

 

The shift toward higher-cost treatments is especially evident in oncology medicines. Figure 12 shows the share of total sales for patented oncology medicines by treatment cost based on a standard 28-day treatment regimen.Footnote 8

The number of patented oncology medicines with 28-day treatment costs over $7,500 rose from 15 to 68 between 2013 and 2022, now accounting for 17.3% of total patented medicine sales.

As a result, the average treatment cost for oncology medicines in 2022 was $14,024, compared to $5,564 in 2013.

Many treatment regimens use multiple medicines resulting in even higher treatment costs per beneficiary. The dual pressures of increasing average treatment costs and growing utilization mean that this therapeutic area is likely to continue to grow as a proportion of patented medicine sales.

Figure 12. Share of Sales for Patented Oncology Medicines by 28-day Treatment Cost, 2013 to 2022 figure 12

Note: The methodology for this analysis was revised in 2018 and 2019, and as such, historical results may not match those reported in earlier editions. These results reflect the total sales for patented medicines used in the treatment of cancer. While some of these medicines may also be used to treat other conditions, the data used for this analysis does not distinguish between indications, and thus, the reported sales may reflect some non-cancer use.

* Treatment costs for these medicines are not available.

Values may not add to totals due to rounding.

Data source: PMPRB; CADTH pCODR

Figure description

This bar graph depicts the patented oncology medicine share of total patented medicine sales from 2013 to 2022. The bars are subdivided into six bands based on the average 28-day treatment cost: medicines whose costs are not available; medicines costing less than $2.5 thousand; $2.5 to $5.0 thousand; $5.0 to $7.5 thousand; $7.5 to $10.0 thousand; and more than $10.0 thousand.

Year Share of sales for patented oncology medicines for which treatment cost is unavailable Share of sales for patented oncology medicines for which treatment cost is less than $2,500 Share of sales for patented oncology medicines for which treatment cost is $2,500 to $5,000 Share of sales for patented oncology medicines for which treatment cost is $5,000 to $7,500 Share of sales for patented oncology medicines for which treatment cost is $7,500 to $10,000 Share of sales for patented oncology medicines for which treatment cost is more than $10,000 Total share of sales for patented oncology medicines

2013

0.8%

1.0%

4.1%

0.9%

0.9%

1.3%

9.0%

2014

0.7%

1.0%

4.3%

1.1%

1.3%

1.7%

10.1%

2015

0.7%

1.0%

4.8%

0.9%

2.0%

2.1%

11.5%

2016

0.7%

0.5%

5.1%

0.9%

2.8%

2.4%

12.4%

2017

0.8%

0.4%

5.1%

1.0%

3.5%

3.2%

14.0%

2018

0.9%

0.4%

4.9%

1.7%

4.9%

4.8%

17.6%

2019

0.8%

0.3%

5.5%

2.0%

5.4%

6.9%

20.9%

2020

0.5%

0.1%

4.8%

2.3%

6.4%

8.5%

22.6%

2021

0.3%

0.1%

3.7%

3.0%

7.1%

9.7%

23.9%

2022

0.3%

0.1%

4.2%

2.9%

7.5%

9.8%

24.8%

The table below the graph gives additional information including the medicine cost, the number of medicines, the average 28-day treatment cost, and the estimated treatment population and corresponding share of total Canadian population.

Oncology medicines 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cost (millions of dollars)

$1,520

$1,678

$1,898

$2,050

$2,324

$2,939

$3,584

$3,947

$4,172

$4,559

Total number of medicines

60

69

72

77

80

91

94

105

113

117

Number of medicines for which cost is unavailable

9

11

10

10

10

10

9

16

7

5

Number of medicines costing less than $2,500

13

12

12

10

10

8

7

6

7

6

Number of medicines costing $2,500 to $5,000

15

16

17

17

17

18

18

19

21

20

Number of medicines costing $5,000 to $7,500

8

12

12

14

13

15

16

16

20

18

Number of medicines costing $7,500 to $10,000

7

9

10

13

15

19

21

22

25

24

Number of medicines costing more than $10,000

8

9

11

13

15

21

23

26

33

44

Average 28-day treatment cost

$5,564

$6,210

$6,656

$6,699

$7,039

$7,680

$9,320

$13,304

$13,478

$14,024

Estimated treatment population (thousands)

589.0

607.6

600.1

464.9

468.6

512.5

567.1

562.8

561.6

638.4

Share total Canadian population

1.68%

1.71%

1.68%

1.28%

1.27%

1.37%

1.51%

1.48%

1.47%

1.61%

 

BRIEF INSIGHTS: SPENDING ON EXPENSIVE DRUGS FOR RARE DISEASES

Expensive drugs for rare diseases (EDRDs) represent an increasing share of the Canadian pharmaceutical market, due to sales growth of existing medicines as well as the rapid pace of new launches, with at least 10 new EDRDs gaining approval in each year since 2015. Compound annual growth in EDRD sales over the past decade has been higher than the total pharmaceutical market, such that EDRD made up 13.4% of sales in 2022. Two thirds of EDRDs spending in 2022 was for oncology medicines.

Using NPDUIS drug plan data, it is estimated that 0.2% of public drug plans patients were reimbursed for an EDRD‐related claim in 2022. These claims accounted for 6.8% of the total drug costs within public drug plans. This percentage does not include the use of oncology EDRDs in plans with alternative cancer coverage or EDRDs administered in hospitals, which are not recorded in the database, and may count some patients who received an orphan-designated medicine for one of its non-orphan indications.

Figure 13. EDRD Share of the Pharmaceutical Market in Canada, Oncology and Non-Oncology, 2013 to 2022 figure 12

Note: The data for this analysis was updated and, as such, historical results may not match those reported in previous editions.

For this analysis, EDRDs are defined as medicines with at least one orphan designation (by the US Food and Drug Administration or the European Medicines Agency) and estimated treatment costs exceeding $100,000 per year for non-oncology drugs or $7,500 per 28 days for oncology drugs.

* Compound annual growth rate (CAGR) of expenditures over the study period

Data source: PMPRB; MIDAS® database, 2013–2022, IQVIA (all rights reserved)

[NPDUIS Chartbook: Expensive Drugs for Rare Diseases: Canadian Trends and International Comparisons, 2011–2020 – content updated for 2022]

Figure description

This stacked bar graph depicts the market shares held by oncology and non-oncology expensive drugs for rare diseases in Canada from 2013 to 2022. The compound annual growth rate for all Canadian pharmaceutical sales over that period was 7.0%; for expensive drugs for rare diseases, this growth rate was 31.0%. A table below the graph gives the cumulative number of EDRDs approved as well as the Canadian EDRD sales per capita for each year.

Share of Canadian pharmaceutical sales 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Oncology EDRDs

1.7%

1.9%

2.3%

2.9%

4.0%

5.4%

7.0%

8.2%

9.0%

8.8%

Non-oncology EDRDs

0.5%

0.8%

1.1%

1.3%

1.5%

1.7%

2.3%

2.6%

3.1%

4.6%

Total EDRDs

2.2%

2.7%

3.4%

4.2%

5.5%

7.1%

9.3%

10.8%

12.1%

13.4%

Cumulative number of EDRDs approved

31

37

48

63

73

84

98

114

125

139

EDRD sales per capita

$12

$16

$21

$27

$37

$50

$70

$87

$105

$124

 

Top Therapeutic Classes Driving Sales Revenues

"Antineoplastics and immunomodulating agents", "alimentary tract and metabolism", and "general antiinfectives for systemic use and antiparasitic products" were the three top-selling therapeutic classes in 2022, accounting for close to two thirds of all patented medicine sales. The "antineoplastics and immunomodulating agents" class experienced a 3.3% increase in sales between 2021 and 2022 while "systemic hormonal preparations" had the greatest year–over-year decrease at -55.8%.

Figure 14 breaks down the sales of patented medicines in Canada by therapeutic class using level 1 of the World Health Organization’s (WHO) Anatomical Therapeutic Chemical (ATC) system.Footnote 9 It compares the distribution of sales by therapeutic class in 2013 and 2022 and provides the rates of growth in sales for each class from 2021 to 2022.

The "antineoplastics and immunomodulating agents' class accounted for a much larger share of sales in 2022 (44.0%) than in 2013 (28.9%), as more oncology medicines entered the market over the past decade, many of which were high cost. By contrast, the share of sales held by "cardiovascular system" medicines decreased from 7.5% to 2.0% over the same period, continuing the trend observed in previous years.

Figure 14. Sales of Patented Medicines by Major Therapeutic Class, 2022 figure 14

* Medicines that stop reporting their sales to the PMPRB can factor into growth rates for the relevant therapeutic areas. Please refer to Figures 5 and 6 for a discussion on medicines that exited the patented market in 2022.

These groups have been combined for reasons of confidentiality.

Values may not add to totals due to rounding.

Data source: PMPRB

Figure description

These two pie charts depict the sales of patented medicines as a percentage of all medicine sales by therapeutic class in 2022 and 2013.

Therapeutic class 2022 Share of sales (%) 2013 Share of sales (%)

L: Antineoplastics and immunomodulating agents

44.0

28.9

A: Alimentary tract and metabolism

11.5

10.4

J: General antiinfectives for systemic use and P: Antiparasitic products

9.8

11.1

N: Nervous system

7.2

13.6

B: Blood and blood forming organs

7.1

5.7

R: Respiratory system

5.9

9.3

S: Sensory organs

5.1

4.7

M: Musculo-skeletal system

3.7

3.2

C: Cardiovascular system

2.0

7.5

D: Dermatologicals

1.6

1.0

G: Genito-urinary system and sex hormones

1.3

3.7

V: Various

0.4

0.5

H: Systemic hormonal preparations

0.3

0.5

The accompanying table gives the 2022 total sales by therapeutic class, the growth in sales (millions of dollars) and the growth rate (percent) from 2021 to 2022, and the 2022 share of sales.

Therapeutic class 2022 sales (millions of dollars) Growth: 2022/2021 in millions of dollars
(rate in percentages)
2022 share of sales (%)

L: Antineoplastics and immunomodulating agents

$8,104.2

$257.2 (3.3%)

44.0%

A: Alimentary tract and metabolism

$2,112.6

$11.3 (0.5%)

11.5%

J: General antiinfectives for systemic use and P: Antiparasitic products

$1,798.7

$197.9 (12.4%)

9.8%

N: Nervous system

$1,321.8

$164.0 (14.3%)

7.2%

B: Blood and blood forming organs

$1,298.2

-$22.8 (-1.7%)

7.1%

R: Respiratory system

$1,092.5

$380.3 (53.4%)

5.9%

S: Sensory organs

$944.2

$63.3 (7.2%)

5.1%

M: Musculo-skeletal system

$686.3

$21.8 (3.3%)

3.7%

C: Cardiovascular system

$370.2

-$4.2 (-1.1%)

2.0%

D: Dermatologicals

$294.6

-$16.7 (-5.4%)

1.6%

G: Genito-urinary system and sex hormones

$246.2

-$10.8 (-4.2%)

1.3%

V: Various

$74.2

-$9.5 (-11.3%)

0.4%

H: Systemic hormonal preparations

$59.5

-$75.0 (-55.8%)

0.3%

All therapeutic classes

$18,403.0

$957.7

100%

 

Biologic Medicines

Biologic medicines, many of which are in the high-cost category, capture a substantial share of the Canadian market. These medicines accounted for 46% of patented medicine sales in 2022, with the top three biologics alone representing more than 20% of sales. Figure 15 breaks down the annual share of sales for biologic patented medicines by major therapeutic class.

Although the share of biologic medicine sales has increased in many therapeutic classes, "immunomodulating agents other than oncology" had the highest uptake over the study period. Oncology medicines also represent a steadily growing share of the biologics market, increasing from 3% of patented medicine sales in 2013 to 12% in 2022.

Figure 15. Biologic Medicine Share of Patented Medicine Sales by Therapeutic Class*, 2013 to 2022 figure 15

Note: Values may not add to totals due to rounding.

* Level 1 of Anatomical Therapeutic Chemical (ATC) classification system maintained by the World Health Organization.

Data source: PMPRB

Figure description

This bar graph depicts the biologic medicine share of total patented medicine sales by therapeutic class from 2013 to 2022. Each bar is subdivided into the therapeutic class bands: Other; Alimentary tract and metabolism; Sensory organs; Antiinfectives for systemic use; Immunomodulating agents other than oncology; and Oncology. The total sales in billions of dollars are given for each year.

Therapeutic Class 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Other

5%

5%

5%

6%

6%

7%

7%

8%

10%

9%

A: Alimentary tract and metabolism

4%

4%

3%

4%

4%

4%

4%

3%

3%

2%

S: Sensory organs

3%

3%

4%

4%

4%

4%

3%

3%

3%

4%

J: Antiinfectives for systemic use

4%

3%

4%

4%

4%

4%

3%

3%

3%

3%

L: Immunomodulating agents – other than Oncology

13%

14%

15%

17%

17%

13%

15%

16%

17%

16%

L: Oncology

3%

4%

5%

5%

6%

7%

9%

10%

10%

12%

Total biologic share of patented medicine sales

31%

33%

35%

39%

42%

39%

41%

43%

46%

46%

Total biologic sales (billions of dollars)

$5.1

$5.5

$5.9

$6.5

$7.0

$6.5

$7.1

$7.5

$7.9

$8.5

 

Brief Insights: Biosimilar Uptake

Given the high use and cost of biologics in Canada, biosimilars offer an opportunity for significant cost savings, with list price discounts ranging from 25% to 50% off the reference biologic.i However, biosimilar substitution has more complexities than traditional generics as they are not considered identical to their originator medicines, but rather highly similar versions, and Health Canada’s authorization of a biosimilar is not a declaration of equivalence to the originator biologic.

Recently, an increasing number of Canadian payers have undertaken initiatives to encourage switching from biologics to biosimilars with an aim of increasing biosimilar uptake. Results for the biosimilars targeted by these initiatives in 2022 show positive signs in terms of increased utilization. In British Columbia, the first Canadian province to implement a biosimilar switching initiative, biosimilars now account for 90% of the infliximab market, contributing to the increase in uptake observed nationally in recent years.

Biosimilars accounted for 45% of the total Canadian infliximab market in Q4-2022, compared to only 8% in Q4-2018, while shares in the etanercept and insulin glargine markets have increased to 53% and 40%, respectively (Figure 16). The recent market entry of biosimilars for adalimumab and rituximab have achieved sizable uptake for these two markets, reaching 55% and 47% of units sold by the last quarter of 2022, respectively.

While these results demonstrate growing use of biosimilars, biosimilar uptake in Canada is moderate compared to international markets, particularly for high-selling products. Canada’s 45% biosimilar share of infliximab in 2022 was well below the OECD and PMPRB11 medians, at 82% and 85% respectively (Figure 17).

Figure 16. Biosimilar Share of Units by Medicine, Canada, the OECD, and the PMPRB11, Q4–2022 figure 16

Note: The 2022 update uses PMPRB11 comparator countries in place of PMPRB7.

* Generally used to treat acute conditions.

Canada is excluded from the median OECD value.

Mainly used for treatment of oncology indications and administrated in hospitals in Canada.

Data source: MIDAS® database, prescription retail and hospital markets, 2022, IQVIA (all rights reserved)

Figure description

This bar graph reports the biosimilar uptake, in share of units, for Canada, the PMPRB11, and the Organisation for Economic Co-operation and Development as of the fourth quarter of 2022. The graph compares the uptake for biologic medicines with biosimilar availability in Canada. Total 2022 Canadian sales for each medicine are also given, in millions of dollars.

Biologic medicine Sales in Canada, 2022, in millions of dollars Biosimilar uptake, Q4-2022, share of units
Median OECD Median PMPRB11 Canada

Infliximab

$1,227

82%

85%

45%

Adalimumab

$875

46%

71%

55%

Etanercept

$240

37%

63%

53%

Rituximab

$217

75%

78%

47%

Insulin glargine

$208

16%

23%

40%

Trastuzumab

$118

45%

66%

90%

Epoetin alfa*

$116

77%

67%

Pegfilgrastim*

$106

85%

86%

99%

Bevacizumab

$97

87%

92%

93%

Insulin aspart

$92

4%

3%

24%

Filgrastim*

$90

96%

96%

91%

Insulin lispro

$80

19%

11%

28%

Enoxaparin

$54

53%

42%

55%

Somatropin

$45

21%

26%

21%

Follitropin alfa*

$23

41%

50%

Teriparatide

$9

71%

74%

41%

 
Figure 17. Uptake of Infliximab Biosimilars by Share of Units, OECD, Q4-2022 figure 17

Note: Countries with limited data were excluded from the analysis. The 2022 update highlights PMRPB11 countries instead of PMPRB7.

Data source: MIDAS® database, prescription retail and hospital markets, Q4-2022, IQVIA (all rights reserved)

[NPDUIS Chartbook: Biologics in Canada. Part 1: Market Trends, 2018 – graphs updated for 2022]

Figure description

This bar graph gives the uptake for infliximab biosimilars for each country in the Organisation for Economic Co-operation and Development as a share of all infliximab units sold in the fourth quarter of 2022. Countries with limited sales data were excluded from this analysis. The median for all countries listed was 82%.

Country Share of units

Hungary

100%

Poland

100%

Norway

99%

Finland

98%

United Kingdom

97%

Italy

96%

Sweden

94%

Austria

94%

Portugal

93%

France

85%

Spain

84%

Germany

84%

Czech Republic

81%

Ireland

80%

Slovenia

76%

Australia

59%

Belgium

59%

Turkey

51%

United States

50%

South Korea

45%

Canada

45%

Slovakia

42%

Switzerland

38%

Mexico

30%

Japan

27%

 

i PMPRB. 2021. Poster: Biosimilars in Canada: building momentum in the wake of recent switching policies. Presented at CADTH Symposium; November 2021. Available: /content/canadasite/en/patented-medicine-prices-review/services/npduis/analytical-studies/slide-presentations/biosimilars-cadth-2021.html

Oncology Medicines

Figure 18 illustrates the growth in the sales of patented oncology medicines since 2013. In 2022, oncology medicines accounted for 24.8% of total patented medicine sales, close to triple the 2013 share of 9.1%.

Oral forms of cancer treatment are a noteworthy emerging segment, representing more than half of all oncology medicine sales and 12.9% of the patented medicine market in 2022, compared to just 3.6% in 2013.Footnote 10

Figure 18. Oncology Medicine Share of Patented Medicine Sales by Formulation, 2013 to 2022 figure 18

Note: These results reflect the total sales for patented medicines used in the treatment of cancer. While some of these medicines may also be used to treat other conditions, the data used for this analysis does not distinguish between indications, and thus, the reported sales may reflect some non-oncology use.

Values may not add to totals due to rounding.

Data source: PMPRB

Figure description

This stacked bar graph depicts the oncology medicine share of patented medicine sales from 2013 to 2022. Each bar is subdivided into non-oral and oral formulations. The combined total oncology share of patented medicine sales is indicated as well as the net sales in billions of dollars.

  2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Non-oral medicines

5.6%

6.2%

6.7%

6.5%

6.9%

8.4%

10.3%

10.3%

10.3%

11.9%

Oral medicines

3.6%

3.9%

4.8%

5.9%

7.1%

9.2%

10.6%

12.3%

13.6%

12.9%

Total oncology share

9.1%

10.1%

11.5%

12.4%

14.0%

17.6%

20.9%

22.6%

23.9%

24.8%

Sales (billions of dollars)

$1.5

$1.7

$1.9

$2.1

$2.3

$2.9

$3.6

$3.9

$4.2

$4.6

 

Price Trends

The PMPRB uses the Patented Medicines Price Index (PMPI) to monitor trends in the prices of patented medicines. The PMPI measures the average year-over-year change in the ex-factory prices of patented medicines sold in Canada using a sales-weighted average of price changes at the level of individual medicines.Footnote 11 This is similar to the approach Statistics Canada uses to construct the Consumer Price Index (CPI). The PMPI is based on an average transaction price and sales information submitted by rights holders for a six-month period.

The PMPI only measures the sales growth attributable to changes in the prices of patented medicines. It does not measure changes in the use of patented medicines; this is measured by the quantity index or PMQI (see "Utilization of Patented Medicines"). Nor does it measure the cost impact of changes in prescribing patterns or the introduction of new medicines.

The Patent Act requires the PMPRB to consider changes in the CPI, among other factors, in determining whether the price of a patented medicine is excessive. Figure 19 compares year-over-year changes in the PMPI to corresponding changes in the CPI from 2003 to 2022.

The PMPI is reported based on two measures: the national average transaction price, which is a net price; and the national list price, which is a gross price.Footnote 12 Both measures are reported to the PMPRB by rights holders. General price inflation, as measured by the CPI, has exceeded the average increase in the prices of patented medicines almost every year since 2003. In 2022, the CPI rose by 6.8%, while the national average transaction price and the national list price PMPIs increased by 0.8% and 0.9%, respectively.

Figure 19. Annual Rate of Change, Patented Medicines Price Index (PMPI) and Consumer Price Index (CPI), 2003 to 2022 figure 19

Note: To account for revised submissions from rights holders, price and quantity indices are recalculated for the five years preceding the current Annual Report year. If the data has been revised, the values reported here may differ from those presented in earlier Annual Reports.

Data source: PMPRB; Statistics Canada

Figure description

This line graph depicts the year-over-year percent changes in the PMPI and CPI for the years 2003 to 2022. The PMPI is represented by two lines, one based on the national average transaction price and one based on the national list price.

  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CPI change

2.8%

1.8%

2.2%

2.0%

2.2%

2.3%

0.3%

1.8%

2.9%

1.5%

0.9%

2.0%

1.1%

1.4%

1.6%

2.3%

1.9%

0.7%

3.4%

6.8%

PMPI change (National List Price)

0.6%

1.0%

1.2%

0.1%

1.4%

2.9%

1.3%

2.4%

1.4%

1.2%

1.4%

0.8%

0.2%

0.3%

0.8%

0.1%

1.3%

1.6%

0.5%

0.9%

PMPI change (National Average Transaction Price)

0.1%

0.7%

0.5%

-0.2%

0.0%

-0.1%

0.2%

-0.5%

-0.1%

0.3%

-0.1%

0.0%

0.0%

-0.6%

-0.2%

-0.3%

1.0%

0.6%

0.4%

0.8%

 

Price Behaviour After Introduction

Do the average prices of patented medicines change much in the years after entry into the Canadian market? To answer this question, Figure 20 provides the average ratio of the 2022 average transaction price to the introductory price (the price at which the medicine was sold in its first year on the Canadian market) for medicines that entered the market each year since 2002.

The results suggest that over the last two decades, average transaction prices of patented medicines have remained relatively stable, with 2022 prices being on average 4% higher than the introductory price.Footnote 13 The average ratios for medicines introduced since 2002 ranged between 12% lower and 6% higher than their introductory prices depending on the introductory year.

A parallel analysis using list prices is available in Appendix 3.

Figure 20. Average Ratio of 2022 Price to Introductory Price, by Year of Introduction figure 20

Note: This analysis is based on average transaction prices. For an alternative version based on list prices, see Appendix 3.

Data source: PMPRB

Figure description

This bar graph depicts the average ratio of the 2022 average transaction price (ATP) price of a typical patented medicine to the introductory price (the ATP price at which the medicine was sold in its first year on the Canadian market) for medicines introduced between 2002 and 2021. A line at 1.00 indicates the 2022 price.

For the currently patented medicines that were introduced in 2002, the average ratio of the 2022 price to the introductory price is 1.06;
2003: 0.88;
2004: 1.01;
2005: 1.00;
2006: 1.02;
2007: 1.03;
2008: 0.90;
2009: 0.96;
2010: 0.96;
2011: 1.01;
2012: 0.92;
2013: 0.95;
2014: 1.04;
2015: 0.99;
2016: 0.91;
2017: 1.00;
2018: 0.95;
2019: 0.91;
2020: 1.00;
2021: 1.04.

 

Price Change by Country

In 2022, in accordance with the Act and the Regulations, rights holders reported publicly available prices of patented medicines for 11 comparator countries (PMPRB11): Australia, Belgium, France, Germany, Italy, Japan, Spain, Sweden, Norway, the Netherlands, and the United Kingdom (UK).

The PMPRB uses this information to

  • conduct international price comparison tests; and
  • compare the Canadian prices of patented medicines to those prevailing in other countries.

Figure 21 gives the average annual rates of price change for Canada and each of the PMPRB11 countries. These results were obtained by applying the PMPI methodology (with weights based on Canadian sales patterns) to the international price data that rights holders submitted to the PMPRB.

In 2022, Canadian average transaction prices saw a slight increase of 0.8%, while prices in the Netherlands, Italy, and the UK remained relatively steady. All other PMPRB11 countries saw average price decreases, most notably in Belgium (-4.6%) and Japan (-3.9%). These results are consistent with a long–term tendency for patented medicine prices to slowly fall over time in most comparator countries.

The foreign market results are based on publicly available gross prices, namely ex-factory price information (generally for the retail customer class) submitted by rights holders to the PMPRB. The Canadian rate of change, however, is based on net prices, namely actual average transaction prices net of rebates and discounts provided by manufacturers to their direct customers. To account for this difference, a rate of change for Canadian list prices is also provided as a point of comparison. In 2022, list prices in Canada increased by 0.9%.

Figure 21. Annual Average Rates of Price Change, Canada and the PMPRB11, 2022 figure 21

Note: Prices for Australia, Belgium, Japan, Spain, Norway, and the Netherlands were sourced from the IQVIA MIDAS® database.

Data source: PMPRB; MIDAS® database, 2022, IQVIA (all rights reserved)

Figure description

This bar graph depicts the average annual rates of price change for Canada and each of the PMPRB11 comparator countries for 2022. Both the average transaction price and the list price rate are shown for Canada.

Country Annual average rate of price change for 2022

Canada (average transaction price)

0.8%

Canada (list price)

0.9%

Australia

-1.5%

Belgium

-4.6%

France

-1.7%

Germany

-1.6%

Italy

0.0%

Japan

-3.9%

Netherlands

0.2%

Norway

-0.3%

Spain

-1.8%

Sweden

-1.3%

United Kingdom

0.0%

 

Comparison of Canadian Prices to Foreign Prices

Tables 7 and 8 provide detailed statistics comparing the foreign prices of patented medicines to their Canadian prices. Each table provides two sets of average price ratios. These are differentiated according to the method by which foreign prices were converted to their Canadian dollar equivalents. The tables also give the numbers of strengths and dosage forms of medicines (DINs) and the volume of sales encompassed by each reported price ratio.Footnote 14

The average price ratios given in Tables 7 and 8 are sales-weighted arithmetic means of price ratios obtained for individual DINs, with weights based on Canadian sales patterns. Average price ratios constructed in this way provide answers to questions such as:

How much more/less would Canadians have paid for the patented medicines they purchased in 2022 had they paid Country X prices rather than Canadian prices?

For example, Table 7 states that the 2022 average France-to-Canada price ratio for medicines available in both countries was 0.75. This means Canadians would have paid 25% less for the patented medicines they purchased in 2022 if they had paid French prices.

For many years, the PMPRB has reported average foreign–to–Canadian price ratios with foreign prices converted to their Canadian dollar equivalents by means of market exchange rates (more exactly, the 36-month moving averages of market rates the PMPRB normally uses in applying its Guidelines). Tables 7 and 8 also report foreign–to–Canadian price ratios with currency conversion at purchasing power parity (PPP). The PPP between any two countries measures their relative costs of living expressed in units of their own currencies. In practice, cost of living is determined by pricing out a standard basket of goods and services at the prices prevailing in each country.

Because PPPs are designed to represent relative costs of living, they offer a simple way to account for differences in overall national price levels when comparing individual prices, incomes, and other monetary values across countries. When applied to the calculation of average foreign–to–Canadian price ratios, they produce statistics answering questions such as:

How much more/less consumption of other goods and services would Canadians have sacrificed for the patented medicines they purchased in 2022 had they lived in Country X?

Questions such as this cannot be answered by simply comparing the prices of medicines. Rather, one must first calculate what each price represents in terms of goods and services foregone. PPPs are designed for such purposes.

Bilateral Price Comparisons

Table 8 provides bilateral comparisons of list prices in each of the PMPRB11 countries to average transaction prices in Canada. Focusing on the results with currency conversion at market exchange rates, it appears that, as in previous years, Canadian prices were typically within the range of prices observed in comparator countries. Prices reported for Australia, Belgium, France, Sweden, Norway, the Netherlands, and Italy were lower than Canadian prices, while prices in Germany were on par with Canada. Three countries—Japan, Spain, and the UK—continued to report prices that were higher than Canada. Year-to-year changes in these ratios may be influenced by variations in international exchange rates.

It is important to note that it is not always possible to find a matching foreign price for every strength and dosage form of a patented medicine sold in Canada. Table 7 indicates how often an international price comparison was available for each of the comparator countries. For example, of the 1,112 DINs that reported a patent to the PMPRB in 2022 and had Canadian sales available at the time of analysis, 48% had a publicly available ex-factory price for France while 74% had a price for Germany. In this case, it is considered to constitute the international median price, as per the PMPRB’s methodology.

When international differences in the cost of living are considered (using PPP), the average price ratios indicate that Canadians incurred a larger consumption cost for the patented medicines they purchased in 2022 than residents of Australia, France, Sweden, and Norway.

This analysis uses average transaction prices for the Canadian market. A parallel analysis using Canadian list prices is available in Appendix 3.

Table 7. Average Foreign–to–Canadian Price Ratios, Bilateral Comparisons, Canada and the PMPRB11, 2022

  Canada Australia Belgium France Germany Italy Japan Netherlands Norway Spain Sweden United Kingdom

At market exchange rates

Average price ratio 2022

1.00

0.76

0.88

0.75

1.00

0.99

1.11

0.99

0.91

1.01

0.86

1.03

Average price ratio 2021

1.00

0.71

0.88

0.74

1.00

0.98

0.90

0.77

0.88

0.96

0.88

1.00

At purchasing power parities

Average price ratio 2022

1.00

0.71

1.06

0.93

1.18

1.36

1.30

1.10

0.76

1.40

0.88

1.16

Average price ratio 2021

1.00

0.67

1.03

0.90

1.19

1.33

0.98

0.86

0.82

1.32

0.90

1.14

Number of patented medicines compared 2022 (DINs)

1,112*

522

620

532

818

690

481

775

779

725

630

783

Sales ($millions)

$18,403.2

$14,333.6

$14,419.9

$11,827.3

$15,769.2

$14,830.9

$12,363.4

$15,672.8

$15,724.0

$14,731.0

$12,110.4

$15,587.5

Note: 2021 prices for Australia, Belgium, Japan, Spain, Norway, and the Netherlands were sourced from IQVIA’S MIDAS® database. This analysis is based on average transaction prices in Canada. For an alternative version using list prices in Canada, see Appendix 3.

* Consistent with the methodology used throughout the Pharmaceutical Trends section, only medicines that reported to the PMPRB in 2022 and had available Canadian sales data at the time of the analysis were considered here. This is a subsection of the total number of medicines that reported to the PMPRB in 2022 and, as such, may not match the total reported in Table 4.

Data source: PMPRB; MIDAS® database, 2022, IQVIA (all rights reserved)

Figure 22 compares the 2022 foreign–to–Canadian price ratios (at market exchange rates) to those in 2013. While the ratios for Australia, Germany, and Sweden decreased over the past decade, price ratios for the eight other PMPRB11 comparators increased compared to Canada. In 2013, only three countries had a price ratio equal to or greater than 0.90, but by 2022 this number had increased to seven.

This analysis uses average transaction prices for the Canadian market. A parallel analysis using Canadian list prices is available in Appendix 3.

Figure 22. Average Foreign–to–Canadian Price Ratios, Canada and the PMPRB11, 2013 and 2022 figure 22

Note: 2013 prices for Australia, Belgium, Japan, Spain, Norway, and the Netherlands are sourced from the IQVIA MIDAS® database. This analysis is based on average transaction prices in Canada. For an alternative version using list prices in Canada, see Appendix 3.

Data source: PMPRB, MIDAS® database, 2013 and 2022, IQVIA (all rights reserved)

Figure description

This bar graph depicts the average foreign–to–Canadian price ratios in 2013 and 2022 for the PMPRB11 comparator countries, using average transaction prices (ATP) for Canada.

Country Average foreign–to–Canadian price ratio for 2013 Average foreign–to–Canadian price ratio for 2022

Canada

1.00

1.00

Australia

0.86

0.76

Belgium

0.77

0.88

France

0.72

0.75

Germany

1.04

1.00

Italy

0.79

0.99

Japan

1.04

1.11

Netherlands

0.79

0.99

Norway

0.73

0.91

Spain

0.77

1.01

Sweden

0.90

0.86

United Kingdom

0.78

1.03

 

If a patented medicine is being sold in one or more of the PMPRB11 countries, the rights holder must report the publicly available ex-factory prices to the PMPRB for each class of customer.Footnote 15 Using this data, Figure 22 provides sales-weighted bilateral ratios comparing Canadian average transaction prices against foreign list prices. In order to assess how Canada compares to a basket of countries beyond the PMPRB11, Figure 23 uses Canadian and international prices reported in the IQVIA MIDAS® database at the ex-factory manufacturer level, reflecting all sales to the pharmacy and hospital sectors. Footnote 16 Note that the results presented in Figures 22 and 23 will differ somewhat due to the use of different data sources.

The international price comparisons reported in Figure 23 provide a bilateral price comparison for all countries in the Organisation for Economic Co-operation and Development (OECD) with available MIDAS® data. The average foreign–to–Canadian price ratios are calculated using the same approach employed to produce the ratios presented in Figure 22. These are Canadian sales-weighted arithmetic averages of the corresponding foreign–to–Canadian price ratios for individual medicines. As shown in Figure 23, median OECD prices are, on average, approximately 22% lower than price levels in Canada, which are the second highest among the 31 countries.

Figure 23. Average Foreign–to–Canadian Price Ratios, Patented Medicines, OECD, 2022 figure 23

* Calculated at the medicine level for medicines with prices available in at least three foreign markets.

Data source: PMPRB; MIDAS® database, 2022, IQVIA (all rights reserved)

Figure description

This bar graph depicts the average foreign–to–Canadian price ratios for patented medicines in 2022 for the Organisation for Economic Co-operation and Development (OECD) countries using Canadian and international prices reported in the IQVIA MIDAS® database. The median for the OECD countries, which is calculated at the medicine level for medicines with prices available in at least three foreign markets, was 0.78. The median for the PMPRB11 comparator countries was 0.81.

Country Average foreign–to–Canadian price ratio

United States

3.57

Canada

1.00

Mexico

1.00

Switzerland

0.97

Spain

0.91

Italy

0.90

Germany

0.90

New Zealand

0.88

Ireland

0.87

Austria

0.87

Norway

0.84

United Kingdom

0.84

Belgium

0.82

Sweden

0.81

Finland

0.81

Luxembourg

0.76

Japan

0.75

Netherland

0.74

France

0.73

Czech Republic

0.72

Hungary

0.71

Australia

0.70

Poland

0.69

Portugal

0.68

Greece

0.65

Slovakia

0.64

Chile

0.62

Estonia

0.62

Slovenia

0.60

South Korea

0.46

Turkey

0.22

 

Brief Insights: Trends in the Price of Generic Medicines

The average price of generic medicines in Canada has dropped substantially, by 60% in Q4-2022 relative to price levels in 2007 (Figure 24). This was the fourth-highest rate of price reduction compared to the PMPRB11 markets, following Australia, Japan, and Germany. Since the end of 2018, Canadian average prices have had little variance.

The most recent Canadian generic pricing policy, implemented in 2018, had brought Canadian generic prices closer in line with average prices in the OECD.

Despite this shift, Canadian prices were still third highest in the PMPRB11 in the last quarter of 2022, behind only Japan and Spain (Figure 25). The median PMPRB11 country, France, had average prices 22% lower. In the broader OECD, median prices were 31% lower than in Canada, and just six other countries had higher average generic prices.

Figure 24. Price Indices and Generic Price Reductions, Canada and the PMPRB11, Q4-2007 to Q4-2022 figure 24

Note: The term "generic” used in this analysis includes both patented and non-patented generic medicines. Results are based on manufacturer ex-factory list prices in the national retail markets. The analysis was restricted to oral solid generic medicines that had been on the market for at least one year. CAN at 18% and 10% refer to the 67 generic medicines reduced to 18% and 10% of their brand reference prices through the generic pricing policy introduced in April 2018. The Netherlands was excluded due to incomplete historical data.

Data source: MIDAS® database, October–December 2007 to October–December 2022, IQVIA (all rights reserved)

Figure description

This line graph and accompanying table focus on the price reductions for generic medicines from the fourth quarter of 2007 to the fourth quarter of 2022. The graph gives the price indices for all generic medicines in Canada, as well as those at 18% and 10% of their brand-reference prices and compares these with the average for the Organisation for Economic Co-operation and Development (OECD) countries over the same period. Note that the term "generic” used in this analysis includes both patented and non-patented generic medicines.

Quarter year Canada Canada medicines at 18% Canada medicines at 10% OECD average

2007: fourth quarter

1.00

1.00

1.00

1.00

2008: first quarter

0.98

0.97

0.97

0.99

2008: second quarter

0.97

0.95

0.95

0.98

2008: third quarter

0.96

0.95

0.94

0.96

2008: fourth quarter

0.96

0.95

0.93

0.95

2009: first quarter

0.96

0.95

0.93

0.93

2009: second quarter

0.96

0.95

0.94

0.92

2009: third quarter

0.96

0.95

0.94

0.91

2009: fourth quarter

0.96

0.95

0.93

0.90

2010: first quarter

0.97

0.96

0.94

0.88

2010: second quarter

0.97

0.95

0.93

0.87

2010: third quarter

0.88

0.86

0.82

0.85

2010: fourth quarter

0.85

0.84

0.79

0.82

2011: first quarter

0.84

0.82

0.77

0.81

2011: second quarter

0.77

0.75

0.70

0.80

2011: third quarter

0.76

0.73

0.68

0.79

2011: fourth quarter

0.75

0.73

0.67

0.78

2012: first quarter

0.75

0.72

0.66

0.76

2012: second quarter

0.69

0.66

0.60

0.73

2012: third quarter

0.65

0.61

0.56

0.72

2012: fourth quarter

0.64

0.60

0.55

0.70

2013: first quarter

0.61

0.57

0.53

0.70

2013: second quarter

0.57

0.55

0.45

0.69

2013: third quarter

0.56

0.55

0.43

0.68

2013: fourth quarter

0.56

0.55

0.43

0.67

2014: first quarter

0.56

0.55

0.43

0.66

2014: second quarter

0.54

0.55

0.39

0.65

2014: third quarter

0.54

0.55

0.39

0.65

2014: fourth quarter

0.54

0.54

0.39

0.64

2015: first quarter

0.54

0.54

0.39

0.64

2015: second quarter

0.53

0.54

0.36

0.63

2015: third quarter

0.52

0.54

0.36

0.63

2015: fourth quarter

0.52

0.53

0.36

0.63

2016: first quarter

0.52

0.53

0.35

0.63

2016: second quarter

0.51

0.53

0.34

0.62

2016: third quarter

0.51

0.53

0.34

0.61

2016: fourth quarter

0.51

0.52

0.34

0.61

2017: first quarter

0.51

0.52

0.34

0.61

2017: second quarter

0.49

0.52

0.32

0.60

2017: third quarter

0.49

0.52

0.32

0.60

2017: fourth quarter

0.49

0.52

0.32

0.59

2018: first quarter

0.49

0.52

0.32

0.59

2018: second quarter

0.41

0.39

0.21

0.58

2018: third quarter

0.41

0.38

0.21

0.58

2018: fourth quarter

0.41

0.38

0.21

0.58

2019: first quarter

0.40

0.37

0.20

0.58

2019: second quarter

0.40

0.37

0.20

0.58

2019: third quarter

0.40

0.37

0.20

0.58

2019: fourth quarter

0.40

0.37

0.20

0.58

2020: first quarter

0.41

0.38

0.20

0.58

2020: second quarter

0.41

0.38

0.20

0.58

2020: third quarter

0.41

0.38

0.20

0.58

2020: fourth quarter

0.41

0.38

0.20

0.58

2021: first quarter

0.40

0.38

0.20

0.58

2021: second quarter

0.41

0.38

0.20

0.58

2021: third quarter

0.41

0.38

0.20

0.57

2021: fourth quarter

0.41

0.38

0.20

0.57

2022: first quarter

0.41

0.38

0.20

0.57

2022: second quarter

0.41

0.38

0.20

0.58

2022: third quarter

0.41

0.38

0.20

0.60

2022: fourth quarter

0.40

0.38

0.20

0.60

The accompanying table gives the associated generic price reductions from the fourth quarter of 2007 to the fourth quarter of 2022 for the Canadian markets and the OECD average, as well as for each of the PMPRB11 countries.

Country Generic price reduction Q4-2007 to Q4-2022

Australia

-86%

CAN at 10%

-80%

Japan

-64%

CAN at 18%

-62%

Germany

-60%

Canada

-60%

United Kingdom

-57%

Spain

-46%

France

-45%

OECD average

-40%

Belgium

-38%

Italy

-28%

Sweden

-26%

Norway

-11%

 
Figure 25. Foreign–to–Canadian Price Ratios for Generic Medicines, OECD, Q4-2022 figure 25

* The OECD median does not necessarily represent the median result for the individual countries reported in this graph, as it is calculated at the medicine level for generics with prices available in at least three foreign markets.

Data source: MIDAS® database, October–December 2022, IQVIA (all rights reserved)

[NPDUIS Report: Generics360, 2018 – graph updated to 2022]

Figure description

This bar graph compares the bilateral foreign–to–Canadian generic medicine price ratios for OECD countries for the fourth quarter of 2022. The median for the OECD countries, which is calculated at the medicine level for medicines with prices available in at least three foreign markets, was 0.69.

Note that the term "generic" used in this analysis includes both patented and non-patented generic medicines. Results are based on manufacturer ex-factory list prices in the national retail markets. The analysis was restricted to oral solid generic medicines that had been on the market for at least one year.

Country Foreign–to–Canadian price ratio

Mexico

2.06

Switzerland

1.95

Chile

1.80

South Korea

1.50

Spain

1.17

Japan

1.03

Canada

1.00

Italy

0.94

Greece

0.94

Ireland

0.93

Austria

0.92

United States

0.91

Belgium

0.85

Norway

0.81

Estonia

0.81

Luxembourg

0.79

France

0.78

Portugal

0.75

Germany

0.73

United Kingdom

0.73

Slovenia

0.72

Czech Republic

0.68

Finland

0.68

Australia

0.66

Poland

0.58

Hungary

0.56

Netherlands

0.56

Slovakia

0.53

Sweden

0.51

New Zealand

0.45

Turkey

0.34

 

Multilateral Price Comparisons

Table 8 provides average foreign–to–Canadian price ratios using several multilateral measures of foreign prices. The median international price (MIP) is the median of list prices observed among the PMPRB11. Other multilateral price ratios compare the minimum, maximum, and simple mean of PMPRB11 foreign prices to the Canadian average transaction price.

Focusing on the results based on market exchange rates, the average MIP–to–Canadian price ratio was 0.96 for the PMPRB11 in 2022, a slight increase over 2021 (Figure 26).

Both Table 8 and Figure 26 use average transaction prices for the Canadian market. Parallel analyses using Canadian list prices are available in Appendix 3.

Table 8. Average Foreign–to–Canadian Price Ratios, Multilateral Comparisons, 2022

  Median Minimum Maximum Mean

Average price ratio at market exchange rates

0.96

0.69

1.34

0.97

Average price ratio at purchasing power parities

1.10

0.70

1.67

1.12

Number of patented medicines

955

955

955

955

Sales ($millions)

$17,713.13

$17,713.13

$17,713.13

$17,713.13

Note: This analysis is based on average transaction prices. For an alternative version based on list prices, see Appendix 3.

Data source: PMPRB

Figure 26. Average Ratio of Median International Price (MIP) to Canadian Price, at Market Exchange Rates, PMPRB7, PMPRB5, and PMPRB11, 2008 to 2022 figure 27

Note: PMPRB7 is France, Germany, Italy, Sweden, Switzerland, the United Kingdom (UK), and the United States (US). PMPRB5 removes Switzerland and the US. PMPRB11 is Australia, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, and the UK.

This analysis is based on average transaction prices in Canada. For an alternative version using list prices in Canada, see Appendix 3.

Data source: PMPRB; MIDAS® database, 2008–2022, IQVIA (all rights reserved)

Figure description

This line graph depicts the trend in the average MIP–to–Canadian price ratios from 2008 to 2022 with the average transaction price (ATP) in Canada set to a value of 1.00. Three trend lines are given, for the PMPRB7, PMPRB5, and PMPRB11 groups of comparator countries.

Year Price ratio for PMPRB7 Price ratio for PMPRB5 Price ratio for PMPRB11

2008

1.03

0.82

0.92

2009

1.04

0.84

0.94

2010

1.06

0.83

0.90

2011

1.05

0.80

0.87

2012

1.07

0.75

0.83

2013

1.06

0.76

0.84

2014

1.13

0.84

0.89

2015

1.18

0.83

0.88

2016

1.25

0.85

0.92

2017

1.26

0.84

0.91

2018

1.20

0.81

0.93

2019

1.16

0.82

0.90

2020

1.16

0.81

0.92

2021

1.12

0.82

0.94

2022

1.13

0.81

0.96

 

Figure 27 offers more detail on the medicine-level MIP–to–Canadian ratios underlying the averages reported in Table 8. This figure distributes the 2022 sales of each patented medicine according to the value of its MIP–to–Canadian price ratio (more exactly, according to the range into which the ratio fell).Footnote 17 These results show a substantial dispersion in medicine-level price ratios: while patented medicines with MIP–to–Canadian price ratios between 0.90 and 1.10 accounted for 38.0% of sales, those with ratios less than 0.90 accounted for 46.6% of sales and medicines with ratios exceeding 1.10 accounted for the remaining 15.4%. Approximately one quarter of the medicines assessed had an MIP–to–Canadian ratio greater than 1.50.

This analysis uses average transaction prices for the Canadian market. A parallel analysis using Canadian list prices is available in Appendix 3.

Figure 27 Range Distribution, Share of Sales by MIP–to–Canadian Price Ratio, 2022 figure 27

Note: This analysis is based on average transaction prices in Canada. For an alternative version using list prices in Canada, see Appendix 3.

Data source: PMPRB

Figure description

This bar graph depicts the distribution of 2022 sales of patented medicines by their range of MIP–to–Canadian price ratio. Average transaction prices (ATP) are used for Canada. Ratios between less than 0.50 and greater than 1.50 are given in increments of 0.05.

Patented medicines with price ratios less than 0.50 accounted for 3.7% of sales;
0.50 to 0.55: 2.1%;
0.55 to 0.60: 0.3%;
0.60 to 0.65: 1.7%;
0.65 to 0.70: 6.3%;
0.70 to 0.75: 13.7%;
0.75 to 0.80: 3.0%;
0.80 to 0.85: 3.7%;
0.85 to 0.90: 12.1%;
0.90 to 0.95: 16.9%;
0.95 to 1.00: 6.9%;
1.00 to 1.05: 10.3%;
1.05 to 1.10: 3.9%;
1.10 to 1.15: 3.5%;
1.15 to 1.20: 0.9%;
1.20 to 1.25: 1.8%;
1.25 to 1.30: 1.2%;
1.30 to 1.35: 1.6%;
1.35 to 1.40: 0.4%;
1.40 to 1.45: 0.0%;
1.45 to 1.50: 0.8%;
>1.50: 5.2%.

 

In 2022, approximately 58% of Canadian patented medicines were priced above the median international level.Footnote 18 Table 9 examines the impact of this difference by therapeutic class. Medicines that share the fourth level ATC classification ("ATC4")Footnote 19 are grouped to identify distinct chemical/pharmacological/therapeutic subgroups, allowing for a calculation of the average MIP–to–Canadian price ratios among medicines that may be used to treat the same conditions.

Table 9 identifies the top 10 ATC4s in 2022 in which the difference between Canadian and median prices had the largest effect on Canadian patented medicine spending. For example, had Canadian prices been in line with the international median for these classes of medicines in 2022, sales in Canada would have been reduced by approximately $1,559 million (an average reduction of 12% for these ATC4s). Of the 136 DINs classified into these 10 ATC4s, 53% were priced above the median international price.

Table 9. Top 10 ATC4s* by Total Sales Greater than Median International Prices, 2022

Description ATC4* No. of companies No. of chemicals in ATC4 (No. currently under patent) Total patented DINs Patented DINs greater than median price 2022 net revenues for patented DINs ($millions) Patented DINs ATC4 share of 2022 revenues MIP–to–Canadian ratio (min. 5) of patented DINs Impact of difference on patented medicines in 2022 ($millions)

Tumor necrosis factor alpha (TNF-α) inhibitors

L04AB

4

5(3)

13

10

$861.50

4.68%

0.76

$221.87

Other muscle relaxants, peripherally acting agents

M03AX

3

3(3)

8

5

$358.80

1.95%

0.75

$211.42

Combinations of oral blood glucose lowering drugs

A10BD

5

11(6)

24

21

$400.72

2.18%

0.60

$207.08

Antineovascularisation agents

S01LA

4

5(4)

5

4

$743.37

4.04%

0.75

$190.76

Sodium-glucose co-transporter 2 (SGLT2) inhibitors

A10BK

3

4(3)

6

6

$670.00

3.64%

0.74

$178.54

Dipeptidyl peptidase 4 (DPP-4) inhibitors

A10BH

3

4(3)

7

7

$272.61

1.48%

0.52

$135.04

Selective immunosuppressants

L04AA

14

26(18)

30

4

$1,332.00

7.24%

0.94

$124.89

Centrally acting sympathomimetics

N06BA

2

5(3)

26

4

$411.17

2.23%

0.97

$105.49

Other respiratory system products

R07AX

1

5(4)

11

7

$606.14

3.29%

0.93

$93.09

Other drugs affecting bone structure and mineralization

M05BX

2

3(3)

6

4

$135.87

0.74%

0.80

$91.40

* Level 4 of the Anatomical Therapeutic Chemical (ATC) classification system maintained by the World Health Organization.

For cases where the Canadian average transactional price was below the median international price, the MIP–to–Canadian ratio was set to 1.00.

Data source: PMPRB

 

Utilization of Patented Medicines

The price and sales data used to calculate the PMPI also allow the PMPRB to examine trends in the quantities of patented medicines sold in Canada. The PMPRB maintains the Patented Medicines Quantity Index (PMQI) for this purpose. Figure 28 provides average rates of utilization growth, as measured by the PMQI, from 2003 through 2022.

Figure 28. Annual Rate of Change, Patented Medicines Quantity Index (PMQI), 2003 to 2022 figure 28

Data source: PMPRB

Figure description

This bar graph depicts the average annual rates of growth in utilization, as measured by the Patented Medicines Quantity Index (PMQI), from 2003 to 2022.

The rate of change in 2003 was 14.1%;
2004: 8.5%;
2005: 4.2%;
2006: 5.4%;
2007: 3.4%;
2008: 3.7%;
2009: 3.2%;
2010: -2.3%;
2011: 0.8%;
2012: -1.6%;
2013: 4.4%;
2014 : 3.5%;
2015: 9.5%;
2016: 4.4%;
2017: 8.0%;
2018: 13.2%;
2019: 6.3%;
2020: 5.2%;
2021: 4.8%;
2022: 6.5%.

 
Canada is a top 10 global market

Canada is an important market for pharmaceuticals representing 2.2% of worldwide sales in 2022.

Canada spends nearly the same amount as the UK on pharmaceuticals despite having less than two thirds the population.

 

Canadian Medicine Expenditures in the Global Context

IQVIAFootnote 20 regularly reports on medicine sales across a large number of countries. Based on sales data from this source, Figure 29 provides shares of global sales for Canada and other major national markets including the PMPRB11 countries.Footnote 21 The Canadian market accounted for 2.2% of the global market in 2022. Canada has been consistently at about 2.0%–2.5% over the last decade.

Figure 30 gives the average annual rate of growth in total medicine sales for Canada and the PMPRB11, individually and collectively. From 2013 to 2022, sales of medicines in Canada rose at an average annual rate of 5.5%. This is slightly above the average rate of growth in medicine sales among the PMPRB11 countries over the same period.

Figure 29. Distribution of Medicine Sales Among Major National Markets, 2022 figure 29

Data source: MIDAS® database, 2022, IQVIA (all rights reserved)

Figure description

This pie chart depicts the distribution of medicine sales among major global markets in 2022.

The US market accounted for 47.4% of the global market in 2022; Japan: 5.1%; Germany: 4.0%; France: 3.1%; Italy: 2.7%; United Kingdom: 2.5%; Canada: 2.2%; Spain 2.1%; Australia 1.1%; Switzerland: 0.6%; Belgium 0.6%; Sweden: 0.4%; Norway 0.3%; Netherlands 0.3%; and the rest of the world: 27.6%.

 
Figure 30. Average Rate of Growth of Medicine Sales, at Constant 2022 Market Exchange Rates, by Country, Canada and the PMPRB11, 2013 to 2022 figure 30

Data source: MIDAS® database, 2013–2022, IQVIA (all rights reserved)

Figure description

This bar graph depicts the average annual rate of growth in total medicine sales for Canada and the PMPRB11 comparator countries from 2013 to 2022.

In Norway, the average rate of growth was 10.3%; United Kingdom: 6.9%; Spain: 5.8%; Sweden: 5.7%; Belgium: 5.6%; Canada: 5.5%; Australia: 5.1%; Italy: 5.1%; Germany: 4.4%; France: 3.5%; Netherlands: 1.3%; Japan: 0.7%. The average rate of growth across all of the PMPRB11 was 4.9%.

 
1.9% Medicine Expenditures in Canada

In 2020, Canadians spent 1.9% of gross domestic product on medicines. This was the second highest share in the PMPRB11, behind only Japan.

Figure 31 compares rates of year-over-year growth in medicine sales for the entire pharmaceutical market in Canada and the PMPRB11 countries combined. In 2022, sales grew at a slightly faster rate in Canada than in the PMPRB11.

The proportion of national income allocated to the purchase of medicines provides another way to compare medicine costs across countries.Footnote 22 Figure 32 gives medicine expenditures as a share of gross domestic product (GDP) for Canada and the PMPRB11 countries based on data for 2020. Medicine expenditures absorbed between 0.8% and 2.3% of the GDP in the PMPRB11. The Canadian value of 1.9% was second only to Japan but just slightly above Germany (1.8%) and Italy (1.7%).

Figure 31. Average Annual Rate of Change in Medicine Sales, at Constant 2022 Market Exchange Rates, Canada and the PMPRB11, 2013 to 2022 figure 31

Data source: MIDAS® database, 2013–2022, IQVIA (all rights reserved)

Figure description

This line graph depicts the average annual rate of change in medicine sales, using constant 2022 market exchange rates, for Canada, the average of the PMPRB11 countries, and the PMPRB11 median from 2013 to 2022.

Year Rate of change (%), Canada Rate of change (%), PMPRB11 average Rate of change (%), PMPRB11 median

2013

1.6

1.5

2.5

2014

4.7

3.4

2.6

2015

6.6

7.3

6.7

2016

4.0

5.7

4.0

2017

6.9

4.0

3.7

2018

4.6

4.6

4.8

2019

5.3

5.5

4.9

2020

6.7

4.2

4.9

2021

7.6

6.5

6.9

2022

9.7

8.9

8.1

 
Figure 32. Medicine Expenditures as a Share of GDP, Canada and the PMPRB11, 2020 figure 32

Data source: OECD

Figure description

This bar graph depicts the expenditures for medicines as a share of the gross domestic product (GDP) for Canada and the PMPRB11 comparator countries based on data for 2020.

In the Netherlands, medicine expenditure was 0.8% of the GDP; Norway: 0.8%; Sweden: 1.1%; Belgium: 1.3%; Australia: 1.3%; United Kingdom: 1.4%; France: 1.6%; Spain: 1.6%; Italy: 1.7%; Germany: 1.8%; Canada: 1.9%; Japan: 2.3%.

 

Table 10 provides a historical perspective on the expenditures–to–GDP ratio and per capita spending.Footnote 23 Between 2011 and 2020, Canada's ratio was unchanged, and the ratios of three PMPR11 countries—Belgium, France, and the Netherlands—declined. In 2020, Canada had the third-highest spending per capita on medicines compared to the PMPRB11, behind the Japan and Germany.

Table 10. Medicine Expenditures as a Share of GDP and Per Capita, Canada and the PMPRB11, 2011 and 2020

  Share: Medicine Expenditures/GDP 2011 Share: Medicine Expenditures/GDP 2020 Growth: GDP 2011-2020 Medicine spending per capita 2011
($US PPP)
Medicine spending per capita 2020
($US PPP)

Canada

1.86%

1.86%

25.6%

$755

$839

Australia

1.29%

1.30%

44.1%

$583

$632

Belgium

1.41%

1.25%

39.3%

$552

$609

France

1.68%

1.62%

32.9%

$623

$726

Germany

1.54%

1.75%

37.5%

$652

$948

Italy

1.63%

1.72%

18.0%

$575

$670

Japan

1.98%

2.30%

13.4%

$707

$954

Netherlands

0.95%

0.78%

34.1%

$427

$427

Norway

1.50%

1.62%

12.2%

$397

$473

Spain

1.50%

1.62%

20.8%

$446

$560

Sweden

1.09%

1.13%

37.9%

$467

$562

United Kingdom

1.25%

1.42%

30.5%

$462

$590

Data source: OECD

Table 11 gives the composition of rights holders’ sales by therapeutic class for Canada and the PMPRB11, individually by country and as an aggregate.Footnote 24 The results suggest considerable similarity across countries.

Table 11. Distribution of Medicine Sales by Major Therapeutic Class, Canada and the PMPRB11, 2022

Therapeutic class Canada PMPRB11 Australia Belgium France Germany Italy Japan Netherlands Norway Spain Sweden United Kingdom

A: Alimentary tract and metabolism

14.9%

11.3%

12.1%

9.7%

8.7%

10.8%

10.4%

13.5%

17.0%

12.4%

11.3%

11.2%

11.0%

B: Blood and blood-forming organs

4.4%

7.8%

5.3%

9.6%

8.6%

8.8%

9.0%

6.5%

12.3%

7.4%

6.7%

9.7%

7.8%

C: Cardiovascular system

5.8%

7.0%

4.5%

6.5%

6.4%

6.4%

7.9%

8.9%

11.8%

4.7%

7.1%

4.3%

5.0%

D: Dermatologicals

2.9%

2.3%

5.1%

1.6%

1.8%

3.2%

1.8%

2.3%

1.9%

1.7%

1.8%

2.0%

1.9%

G: Genito-urinary system and sex hormones

3.2%

2.3%

2.9%

2.2%

2.1%

2.0%

2.4%

2.4%

3.2%

3.0%

2.6%

2.7%

2.4%

H: Systemic hormonal preparations

1.1%

1.7%

1.0%

1.3%

1.7%

1.7%

1.5%

2.2%

2.1%

2.4%

1.5%

2.1%

1.4%

J: General anti-infective for systemic use

8.2%

8.9%

7.5%

7.4%

9.2%

8.9%

11.0%

7.3%

7.8%

8.9%

10.3%

10.6%

9.5%

L: Antineoplastics and immunomodulating agents

26.9%

27.4%

23.3%

35.6%

33.2%

26.5%

29.0%

23.1%

3.1%

31.1%

29.6%

27.8%

29.0%

M: Musculo-skeletal system

2.7%

3.4%

3.0%

2.5%

2.3%

3.5%

2.9%

5.4%

2.2%

3.3%

2.6%

3.4%

2.3%

N: Nervous system

15.3%

12.2%

12.9%

11.0%

11.8%

13.5%

12.0%

10.0%

17.0%

13.7%

14.6%

13.3%

12.5%

P: Antiparasitic products

0.1%

0.1%

0.2%

0.1%

0.1%

0.2%

0.0%

0.1%

0.3%

0.2%

0.1%

0.1%

0.1%

R: Respiratory system

6.5%

7.0%

9.6%

7.2%

6.3%

7.5%

6.1%

4.9%

15.2%

6.2%

7.0%

6.1%

10.1%

S: Sensory organs

4.1%

3.1%

4.5%

2.2%

3.3%

2.8%

1.8%

3.5%

4.2%

2.0%

2.7%

3.7%

4.2%

V: Various

3.8%

5.3%

8.2%

3.3%

4.5%

4.3%

4.3%

9.9%

1.9%

2.9%

2.1%

2.9%

2.9%

All therapeutic classes*

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

* Values may not add to 100% due to rounding.

Data source: MIDAS® database 2022, IQVIA (all rights reserved)

National Prescription Drug Utilization Information System: Supporting Health Care Decision Making in Canada

How medications are used—where, by whom, and for what—has an impact on the amount that we spend on medicines. The PMPRB contributes to Canada’s understanding of medicine usage through the National Prescription Drug Utilization Information System (NPDUIS) initiative, generating comprehensive, accurate information to help guide decision making and support the sustainability of our pharmaceutical system.

Background

NPDUIS is a research initiative established by federal, provincial, and territorial Ministers of Health in September 2001. It is a partnership between the PMPRB and the Canadian Institute for Health Information (CIHI).

At the request of the Minister of Health pursuant to section 90 of the Patent Act, the PMPRB has the mandate to conduct analysis that provides decision makers with critical information and intelligence on price, utilization, and cost trends so that Canada’s healthcare system has more comprehensive and accurate information on how medicines are being used and on sources of cost pressures.

The specific research priorities and methodologies for NPDUIS are established with the guidance of the NPDUIS Advisory Committee and reflect the priorities of the participating jurisdictions. The Advisory Committee is composed of representatives from public drug plans in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, the Non-Insured Health Benefits (NIHB) Program, and Health Canada. It also includes observers from the CIHI, the Canadian Agency for Drugs and Technologies in Health (CADTH), the Ministère de la Santé et des Services sociaux du Québec (MSSS), and the pan-Canadian Pharmaceutical Alliance (pCPA) Office.

NPDUIS operates independently of the price review activities of the PMPRB. NPDUIS reports do not contain information that is confidential or privileged under sections 87 and 88 of the Patent Act.

Highlights

Since the start of 2022, the PMPRB has published six analytical reports, one chartbook, and eight posters under the NPDUIS banner.

Annual Publications and Report Series:

Chartbook:

Poster Presentations:

The PMPRB continues to support and strengthen its NPDUIS engagement activities by regularly consulting with the NPDUIS Advisory Committee, participating in conferences and stakeholder committees, and organizing bilingual information sessions with interested stakeholders to share the results of the analytical studies.

Research Agenda

The NPDUIS research agenda for the 2023-24 fiscal year includes plans to publish the following analytical studies:

Annual Publications and Report Series

  • CompassRx: 9th Edition, 2021/22
  • Meds Pipeline Monitor, 2022
  • Meds Entry Watch, 7th Edition
  • Meds Entry Watch, 8th Edition
  • Market Intelligence Report: Medicines for Heart Failure

Additional research topics may be pursued based on consultation with the NPDUIS Advisory Committee.

Analysis of Research and Development Expenditures: Tracking Reported R&D Spending in Canada

Pharmaceutical research and development (R&D) is an important piece in advancing innovation in global and national health care. In Canada, the ratio of R&D expenditures to sales revenues for pharmaceutical rights holders has been steadily decreasing since the late 1990s. In 2022, it was at 3.1% for all rights holders and 3.2% for members of Innovative Medicines Canada.

Analysis of Research and Development Expenditures

The Act mandates the PMPRB to monitor and report on pharmaceutical R&D spending. This section provides key statistics on the current state of pharmaceutical R&D investment in Canada.

Definition of R&D Expenditures

Pursuant to section 6 of the Regulations, rights holders are required to report R&D expenditures that would have qualified for a Scientific Research and Experimental Development (SR&ED) investment tax credit under the provisions of the Income Tax Act that came into effect on December 1, 1987.Footnote 25 By this definition, R&D expenditures may include current expenditures, capital equipment costs, and allowable depreciation expenses. Market research; sales promotions; quality control or routine testing of materials, devices, or products; and routine data collection are not eligible for an investment tax credit, and, therefore, are not to be included in the R&D expenditures reported by rights holders.

Data Sources

The statistical results in this section were entirely derived from data submitted to the PMPRB by rights holders.

The Act requires each rights holder to report its total gross revenues from sales of all medicines for human or veterinary use (including revenues from sales of non-patented medicines and from licensing agreements) and R&D expenditures in Canada related to medicines (both patented and non-patented for human or veterinary use).

Rights holders submit this information to the PMPRB by means of its Form 3 (Revenues and Research and Development Expenditures Provided Pursuant to subsection 88(1) of the Patent Act).

The Patented Medicines Regulations (Regulations) require that each submitted Form 3 be accompanied by a certificate stating the information it contains is "true and correct". The Board does not audit Form 3 submissions, but it does review submitted data for anomalies and inconsistencies, seeking corrections or clarifications from rights holders where necessary. To confirm that PMPRB staff has correctly interpreted the data submitted, each rights holder is given the opportunity to review and confirm the accuracy of its own R&D–to–sales ratio before that ratio is published.

3.1% R&D–to–sales ratio

The R&D–to–sales ratio for all patentees was 3.1% in 2022.

This represents a 74% decrease from a peak of 11.7% in 1995.

Failure to File (Form 3)

It is a rights holder’s responsibility to ensure a complete and accurate Form 3 is filed within the time frame set out in the Regulations. If a rights holder fails to meet these filing requirements, the Board may issue an Order demanding compliance. No such Board Orders were issued for the 2022 reporting period.

Coverage

Note that companies without sales of patented medicines do not need to report their R&D expenditures to the PMPRB. This has two implications:

First, the statistical results reported herein should not be understood as representative of all pharmaceutical research conducted in Canada. For example, a company may sell only non-patented medicines but still perform considerable research. Similarly, a company may conduct research and have no medicine sales at all.Footnote 26 The results presented below will not reflect the R&D expenditures of firms in either scenario.

Second, as new patented medicines enter the Canadian market and existing relevant patents expire, the number and identity of companies required to file R&D data may change from year to year. In 2022, 100 companies reported on their R&D activity. Of these, 37 were members of Innovative Medicines Canada.

Definition of Sales Revenues

For reporting purposes, sales revenues are defined as total gross revenues from sales in Canada of all medicines and from licensing agreements (e.g., royalties and fees accruing to the rights holder related to sales in Canada by licensees).

Total Sales Revenues and R&D Expenditures

Table 12 provides an overview of reported sales revenues and R&D expenditures from 1988 to 2022.

Rights holders reported total 2022 sales revenues of $29.1 billion, an increase of 6.1% from 2021. Sales revenues reported by Innovative Medicines Canada members were $23.3 billion, accounting for 80% of the total. Less than 1% of reported sales revenues were generated by licensing agreements. Rights holders reported R&D expenditures of $914.0 million in 2022, a decrease of 1.0% from 2021. Innovative Medicines Canada members reported R&D expenditures of $748.6 million in 2022, an increase of 1.7% over the previous year. Innovative Medicines Canada members accounted for 82.0% of all reported R&D expenditures in 2022.

R&D–to–Sales Ratios

Table 12 and Figure 33 also provide ratios of R&D expenditures to sales revenues. It should be noted that with the adoption of the 1987 amendments to the Act, Innovative Medicines Canada made a public commitment to increase its members’ annual R&D expenditures to 10% of sales revenues by 1996.Footnote 27 This level of R&D expenditure was reached by 1993, with the ratio exceeding 10% in some years.

The ratio of R&D expenditures to sales revenues among all rights holders was 3.1% in 2022, a decrease from 2021 and the lowest level yet recorded. The overall R&D–to–sales ratio has been less than 10% for the past 22 years.

The corresponding R&D–to–sales ratio for members of Innovative Medicines Canada was 3.2%, also a decrease from 2021.Footnote 28 The Innovative Medicines Canada ratio has been less than 10% for the past 20 years. Table 20 in Appendix 4 provides details on the range of 2022 R&D–to–sales ratios. Of the 100 companies reporting in 2022, 84.0% had R&D–to–sales ratios below 10.0%.

Table 12 Total R&D Expenditures and R&D–to–Sales Ratios of Reporting Companies, 1988 to 2022

Year All rights holders Innovative Medicines Canada rights holders R&D–to–sales ratio: all rights holders R&D–to–sales ratio: Innovative Medicines Canada rights holders
Number of companies reporting R&D expenditures by all rights holders ($millions) Change from previous Year Sales revenues ($millions) Change from previous year R&D expenditures by Innovative Medicines Canada rights holders ($millions) Change from previous year Sales revenues ($millions) Change from previous year

2022

100

$914.0

-1.0%

$29,144.9

6.1%

$748.6

1.7%

$23,342.9

9.9%

3.1%

3.2%

2021

100

$922.9

12.2%

$27,478.5

13.2%

$735.9

11.0%

$21,243.9

12.4%

3.4%

3.5%

2020

99

$822.9

-7.9%

$24,278.2

5.1%

$662.8

1.6%

$18,902.9

12.1%

3.4%

3.5%

2019

101

$893.2

0.1%

$23,101.0

1.9%

$652.6

-9.7%

$16,858.8

0.4%

3.9%

3.9%

2018

93

$892.6

2.4%

$22,663.4

7.2%

$723.0

-4.3%

$16,789.7

2.7%

4.0%

4.3%

2017

85

$871.4

-5.1%

$21,147.2

1.4%

$755.8

-1.8%

$16,349.8

4.8%

4.1%

4.6%

2016

78

$918.2

5.7%

$20,855.7

5.9%

$769.9

0.3%

$15,599.9

0.2%

4.4%

4.9%

2015

77

$869.1

9.7%

$19,693.3

6.7%

$767.4

7.8%

$15,565.1

4.7%

4.4%

4.9%

2014

75

$792.2

-0.8%

$18,455.1

1.0%

$711.7

2.0%

$14,861.1

9.2%

4.3%

4.8%

2013

81

$798.3

-14.7%

$18,268.1

1.4%

$697.5

-15.4%

$13,614.8

3.4%

4.4%

5.1%

2012

85

$936.1

-5.6%

$18,021.1

1.3%

$824.1

-8.6%

$13,162.8

-2.1%

5.2%

6.3%

2011

79

$991.7

-15.8%

$17,798.8

4.7%

$901.2

-9.9%

$13,446.1

10.7%

5.6%

6.7%

2010

82

$1,178.2

-7.4%

$17,000.0

-0.3%

$1,000.2

-11.7%

$12,149.0

-11.8%

6.9%

8.2%

2009

81

$1,272.0

-2.9%

$17,051.9

4.5%

$1,132.9

-3.4%

$13,780.0

4.6%

7.5%

8.2%

2008

82

$1,310.7

-1.1%

$16,316.7

2.0%

$1,172.2

-1.0%

$13,178.2

-1.4%

8.1%

8.9%

2007

82

$1,325.0

9.5%

$15,991.0

7.3%

$1,184.4

24.8%

$13,359.8

20.0%

8.3%

8.9%

2006

72

$1,210.0

-1.9%

$14,902.0

4.7%

$949.0

-8.8%

$11,131.2

-5.8%

8.1%

8.5%

2005

80

$1,234.3

5.5%

$14,231.3

0.5%

$1,040.1

3.9%

$11,821.4

0.0%

8.7%

8.8%

2004

84

$1,170.0

-2.0%

$14,168.3

4.0%

$1,000.8

0.8%

$11,819.0

8.8%

8.3%

8.5%

2003

83

$1,194.3

-0.4%

$13,631.1

12.8%

$992.9

-3.6%

$10,865.7

5.2%

8.8%

9.1%

2002

79

$1,198.7

13.0%

$12,081.2

12.5%

$1,029.6

10.1%

$10,323.8

16.8%

9.9%

10.0%

2001

74

$1,060.1

12.6%

$10,732.1

15.3%

$935.2

14.7%

$8,835.4

14.3%

9.9%

10.6%

2000

79

$941.8

5.3%

$9,309.6

12.0%

$815.5

4.0%

$7,728.8

11.6%

10.1%

10.6%

1999

78

$894.6

12.0%

$8,315.5

19.2%

$784.3

9.9%

$6,923.4

22.8%

10.8%

11.3%

1998

74

$798.9

10.2%

$6,975.2

10.9%

$713.7

8.6%

$5,640.2

10.6%

11.5%

12.7%

1997

75

$725.1

9.0%

$6,288.4

7.4%

$657.4

10.3%

$5,098.2

4.9%

11.5%

12.9%

1996

72

$665.3

6.4%

$5,857.4

9.9%

$595.8

6.5%

$4,859.5

8.7%

11.4%

12.3%

1995

71

$625.5

11.5%

$5,330.2

7.5%

$559.5

9.8%

$4,468.8

1.4%

11.7%

12.5%

1994

73

$561.1

11.4%

$4,957.4

4.4%

$509.5

10.4%

$4,407.2

2.0%

11.3%

11.6%

1993

70

$503.5

22.1%

$4,747.6

14.0%

$461.4

24.0%

$4,321.4

14.4%

10.6%

10.7%

1992

71

$412.4

9.6%

$4,164.4

6.9%

$372.1

9.0%

$3,778.4

6.5%

9.9%

9.8%

1991

65

$376.4

23.2%

$3,894.8

18.1%

$341.4

24.7%

$3,546.9

19.5%

9.7%

9.6%

1990

65

$305.5

24.8%

$3,298.8

11.0%

$273.8

25.8%

$2,967.9

10.5%

9.3%

9.2%

1989

66

$244.8

47.4%

$2,973.0

9.4%

$217.6

34.7%

$2,685.5

7.3%

8.2%

8.1%

1988

66

$165.7

$2,718.0

$161.5

$2,502.3

6.1%

6.5%

Data source: PMPRB

Figure 33. R&D–to–Sales Ratio, Pharmaceutical Rights Holders, 1988 to 2022 figure 33

Data source: PMPRB

Figure description

This line graph depicts the annual the R&D–to–sales ratio for all rights holders and members of Innovative Medicines Canada (IMC) from 1988 to 2022.

Year R&D–to–sales ratios (%) for all rights holders R&D–to–sales ratios (%) for Innovative Medicines Canada rights holders

1988

6.1

6.5

1989

8.2

8.1

1990

9.3

9.2

1991

9.7

9.8

1992

9.9

9.8

1993

10.6

10.7

1994

11.3

11.6

1995

11.7

12.5

1996

11.4

12.3

1997

11.5

12.9

1998

11.5

12.7

1999

10.8

11.3

2000

10.1

10.6

2001

9.9

10.6

2002

9.9

10.0

2003

8.8

9.1

2004

8.3

8.5

2005

8.7

8.8

2006

8.1

8.5

2007

8.2

8.9

2008

8.1

8.9

2009

7.5

8.2

2010

6.9

8.2

2011

5.6

6.7

2012

5.2

6.3

2013

4.4

5.7

2014

4.3

4.8

2015

4.4

4.9

2016

4.4

4.9

2017

4.1

4.6

2018

4.0

4.3

2019

3.9

3.9

2020

3.4

3.5

2021

3.4

3.5

2022

3.1

3.2

 

Current R&D Expenditures by Type of Research

Table 13 and Figure 34 (as well as Figure 40 in Appendix 4) provide information on the allocation of 2022 R&D expendituresFootnote 29 in basic and applied research as well as other qualifying R&D.Footnote 30 Rights holders reported spending $132.0 million on basic research in 2022, representing 14.9% of current R&D expenditures, an increase of 17.1% over the previous year. A reported $484.4 million was spent on applied research, representing 54.9% of current R&D expenditures. Clinical trials (Phase I to III) accounted for 80.0% of applied research expenditures.

Table 13. Current R&D Expenditures by Type of Research, 2022 and 2021

Type of research Expenditures: 2022 ($millions) Share: 2022 Expenditures: 2021 ($millions) Share: 2021 Annual change in expenditures

Basic

$132.0

14.9%

$112.7

12.6%

17.1%

Chemical

$89.1

10.0%

$70.6

7.9%

26.2%

Biological

$42.9

4.9%

$42.1

4.7%

1.9%

Applied

$484.4

54.9%

$507.7

56.9%

-4.6%

Manufacturing process

$38.1

4.3%

$44.3

5.0%

-14.0%

Pre-clinical trial I

$39.5

4.5%

$31.6

3.5%

25.0%

Pre-clinical trial II

$19.3

2.2%

$19.7

2.2%

-2.0%

Clinical trial Phase I

$45.2

5.1%

$53.1

5.9%

-14.9%

Clinical trial Phase II

$70.3

8.0%

$78.3

8.8%

-10.2%

Clinical trial Phase III

$272.0

30.8%

$280.7

31.5%

-3.1%

Other qualifying R&D

$266.4

30.2%

$272.1

30.5%

-2.1%

Total*

$882.8

100%

$892.5

100%

-1.1%

* Values may not add to totals due to rounding.

Data source: PMPRB

Figure 34. Current R&D Expenditures by Type of Research, 1988 to 2022 figure 34

Data source: PMPRB

Figure description

This stacked bar graph depicts the share of current R&D expenditures from 1988 to 2022 by type of research: basic, applied, and other qualifying.

Year Basic research (%) Applied research (%) Other qualifying research (%)

1988

19.1

67.2

13.7

1989

23.4

62.7

13.9

1990

27.2

58.0

14.8

1991

26.5

57.3

16.2

1992

26.4

57.1

16.5

1993

25.3

60.3

14.4

1994

21.9

62.7

15.4

1995

22.1

61.8

16.1

1996

21.7

62.9

15.4

1997

20.7

62.0

17.3

1998

19.6

61.1

19.4

1999

18.4

63.3

18.3

2000

17.8

61.3

20.9

2001

16.1

59.9

24.0

2002

17.4

55.8

26.6

2003

15.3

55.2

29.1

2004

19.7

58.3

21.7

2005

18.2

62.4

19.5

2006

20.0

59.5

20.5

2007

20.3

54.4

25.6

2008

15.9

57.3

26.8

2009

19.4

56.2

24.3

2010

21.1

54.8

24.2

2011

17.3

55.0

27.8

2012

12.6

57.9

29.4

2013

8.7

63.5

27.8

2014

10.7

60.9

28.4

2015

12.9

57.7

29.3

2016

12.6

59.5

27.9

2017

13.1

60.2

26.7

2018

12.2

59.2

28.6

2019

13.5

59.9

26.6

2020

14.2

56.8

29.0

2021

12.6

56.9

30.5

2022

14.9

54.9

30.2

 

Current R&D Expenditures by Performer

Rights holders report expenditures on research they conduct themselves (intramural) and research performed by other establishments, such as universities, hospitals, and other manufacturers (extramural).

Table 14 shows that 50.6% of 2022 current research expenditures were intramural. Research performed by other companies on behalf of rights holders made up 23.1% of current expenditures, while research conducted in universities and hospitals accounted for 14.5%.

Table 14. Current R&D Expenditures by R&D Performer, 2022 and 2021

R&D performer Expenditures: 2022 ($millions) Share: 2022 Expenditures: 2021 ($millions) Share: 2021 Annual change in expenditures

Intramural

Rights holders

$446.6

50.6%

$417.3

46.8%

7.0%

Extramural

Universities and hospitals

$128.4

14.5%

$147.9

16.6%

-13.2%

Other companies

$203.8

23.1%

$225.9

25.3%

-9.7%

Others

$104.0

11.8%

$101.4

11.4%

2.5%

Total*

$882.8

100%

$892.5

100%

-1.1%

* Values may not add to totals due to rounding.

Data source: PMPRB

Current R&D Expenditures by Region

Table 15 (as well as Tables 21 and 22 in Appendix 4) shows current R&D expenditures by region. As in previous years, current expenditures were heavily concentrated in Ontario and Quebec in 2022, with these provinces accounting for 77.4% of total expenditures.

Between 2021 and 2022, R&D expenditures increased at a year-over-year rate of 1.3% in the Atlantic provinces, 11.9% in Quebec, and 4.9% in Western Canada, and decreased at a rate of 10.0% in Ontario.

Table 15. Current R&D Expenditures by Region, 2022 and 2021

Region Expenditures: 2022 ($millions) Share: 2022 Expenditures: 2021 ($millions) Share: 2021 Annual change in expenditures

Atlantic provinces

$13.2

1.5%

$13.0

1.5%

1.3%

Quebec

$262.9

29.8%

$235.0

26.3%

11.9%

Ontario

$419.9

47.6%

$466.4

52.3%

-10.0%

Western provinces

$186.7

21.1%

$178.0

19.9%

4.9%

Territories

$0.1

0.0%

$0.1

0.0%

-0.3%

Total*

$882.8

100%

$892.5

100%

-1.1%

* Values may not add to totals due to rounding.

Data source: PMPRB

Total R&D Expenditures by Source of Funds

Table 16 provides information on the sources of funds used by rights holders to finance their R&D activity. Internal company funds remained by far the single largest source of funding in 2022, accounting for 90.6% of total expenditures. Funds received from government amounted to 0.6% of total expenditures.

Table 16. Total R&D Expenditures by Source of Funds, 2022 and 2021

Source of funds Expenditures: 2022 ($millions) Share: 2022 Expenditures: 2021 ($millions) Share: 2021 Annual change in expenditures

Company funds

$827.9

90.6%

$832.3

90.2%

-0.5%

Federal/provincial governments

$5.0

0.6%

$5.0

0.5%

1.1%

Others

$81.0

8.9%

$85.7

9.3%

-5.4%

Total*

$914.0

100%

$922.9

100%

-1.0%

* Values may not add to totals due to rounding.

Data source: PMPRB

The Global Context

Figure 35 compares Canadian pharmaceutical R&D–to–Sales ratios to those of the PMPRB11 in 2000, 2010, and 2020. These three years of data provide a snapshot of observed market trends over the past 20 years.

Starting in 2000, Canada had an R&D–to–sales ratio of 10.1%, lower than most PMPRB11 countries. Canada’s R&D–to–sales ratio moved down to 6.9% in 2010, below all PMPRB11 countries except for Italy at 6.2% and Spain at 6.5%. In 2020, Canada’s R&D–to–sales ratio dropped below that in Spain, becoming the lowest among all comparator countries at 3.4%.

The ratio obtained by aggregating R&D spending and sales across all PMPRB11 countries in 2020 was 19.8%, more than five times that in Canada. The R&D–to–sales ratios represented in Figure 35 may be compared to the average bilateral price ratios reported in Table 7 (see "Comparison of Canadian Prices to Foreign Prices").

A number of comparator countries with patented medicine prices that are, on average, lower than prices in Canada, have achieved much higher R&D–to–sales ratios.

There are a multitude of factors that drive the location of pharmaceutical R&D, including where companies can find the best science base at a reasonable cost and have ready access to a quality clinical trials infrastructure. Although price levels and intellectual property protection are often cited as an important policy lever for attracting R&D, the data has not supported this link domestically or internationally.

Figure 35. R&D–to–Sales Ratios, Canada and the PMPRB11, 2000, 2010, and 2020 figure 35

Note: R&D data for Australia was not publicly available.

Data source: PMPRB; European Federation of Pharmaceutical Industries and Associations (EFPIA): The Pharmaceutical Industry in Figures 2022; JPMA

Figure description

This bar graph depicts R&D-to-sales ratios for Canada and the PMPRB11 comparator countries for 2000, 2010, and 2020.

  R&D-to-sales ratio, 2000 (%) R&D-to-sales ratio, 2010 (%) R&D-to-sales ratio, 2020 (%)

Canada

10.1

6.9

3.4

Belgium

28.6

40.2

78.8

France

16.8

18.2

15.1

Germany

17.3

17.8

18.2

Italy

6.2

6.2

6.9

Japan

8.6

12.0

9.7

Netherlands

16.4

11.7

10.4

Norway

8.3

7.0

4.9

Spain

5.3

6.5

6.6

Sweden

44.4

31.1

24.2

United Kingdom

35.1

39.8

23.0

PMPRB11

18.7

19.1

19.8

 
The PMPRB7 average R&D ratio is more than 5x greater than in Canada.

The R&D-to-sales ratio obtained by aggregating R&D spending and sales across all 11 comparator countries in 2020 was 19.8%, compared to just 3.4% in Canada.

Appendix 1: Glossary

These definitions are provided for general assistance only; they have no legal force and should be read in conjunction with the applicable legislation.

Active Ingredient or Medicinal Ingredient: Chemical or biological substance responsible for the claimed pharmacologic effect of a medicine.

ATC: Anatomical Therapeutic Chemical (ATC) classification system, developed and maintained by the World Health Organization (WHO) Collaborating Centre for Drug Statistics Methodology, which divides medicines into different groups according to their site of action and therapeutic and chemical characteristics. This system is used by the PMPRB as a guide for selecting comparable medicines for purposes of price review under the Guidelines.

Drug Identification Number (DIN): A registration number (drug identification number) that the Health Products and Food Branch of Health Canada assigns to each prescription and non-prescription drug product marketed under the Food and Drug Regulations. A DIN uniquely identifies the following product characteristics: manufacturer; product name; active ingredient(s); strength of active ingredient(s); pharmaceutical dosage form; route of administration. Different strengths and dosage forms of a medicine may be assigned different DINs.

Drug Product: A particular presentation of a medicine characterized by its pharmaceutical dosage form and the strength of the active ingredient(s) (see "Medicine" below).

Failure to File: The complete or partial failure of a rights holder to comply with regulatory filing requirements pursuant to the Patent Act and the Patented Medicines Regulations.

Failure to Report: The complete failure of a patentee to have reported a patented medicine being sold in accordance with regulatory filing requirements pursuant to the Patent Act and the Patented Medicines Regulations.

License, Voluntary: A contractual agreement between a patent holder and a licensee under which the licensee is entitled to enjoy the benefit of the patent or to exercise any rights in relation to the patent for some consideration (e.g., royalties in the form of a share of the licensee’s sales).

Medicine: A medicinal ingredient and/or a substance or a mixture of substances manufactured, sold, or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, in human beings or animals; or restoring, correcting, or modifying organic functions in human beings or animals.

Notice of Compliance (NOC): A notice issued under section C.08.004 or C.08.004.01 of the Food and Drug Regulations. The issuance of an NOC indicates that a drug product meets the required Health Canada standards for use in humans or animals and that the manufacturer of the product is authorized to market the product in Canada.

Patent: An instrument issued by the Commissioner of Patents in the form of letters patent for an invention.

Patented Medicine Price Index (PMPI): The PMPI was developed by the PMPRB as a measure of average year-over-year change in the transaction prices of patented medicines sold in Canada, based on the price and sales information reported by rights holders.

Patentee: As defined by subsection 79(1) of the Patent Act, "the person for the time being entitled to the benefit of the patent for that invention and includes, where any other person is entitled to exercise any rights in relation to that patent other than under a license continued by subsection 11(1) of the Patent Act Amendment Act, 1992, that other person in respect of those rights”.

PMPRB7: France, Germany, Italy, Sweden, Switzerland, the United Kingdom, and the United States.

PMPRB11: Australia, Belgium, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden, and the United Kingdom.

Research and Development (R&D): Basic or applied research for the purpose of creating new, or improving existing, materials, devices, products, or processes (e.g., manufacturing processes).

Research and Development—Applied Research: R&D directed toward a specific practical application, comprising research intended to improve manufacturing processes, pre-clinical trials, and clinical trials.

Research and Development—Basic Research: R&D defined as work that advances scientific knowledge without a specific application in mind.

Research and Development—Other Qualifying: Eligible research and development expenditures that cannot be classified into any of the preceding categories of "type of research and development”. It includes regulatory submissions, bioavailability studies, and Phase IV clinical trials.

Research and Development Expenditures: For the purposes of the Patented Medicines Regulations, in particular Sections 5 and 6, research and development includes activities for which expenditures would have qualified for the investment tax credit for scientific research and experimental development under the Income Tax Act as it read on December 1, 1987.

Research and Development Expenditures–Current: Consist of the following non-capital expenses directly related to research work: (a) wages and salaries, (b) direct material, (c) contractors and subcontractors, (d) other direct costs such as factory overhead, (e) payments to designated institutions, (f) payments to granting councils, and (g) payments to other organizations. These elements are described in greater detail in the Patentees’ Guide to Reporting—Form 3, available on the PMPRB Website under Regulatory Filings.

Rights Holder: As defined by subsection 79(1) of the Patent Act, "a patentee and the person for the time being entitled to the benefit of a certificate of supplementary protection for that invention, and includes, if any other person is entitled to exercise rights in relation to the certificate, that other person in respect of those rights."

Special Access Programme (SAP): A program operated by Health Canada to give practitioners access to medicines that are not approved or otherwise available in Canada.

Voluntary Compliance Undertaking (VCU): A written undertaking by a patentee to adjust its price to conform to the Board’s Guidelines. A VCU represents a promise by a patentee geared towards a satisfactory resolution of an investigation initiated by Staff as per the Guidelines. A VCU takes into account the specific facts and underlying context of a particular case. As such, VCUs are not intended to have precedential value.

Appendix 2: Pharmaceutical Trends – Sales

Table 17. Sales of Patented Medicines, 1990 to 2022

Year Patented medicine 5-year compound annual growth rate Sales of patented medicines as a share of all medicine sales* Patented medicine sales per capita Change in patented medicine sales per capita Patented medicine sales per GDP
Sales ($billions) Change

2022

$18.4

5.7%

1.8%

49.0%

$465.12

2.0%

0.666%

2021

$17.4

-1.7%

2.2%

51.0%

$456.14

-3.3%

0.758%

2020

$17.7

3.0%

3.2%

55.4%

$472.00

2.9%

0.801%

2019

$17.2

3.5%

4.5%

57.5%

$458.60

2.7%

0.748%

2018

$16.7

-0.6%

4.5%

59.0%

$446.30

-1.7%

0.751%

2017

$16.8

7.6%

5.4%

61.5%

$454.09

5.4%

0.783%

2016

$15.6

3.3%

3.9%

60.8%

$430.94

2.2%

0.770%

2015

$15.1

9.4%

4.0%

61.6%

$421.80

8.5%

0.760%

2014

$13.8

3.1%

1.2%

59.9%

$388.70

1.8%

0.696%

2013

$13.4

4.2%

1.2%

60.7%

$381.80

2.7%

0.706%

2012

$12.9

0.1%

1.3%

59.2%

$371.80

-1.2%

0.708%

2011

$12.9

3.5%

2.0%

58.3%

$376.10

3.1%

0.729%

2010

$12.4

-4.3%

2.6%

55.8%

$364.70

-5.7%

0.746%

2009

$13.0

2.9%

4.4%

59.6%

$386.90

1.9%

0.829%

2008

$12.6

4.6%

5.4%

61.7%

$379.50

2.9%

0.762%

2007

$12.1

3.2%

6.3%

63.2%

$368.90

2.5%

0.769%

2006

$11.7

7.4%

9.0%

67.8%

$360.00

6.3%

0.784%

2005

$10.9

4.2%

11.6%

70.6%

$338.50

2.8%

0.769%

2004

$10.5

7.8%

14.2%

72.2%

$329.20

7.2%

0.789%

2003

$9.7

9.0%

17.7%

72.7%

$307.00

8.0%

0.776%

2002

$8.9

17.5%

19.2%

67.4%

$284.30

16.0%

0.748%

2001

$7.6

18.9%

20.4%

65.0%

$245.20

19.1%

0.666%

2000

$6.3

16.7%

19.4%

63.0%

$205.90

15.9%

0.571%

1999

$5.4

27.0%

17.6%

61.0%

$177.60

24.3%

0.538%

1998

$4.3

18.9%

12.4%

55.1%

$142.90

15.4%

0.459%

1997

$3.7

22.6%

11.0%

52.3%

$123.70

22.1%

0.409%

1996

$3.0

12.8%

8.4%

45.0%

$101.40

14.2%

0.350%

1995

$2.6

10.8%

8.9%

43.9%

$88.70

7.2%

0.314%

1994

$2.4

-2.1%

40.7%

$82.80

-1.4%

0.304%

1993

$2.4

9.4%

44.4%

$83.90

7.9%

0.322%

1992

$2.2

14.0%

43.8%

$77.70

8.8%

0.307%

1991

$2.0

13.1%

43.2%

$71.40

16.0%

0.286%

1990

$1.7

43.2%

$61.60

0.245%

* The denominator in this ratio comprises sales of patented and non-patented brand medicines and patented and non-patented generic medicines. Starting with the estimate for 2005, this value is derived from data contained in IQVIA’s MIDAS® database. In previous years, IQVIA data was used to calculate sales of generic medicines only, while sales of non-patented brand products were estimated from data submitted by rights holders. This approach was abandoned because of anomalies related to year-to-year changes in the set of companies reporting to the PMPRB. Ratios reported for years before 2005 likely overstate the patented share, but by only a small amount. This small bias in no way invalidates the strong upward trend evinced by the results for the years 1990 through 2003. Ratios since 2009 have also been revised slightly as a result of data updates from IQVIA—none of these adjustments resulted in a change greater than 0.4%.

Data source: PMPRB; MIDAS® database, 2005−2022, IQVIA (all rights reserved)

Appendix 3: Pharmaceutical Trends – Canadian List Price Comparisons

Figure 36. Average Ratio of 2022 List Price to Introductory List Price, by Year of Introductionfigure 36

Data source: PMPRB

Figure description

This bar graph depicts the average ratio of the 2022 price of a typical patented medicine to the introductory list price (the list price at which the medicine was sold in its first year on the Canadian market) for medicines introduced between 2002 and 2021. A line at 1.00 indicates the 2022 price.

For the currently patented medicines that were introduced in 2002, the average ratio of the 2022 list price to the introductory list price is 1.11;

2003: 1.02;
2004: 1.00;
2005: 1.04;
2006: 1.05;
2007: 1.14;
2008: 0.98;
2009: 1.09;
2010: 0.99;
2011: 1.03;
2012: 0.98;
2013: 0.96;
2014: 1.02;
2015: 1.05;
2016: 0.98;
2017: 1.00;
2018: 1.00;
2019: 0.99;
2020: 0.98;
2021: 1.02.

 

Table 18. Average Foreign–to–Canadian List Price Ratios, Bilateral Comparisons, Canada and the PMPRB11, 2022

  Canada Australia Belgium France Germany Italy Japan Spain Sweden Norway Netherlands United Kingdom

At market exchange rates

Average price ratio 2022

1.00

0.73

0.83

0.70

0.91

0.92

1.06

0.95

0.80

0.85

0.92

0.97

Average price ratio 2021

1.00

0.71

0.88

0.69

0.92

0.98

0.90

0.96

0.81

0.88

0.77

0.95

At purchasing power parities

Average price ratio 2022

1.00

0.69

0.99

0.86

1.08

1.27

1.23

1.35

0.82

0.70

1.04

1.09

Average price ratio 2021

1.00

0.67

1.03

0.85

1.11

1.25

0.98

1.32

0.86

0.82

0.86

1.08

Number of patented medicines compared 2022 (DINs)

982*

505

548

510

735

609

436

725

644

695

675

724

Sales ($millions)

$17,784.6

$14,419.6

$14,084.9

$11,574.8

$15,357.9

$14,462.5

$12,060.0

$14,305.0

$11,843.1

$15,303.0

$15,254.8

$15,216.5

Note: 2021 prices for Australia, Belgium, Japan, Spain, Norway, and the Netherlands were sourced from the IQVIA MIDAS® database.

* Consistent with the methodology used throughout the Pharmaceutical Trends section, only medicines that reported to the PMPRB in 2022 and had available Canadian sales data at the time of the analysis were considered here. For the list price analysis, only medicines from this group with a list price available in Canada were used. This is a subsection of the total number of medicines that reported to the PMPRB in 2022 and, as such, may not match the total reported in Table 4.

Data source: PMPRB; MIDAS® database, 2022, IQVIA (all rights reserved)

Figure 37. Average Foreign–to–Canadian List Price Ratios, Canada and the PMPRB11, 2013 and 2022 figure 37

Note: 2013 prices for Australia, Belgium, Japan, Spain, Norway, and the Netherlands are sourced from the IQVIA MIDAS® database.

Data source: PMPRB, MIDAS® database, 2013 and 2022, IQVIA (all rights reserved)

Figure description

This bar graph depicts the average foreign–to–Canadian list price ratios in 2013 and 2022 for the PMPRB11 comparator countries.

Country Average foreign–to–Canadian price ratio for 2013 Average foreign–to–Canadian price ratio for 2022

Canada

1.00

1.00

Australia

0.82

0.73

Belgium

0.74

0.83

France

0.77

0.70

Germany

1.14

0.92

Italy

0,85

0.91

Japan

1.01

1.06

Netherlands

0.74

0.92

Norway

0.70

0.85

Spain

0.73

0.95

Sweden

0.85

0.80

United Kingdom

0.79

0.97

 

Table 19. Average Foreign–to–Canadian Price Ratios, Multilateral Comparisons, 2022

  Median Minimum Maximum Mean

Average price ratio at market exchange rates

0.88

0.63

1.24

0.89

Average price ratio at purchasing power parities

1.00

0.63

1.54

1.02

Number of patented medicines

860

860

860

860

Sales ($millions)

$17,238.94

$17,238.94

$17,238.94

$17,238.94

Data source: PMPRB

Figure 38. Average Ratio of Median International Price (MIP) to Canadian List Price, at Market Exchange Rates, PMPRB7, PMPRB5, and PMPRB11, 2008 to 2022 figure 38

Note: PMPRB7 is France, Germany, Italy, Sweden, Switzerland, the United Kingdom (UK), and the United States (US). PMPRB5 removes Switzerland and the US. PMPRB11 is Australia, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, and the UK.

Data source: PMPRB; MIDAS® database, 2008–2022, IQVIA (all rights reserved)

Figure description

This line graph depicts the trend in the average MIP–to–Canadian price ratios from 2008 to 2022 with the list price in Canada set to a value of 1.00. Three trend lines are given, for the PMPRB7, PMPRB5, and PMPRB11 groups of comparator countries.

  Price ratio for PMPRB7 Price ratio for PMPRB5 Price ratio for PMPRB11

2008

1.02

0.83

0.88

2009

1.03

0.84

0.90

2010

1.01

0.81

0.85

2011

1.00

0.76

0.83

2012

1.01

0.71

0.79

2013

1.00

0.70

0.80

2014

1.02

0.73

0.83

2015

1.08

0.77

0.82

2016

1.09

0.78

0.85

2017

1.08

0.76

0.84

2018

1.07

0.75

0.87

2019

1.09

0.73

0.87

2020

1.10

0.77

0.86

2021

1.05

0.80

0.89

2022

1.04

0.86

0.88

Figure 39. Range Distribution, Share of Sales by MIP–to–Canadian List Price Ratio, 2022 figure 39

Data source: PMPRB

Figure description

This bar graph depicts the distribution of 2022 sales of patented medicines by their range of MIP–to–Canadian price ratio. List prices are used for Canada. Ratios between less than 0.50 and greater than 1.50 are given in increments of 0.05.

Patented medicines with price ratios less than 0.50 accounted for 4.0% of sales;
0.50 to 0.55: 2.4%;
0.55 to 0.60: 0.7%;
0.60 to 0.65: 3.2%;
0.65 to 0.70: 5.5%;
0.70 to 0.75: 12.8%;
0.75 to 0.80: 5.5%;
0.80 to 0.85: 8.9%;
0.85 to 0.90: 13.9%;
0.90 to 0.95: 13.5%;
0.95 to 1.00: 9.2%;
1.00 to 1.05: 8.2%;
1.05 to 1.10: 2.8%;
1.10 to 1.15: 1.3%;
1.15 to 1.20: 0.8%;
1.20 to 1.25: 1.4%;
1.25 to 1.30: 1.5%;
1.30 to 1.35: 1.7%;
1.35 to 1.40: 0.0%;
1.40 to 1.45: 0.6%;
1.45 to 1.50: 0.5%;
>1.50: 1.5%.

 

Appendix 4: Research and Development

Table 20. Range of R&D–to–Sales Ratios by Number of Reporting Companies and Total Sales Revenue, 2022 and 2021

Range: R&D–to–sales ratio Number of reporting companies: 2022 Sales revenues: 2022 ($millions) Share: 2022 (%) Number of reporting companies: 2021 Sales revenues: 2021 ($millions) Share: 2021 (%)

0%

43

$3,180.7

10.9%

44

$3,017.2

11.0%

≤10%

41

$24,328.1

83.5%

43

$23,160.3

84.3%

>10%

16

$1,636.1

5.6%

13

$1,301.0

4.7%

Total*

100

$29,144.9

100%

100

$27,478.5

100%

* Values may not add to totals due to rounding.

Data source: PMPRB

Figure 40. Current R&D Expenditures ($millions) by Type of Research, 1988 to 2022 figure 40

Data source: PMPRB

Figure description

This stacked bar graph depicts current R&D expenditures in millions of dollars from 1988 to 2022 by type of research: basic, applied, and other qualifying.

Year Basic research (millions of dollars) Applied research (millions of dollars) Other qualifying research (millions of dollars)

1988

$30.3

$106.6

$21.7

1989

$53.5

$143.1

$31.8

1990

$78.3

$167.2

$42.8

1991

$94.2

$203.5

$57.6

1992

$103.7

$224.1

$64.9

1993

$120.7

$290.9

$68.8

1994

$117.4

$336.5

$80.8

1995

$132.0

$369.3

$96.5

1996

$136.6

$369.4

$97.1

1997

$140.4

$421.3

$117.5

1998

$146.8

$458.0

$145.3

1999

$155.9

$535.2

$154.7

2000

$159.1

$547.2

$187.0

2001

$163.1

$604.8

$242.6

2002

$198.6

$637.0

$304.4

2003

$180.3

$631.5

$332.6

2004

$221.7

$658.3

$244.2

2005

$215.1

$737.5

$230.1

2006

$232.4

$689.6

$237.4

2007

$259.0

$688.2

$326.8

2008

$200.2

$723.2

$337.9

2009

$237.1

$685.3

$296.8

2010

$235.9

$613.4

$270.8

2011

$164.9

$525.1

$265.2

2012

$114.6

$525.5

$266.9

2013

$67.6

$492.2

$215.0

2014

$81.8

$467.4

$217.8

2015

$102.2

$456.2

$231.7

2016

$105.9

$500.9

$234.9

2017

$109.0

$501.9

$222.2

2018

$106.9

$517.1

$250.2

2019

$116.9

$520.2

$231.1

2020

$113.9

$455.4

$232.4

2021

$112.7

$507.7

$272.1

2022

$132.0

$484.4

$266.4

 

Table 21. Current of R&D Expenditures by Province/Territory, 2022

Province Expenditures: All patentees ($thousands) Regional share Expenditures: Innovative Medicines Canada ($thousands) Regional share

Newfoundland and Labrador

$1,254.08

0.142%

$729.09

0.100%

Prince Edward Island

$191.91

0.022%

$0.00

0.000%

Nova Scotia

$9,652.49

1.093%

$7,631.92

1.051%

New Brunswick

$2,077.18

0.235%

$1,540.88

0.212%

Quebec

$262,905.26

29.782%

$232,062.74

31.959%

Ontario

$419,925.56

47.570%

$321,473.70

44.272%

Manitoba

$4,632.47

0.525%

$2,679.43

0.369%

Saskatchewan

$1,740.10

0.197%

$460.96

0.063%

Alberta

$122,886.26

13.921%

$116,368.51

16.026%

British Columbia

$57,416.23

6.504%

$43,181.09

5.947%

Territories

$70.38

0.008%

$0.00

0.000%

Canada*

$882,751.92

100%

$726,128.32

100%

* Provincial/territorial values may not add to totals for Canada due to rounding.

Data source: PMPRB

Table 22. Current R&D Expenditures by Province/Territory, 2022

Province Rights holders Other companies Universities Hospitals Others

Newfoundland and Labrador

Expenditure ($thousands)

$633.19

$426.97

$62.52

$6.45

$124.95

Share

50.5%

34.0%

5.0%

0.5%

10.0%

Prince Edward Island

Expenditure ($thousands)

$93.39

$98.52

$0.00

$0.00

$0.00

Share

48.7%

51.3%

0.0%

0.0%

0.0%

Nova Scotia

Expenditure ($thousands)

$1,297.74

$2,501.16

$1,234.55

$424.24

$4,194.78

Share

13.4%

25.9%

12.8%

4.4%

43.5%

New Brunswick

Expenditure ($thousands)

$808.99

$562.35

$46.81

$168.71

$490.31

Share

38.9%

27.1%

2.3%

8.1%

23.6%

Quebec

Expenditure ($thousands)

$74,158.76

$94,019.32

$17,970.49

$26,519.88

$50,236.80

Share

28.2%

35.8%

6.8%

10.1%

19.1%

Ontario

Expenditure ($thousands)

$241,635.82

$76,592.97

$29,632.67

$38,395.55

$33,668.55

Share

57.5%

18.2%

7.1%

9.1%

8.0%

Manitoba

Expenditure ($thousands)

$2,769.04

$372.18

$687.27

$609.11

$194.88

Share

59.8%

8.0%

14.8%

13.1%

4.2%

Saskatchewan

Expenditure ($thousands)

$651.65

$507.02

$410.07

$0.00

$171.35

Share

37.4%

29.1%

23.6%

0.0%

9.8%

Alberta

Expenditure ($thousands)

$94,621.40

$14,344.37

$2,631.69

$4,360.46

$6,928.34

Share

77.0%

11.7%

2.1%

3.5%

5.6%

British Columbia

Expenditure ($thousands)

$29,869.61

$14,404.97

$2,615.83

$2,580.16

$7,945.67

Share

52.0%

25.1%

4.6%

4.5%

13.8%

Territories

Expenditure ($thousands)

$70.38

$0.00

$0.00

$0.00

$0.00

Share

100.0%

0.0%

0.0%

0.0%

0.0%

Canada*

Expenditure ($thousands)

$446,609.97

$203,829.83

$55,291.90

$73,064.56

$103,955.62

Share

50.6%

23.1%

6.3%

8.3%

11.8%

Note: For each jurisdiction, the share for each category represents the percentage of total R&D expenditures for the given province or territory (or nationally for the total R&D in Canada).

* Provincial/territorial expenditures may not add to totals for Canada and shares across individual rows may not add to 100% due to rounding.

Total R&D expenditures are the sum of current expenditures and capital expenditures (equipment + depreciation).

Data source: PMPRB

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