Decision resulting from the consultation on the PMPRB Price Review Approach During the Interim Period following publication of Amendments to the Patented Medicines Regulations

On June 30, 2022, the PMPRB issued a Notice and Comment on its proposed approach for reviewing the prices of patented medicines during the period between the coming into force of the recently amended Patented Medicines Regulations on July 1, 2022 and the publication of its new Guidelines, which is slated for end of 2022 (“Interim Period”). The Notice and Comment period closed on July 18, 2022, and the submissions received during the comment period are available on the PMPRB’s website.

A total of 37 submissions were received in response to the Notice and Comment. The majority of submissions were from pharmaceutical companies and their industry associations. The remaining submissions came from consumer and patient advocacy groups, distributors and pharmacies, provincial governments, and a consultant. Many of the submissions included feedback directed at issues arising from the PMPRB’s planned consultation on the new Guidelines in the fall, which is beyond the scope of the Notice and Comment. While the Board’s decision is limited to issues that arise from the need for guidance during the Interim Period, to the extent this other feedback becomes relevant to issues being consulted on in the fall, it will form part of the Board’s considerations.

After carefully considering all the submissions, the Board has decided to proceed with the interim guidance as proposed in the Notice and Comment, with the following clarifications.

Interim Guidance

During the Interim Period, the price of a patented medicine will not trigger an investigation if: 1) its national average transaction price (N-ATP) remains at or below the NEAP (Non-Excessive Average Price) as projected in the most recent compliance letter from PMPRB staff to the relevant patentee, and; 2) its list price does not increase. For greater clarity, an increase in the list price of a medicine will not trigger an investigation if it was taken in accordance with the CPI-based price-adjustment factors during the first filing period of 2022.

Medicines without a MAPP (Maximum Average Potential Price) or NEAP as of July 1, 2022, will not be subject to price review by PMPRB Staff during the Interim Period. Furthermore, once new Guidelines are in place, no potentially excess revenues will be calculated by Staff retrospectively for any such medicines for sales made during the Interim Period.

For ease of reference, the following table compares the wording of the proposed price review approach during the Interim Period to the provisions as they now are as a result of the Board’s decision:

FAQs

How can patentees know what the NEAP is that will apply to the price of a medicine during the Interim Period?

In February and March of 2022, patentees received letters from Board Staff which identified the projected NEAP for their medicines. These NEAPs are calculated based on CPI-based price-adjustment methodology increases. These NEAPs will remain in place for the entirety of the Interim Period.

Will the NEAPs continue to apply to the price of medicines if new Guidelines are not in place by the end of 2022?

The PMPRB is committed to completing the consultation process and issuing new Guidelines before January 1, 2023. If it is necessary to extend the Interim Period beyond that date because the Guidelines are not yet in place, the PMPRB will revisit this issue.

How will the PMPRB address the value of free and compassionate goods during the Interim Period?

Nothing has changed in this regard. Subsection 4(4) of the Patented Medicines Regulations provides that, in calculating the average price per package or net revenues, the actual price or actual revenue after any reduction including rebates, discounts, refunds, free goods, free services, gifts or any other benefit of a like nature and after the deduction of federal sales taxes shall be used.

Will HDAP meetings continue on their current timelines for new (and future) medicines?

For the moment HDAP meetings will continue as scheduled. That said, new medicine reviews will not be conducted until such time as new Guidelines are finalized.