Notice and Comment - On the change to the definition of Gap medicines, the references to the comparator countries and the international price tests for Grandfathered medicines and their line extensions

The notice and comment period for this matter is now closed.

Frequently Asked Questions

July  15, 2021 – The Patented Medicine Prices Review Board (PMPRB) invites stakeholders to comment on three proposed amendments to the new PMPRB Guidelines related to the decision to delay the coming-into-force date of the Regulations Amending the Patented Medicines Regulations (“Regulations”) a further six months, from July 1, 2021 to January 1, 2022.  The PMPRB proposed to change the definition of Gap medicines, the references to the comparator countries and the international price tests for Grandfathered medicines and their line extensions.  

The deadline to submit feedback was August 31, 2021.

Proposed Amendments to the July 1, 2021 Guidelines:

1. Definition of Gap Medicines

The definition of Gap medicines under the new Guidelines applies to medicines for which a DIN was assigned on or after August 21, 2019 and prior to July 1, 2021 and first sold in Canada prior to July 1, 2021. The PMPRB is proposing to extend the date on which the DIN was assigned and the date of first sale to the new coming-into-force date of January 1, 2022.

2. Comparator Countries

The comparator countries used under the new Guidelines are currently referred to as the “PMPRB11”. The PMRPB is proposing to refer to the comparator countries more by reference to the Schedule set out in the Regulations as the “Schedule Countries”.

3. International Price Tests for Grandfathered Medicines and their Line Extensions

Under the new Guidelines, the maximum list price (“MLP”) for Grandfathered and Line extensions is set by the lower of (1) the highest international price (“HIP”)  for the PMPRB11 countries for which the patentee has provided information; or (2) the medicine’s ceiling (e.g. the “NEAP”) under the Guidelines as they were prior to the issuance of these guidelines.

The PMPRB is proposing that the MLP for Grandfathered and their Line Extensions be set by the lower of (1) the MIP for the Schedule Countries for which the patentee has provided information for the reporting period ending June 30, 2021 under the Regulations that are currently in effect (SOR/2008-70, s.6); or (2) the medicine’s ceiling (e.g. the “NEAP”) under the Guidelines as they were prior to the issuance of these Guidelines. For Grandfathered and their Line Extension medicines first filed with the PMPRB for the reporting period(s) ending in December 31, 2021, or later, the MLP is set by the HIP for the Schedule Countries set out in the Regulations for which the patentee has provided information.

About the proposed consequential amendments

On October 23, 2020, the PMPRB published new Guidelines which give effect to the Regulations.  The coming into force of the Regulations has since been delayed by six months on three occasions and they are now slated to come into force on January 1, 2022, instead of the original coming-into-force date of July 1, 2020.

The Regulations were published in the Canada Gazette, Part II in August 2019 and are the first substantive update of the PMPRB’s regulatory framework in more than 30 years.  A year-long consultation on changes to the PMPRB’s Guidelines followed, culminating in the October 23, 2020 publication of the new Guidelines.  The proposed consequential changes to the new Guidelines described above are believed to be an appropriate response to the most recent six-month extension in the coming-into-force date of the Regulations, to January 1, 2022.  In particular, the changes in dates, terminology and transition measures address the need for further clarity at the Guidelines level where patentees are facing different international price information requirements and a widening “Gap” period due to the further delay to the regulatory amendments. No change to the compliance date is being proposed.

The PMPRB will carefully consider written feedback received from stakeholders before finalizing the proposed consequential changes. All feedback must be submitted in writing to pmprb.consultations.cepmb@pmprb-cepmb.gc.ca by August 15, 2021.

Side-by-side comparison of the proposed consequential amendments:

Paragraph in the Guidelines Final Guidelines
(March 17, 2021)
Proposed Changes
(Consultation Draft)

Gap Medicines

35. Gap medicines are medicines for which a DIN was assigned on or after August 21, 2019 and prior to July 1, 2021 and first sold in Canada prior to July 1, 2021.

35. Gap medicines are medicines for which a DIN was assigned on or after August 21, 2019 and prior to January 1, 2022 and first sold in Canada prior to January 1, 2022.

Comparator Countries

25 (3rd bullet). Prescribed information relating to the price of a patented medicine, such as information concerning the price at which each dosage form and strength of the medicine is or has been sold in any market in Canada or in any of the eleven countries set out in the Regulations (the “PMPRB11”); or

25 (3rd bullet). Prescribed information relating to the price of a patented medicine, such as information concerning the price at which each dosage form and strength of the medicine is or has been sold in any market in Canada or in any of the comparator countries set out in the Regulations (the “Schedule Countries”); or

Comparator Countries

40. At introduction (i.e. upon the first sale in any market in Canada), an interim Maximum List Price ceiling is set (the “iMLP”) for the sale of the medicine. The iMLP is set by the median international publicly available ex-factory list price (“MIP”) for the PMPRB11 countries for which the patentee has provided information during the interim period (defined below). The list price of a medicine can be no higher than the iMLP for the interim period, failing which it may be subject to additional review or investigation by Staff.

40. At introduction (i.e. upon the first sale in any market in Canada), an interim Maximum List Price ceiling is set (the “iMLP”) for the sale of the medicine. The iMLP is set by the median international publicly available ex-factory list price (“MIP”) for the Schedule Countries for which the patentee has provided information during the interim period (defined below). The list price of a medicine can be no higher than the iMLP for the interim period, failing which it may be subject to additional review or investigation by Staff.

Comparator Countries

41. If the patentee has not filed international price information for the PMPRB11 countries after two reporting periods (i.e. the introductory period in which the medicine is sold in Canada and one subsequent period), the iMLP is set by the top of the domestic Therapeutic Class Comparison (“dTCC”). The dTCC will be calculated based on the highest cost of treatment among the comparator medicines, derived by taking into account the lowest price of the comparator medicine(s) (see Appendix A for further details). If there are no domestic therapeutic class comparators, the iMLP may be set by the median of the international Therapeutic Class Comparison (“iTCC”).

41. If the patentee has not filed international price information for the Schedule Countries after two reporting periods (i.e. the introductory period in which the medicine is sold in Canada and one subsequent period), the iMLP is set by the top of the domestic Therapeutic Class Comparison (“dTCC”). The dTCC will be calculated based on the highest cost of treatment among the comparator medicines, derived by taking into account the lowest price of the comparator medicine(s) (see Appendix A for further details). If there are no domestic therapeutic class comparators, the iMLP may be set by the median of the international Therapeutic Class Comparison (“iTCC”).

Comparator Countries

42. The iMLP is calculated once and only applies during the interim period, which lasts until the earlier of:

  1. three (3) years from the date of the introduction of the medicine in Canada; or
  2. when the patentee has filed international price information for at least five (5) of the PMPRB11 countries.

At the end of the interim period, the MLP will be set (see Step 2), and the iMLP will cease to apply.

42. The iMLP is calculated once and only applies during the interim period, which lasts until the earlier of:

  1. three (3) years from the date of the introduction of the medicine in Canada; or
  2. when the patentee has filed international price information for at least five (5) of the Schedule Countries.

At the end of the interim period, the MLP will be set (see Step 2), and the iMLP will cease to apply.

Comparator Countries

43. If, at introduction, the patentee files international price information for at least five (5) of the PMPRB11 countries, the iMLP does not apply and the MLP is set immediately (see section below).

43. If, at introduction, the patentee files international price information for at least five (5) of the comparator countries, the iMLP does not apply and the MLP is set immediately (see section below).

Comparator Countries

A. Step 2 (b). List Prices of the patented medicine in the PMPRB11

A. Step 2 (b). List Prices of the patented medicine in Schedule Countries

Comparator Countries

54. When comparing prices of a medicine in Canada with prices in the PMPRB11, the local currency is converted into Canadian dollars using exchange rates calculated as the simple average of the thirty-six (36) monthly average noon spot exchange rates for each country (taken to eight (8) decimal places) as published by the Bank of Canada. During a medicine’s introductory period, the thirty-six (36) months ending in the second month of the previous reporting period (i.e., February or August) will be used. Subsequently, the thirty-six (36) months ending in the second month of the reporting period under review will be used.

54. When comparing prices of a medicine in Canada with prices in the Schedule Countries, the local currency is converted into Canadian dollars using exchange rates calculated as the simple average of the thirty-six (36) monthly average noon spot exchange rates for each country (taken to eight (8) decimal places) as published by the Bank of Canada. During a medicine’s introductory period, the thirty-six (36) months ending in the second month of the previous reporting period (i.e., February or August) will be used. Subsequently, the thirty-six (36) months ending in the second month of the reporting period under review will be used.

Comparator Countries

73. The MLP for Gap medicines is set by the lower of

  1. the MIP for the PMPRB11 countries for which the patentee has provided information; or
  2. the medicine’s ceiling (e.g. the “NEAP” or the “MAPP”) under the Guidelines as they were prior to the issuance of these Guidelines.

74. The MLP for Gap medicines is set by the lower of

  1. the MIP for the Schedule Countries for which the patentee has provided information; or
  2. the medicine’s ceiling (e.g. the “NEAP” or the “MAPP”) under the Guidelines as they were prior to the issuance of these Guidelines.

Comparator Countries

75. For Grandfathered, Line Extension and Gap medicines, if the MLP is set by the medicine’s NEAP and if there is evidence that its calculation was significantly impacted by the reporting of benefits, the patentee may submit a request for the MLP to be set higher. Any such request must include details and supporting documentation of the reported benefits and, where available, a history of the medicine’s list price changes, as well as any other relevant information requested by Staff. If the requisite information supports a reassessment, the MLP will be adjusted to the lower of (i) the applicable international price test for the PMPRB11 countries for which the patentee has provided information, or (ii) the highest compliant list price of the medicine under the Guidelines as they were prior to the issuance of these Guidelines.

76. For Grandfathered, Line Extension and Gap medicines, if the MLP is set by the medicine’s NEAP and if there is evidence that its calculation was significantly impacted by the reporting of benefits, the patentee may submit a request for the MLP to be set higher. Any such request must include details and supporting documentation of the reported benefits and, where available, a history of the medicine’s list price changes, as well as any other relevant information requested by Staff. If the requisite information supports a reassessment, the MLP will be adjusted to the lower of (i) the applicable international price test for the Schedule Countries for which the patentee has provided information, or (ii) the highest compliant list price of the medicine under the Guidelines as they were prior to the issuance of these Guidelines.

Comparator Countries

XIII. Appendices

A.  Domestic Therapeutic Class Comparison (dTCC) and International Therapeutic Class Comparison (iTCC)
iTCC test

As described in section V of these Guidelines, the international Therapeutic Class Comparison (“iTCC”) test may be used in certain circumstances. The iTCC test compares a patented medicine’s list price with the list prices of other medicines identified by scientific review for comparison purposes in the eleven (11) comparator countries listed in the Regulations.

XIII. Appendices

A.  Domestic Therapeutic Class Comparison (dTCC) and International Therapeutic Class Comparison (iTCC)
iTCC test

As described in section V of these Guidelines, the international Therapeutic Class Comparison (“iTCC”) test may be used in certain circumstances. The iTCC test compares a patented medicine’s list price with the list prices of other medicines identified by scientific review for comparison purposes in the Schedule Countries listed in the Regulations.

Price Tests for Grandfathered Medicines and their Line Extensions

71. The MLP for Grandfathered and Line Extension medicines is set by the lower of

  1. the HIP for the PMPRB11 countries for which the patentee has provided information; or
  2. the medicine’s ceiling (e.g. the “NEAP”) under the Guidelines as they were prior to the issuance of these Guidelines.

71. The MLP for Grandfathered and Line Extension medicines is set by the lower of

  1. the MIP for the Schedule Countries for which the patentee has provided information for the reporting period ending June 30, 2021 under the Regulations that are currently in effect (Schedule as per SOR/2008-70, s.6); or
  2. the medicine’s ceiling (e.g. the “NEAP”) under the Guidelines as they were prior to the issuance of these Guidelines.

72. For Grandfathered and their Line Extension medicines first filed with the PMPRB for the reporting period(s) ending in December 31, 2021, or later, the MLP is set by the HIP for the Schedule Countries set out in the Regulations for which the patentee has provided information.

Price Tests for Grandfathered Medicines and their Line Extensions

The HIP and list prices for Grandfathered and Line Extension medicines will be calculated in the same manner as for New medicines under these Guidelines (see section V(A), “Price Review Process for New Medicines”).

The international price and list prices for Grandfathered and Line Extension medicines will be calculated in the same manner as for New medicines under these Guidelines (see section V(A), “Price Review Process for New Medicines”).

Price Tests for Grandfathered Medicines and their Line Extensions

Table F. Summary of Compliance Timelines
Tests used for the MLP (3 years or 5 countries min)

 

New Guidelines

Grandfathered

Lower of NEAP and HIP

Line extension of Grandfathered

Lower of list and RR or level pricing subject to HIP

Table F. Summary of Compliance Timelines
Tests used for the MLP (3 years or 5 countries min)

 

Proposed Change

Grandfathered and line extensions of Grandfathered medicines

Lower of NEAP and the applicable price test for the Schedule Countries for which the patentee has provided information

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