Undertakings and Settlement Proposals

An Undertaking is a written commitment by a Rights Holder to adjust the price of a patented medicine under review and to offset any revenues earned by the Rights Holder as the result of having sold the patented medicine at a higher price. As such, an Undertaking is not a binding determination by the Board and does not have precedential value for future decisions by the Board.

Because Undertakings are unilateral commitments from a Rights Holder, neither Staff nor the Chairperson provide Rights Holders with guidance on the substance of any proposed Undertaking, nor otherwise negotiate the terms.

Undertakings may be considered by the Chairperson when deciding whether to close a review or to issue a Notice of Hearing.

When can an Undertaking be submitted?

Rights Holders may submit an Undertaking at any point during the In-Depth Review and for two months after they are advised that Staff recommends a hearing to the Chairperson. Any Undertaking submitted is referred to the Chairperson. The Chairperson will render their decision on whether to close a review or to issue a Notice of Hearing no more than three months after receiving Staff’s recommendation.

Once a Notice of Hearing is issued, Undertakings can no longer be considered by the Chairperson, as their decision on whether to close the review or to issue a Notice of Hearing has already been made.

What are the main differences between an Undertaking and a Settlement Proposal?

An Undertaking is proposed before the issuance of the Notice of Hearing, during the In-Depth Review process.

A Settlement Proposal is proposed after the issuance of a Notice of Hearing. This is when a Rights Holder may seek to resolve the matter through a formal settlement. All proposed settlements must be presented to and approved by the Hearing Panel.

Negotiations and discussions with Staff regarding a settlement proposal may be conducted on a without prejudice basis and are subject to settlement privilege.

What information should I provide in an Undertaking or Settlement Proposal?

Potential information that may be provided in an Undertaking includes, but is not limited to, the following: a product summary, application of the Guidelines, position of the Rights Holder, and terms of the Undertaking.

The PMPRB reports publicly on all Undertakings accepted by the Chairperson and all settlements accepted by Hearing Panels. This information is included in the PMPRB’s Annual Report and published on the PMPRB website. It may also be published in the NEWSletter or other publications.