The Patented Medicine Prices Review Board ("PMPRB") is
responsible for ensuring that patentees are not selling medicines
at excessive prices in any market in Canada. This regulatory regime
is established pursuant to the Patent Act. The PMPRB has broad
powers to compel patentees to disclose pricing and other
information, and to order patentees to reduce the prices of
medicines when it finds that prices are excessive. The PMPRB's
Compendium of Policies, Guidelines and Procedures
("Guidelines") outlines how Board Staff reviews the
prices of patented drug products, and how it proceeds when a price
appears excessive. This includes in what circumstances Board Staff
will proceed with an investigation. The Guidelines are not binding,
but are intended to promote awareness and facilitate
The PMRPB implemented its currently revised Guidelines on January
1, 2010, following an extensive policy review and consultation with
stakeholders. As part of the Board´s ongoing commitment that
its framework continue to have a positive impact for consumers,
while recognizing the value that innovative medicines offer to
patients, the Board has enhanced its engagement policy with all
stakeholders. It is the Board´s intention that the Guidelines
be responsive, in an appropriate timeframe, to changes in the
environment it regulates; the regulatory burden be reduced, where
possible; and, the PMPRB continue to use its limited resources
efficiently. In furtherance of these objectives, the PMPRB has
recently announced two proposed changes to its Guidelines, and is
inviting public comment.
Currently the Guidelines provide that Board Staff will commence an
investigation into the price of a patented drug product when any of
the following criteria are met: (i) the National Average
Transaction Price or any Market-Specific Average Transaction Price
of a new drug product exceeds the Maximum Average Potential Price
during the introductory period by more than 5% ; (ii) the National
Average Transaction Price of an existing drug product exceeds the
National Non-Excessive Average Price by more than 5% ; (iii) excess
revenues for a new or existing drug product are $50,000 or more ;
or (iv) the PMPRB receives a complaint. The Board is now proposing
that for existing drug products, the PMPRB proposes eliminating the
5% investigation trigger at the national level in favour of a
"revenue trigger". Specifically, investigations will only
take place where excess revenues for a medicine are greater than
$50,000. This is intended to reduce the number of investigations.
We expect that industry will welcome this change.
Second, currently, where there is excess revenue but not enough to
trigger an investigation the excess can and must be addressed by
the patentee in the three years following determination or else it
faces the prospect of a Voluntary Compliance Undertaking (VCU ). If
a VCU is not agreed upon then the matter is referred to the Chair.
The PMPRB is proposing to eliminate this three year window,
potentially leading to a VCU or a reference to the Chair, and
replace it with an obligation for the patentee to eliminate the
excess in a timely manner. We expect that industry will also
welcome this change.
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