On May 16, 2012, a Report setting out the follow-up
recommendations of the DIP Working Group (DIP-WG) on the pilot
implementation of the DIP Methodology was released by the PMPRB. In
its report, the DIP-WG recommended that the Board adopt the DIP
Methodology on a permanent basis.
The DIP Methodology was introduced to address situations where
the price of a patented medicine increases in excess of that
allowable under the CPI-Adjustment Methodology due to a reduction
or termination of benefits to customers (i.e., any reduction given
as a promotion or in the form of rebates, discounts, refunds, free
goods, free services, gifts or any other benefits of a like
nature). Under the DIP Methodology, when a Market-Specific Average
Transaction Price of a drug product increases by more than that
allowable under the CPI-Adjustment Methodology and the patentee
provides the required evidence, the price of the drug product may
increase up to the highest Non-Excessive Average Price of another
class of customer without being presumed to be excessive, as long
as this price does not exceed the Highest International Price
Comparison test.
The DIP-WG was established to identify potential challenges, and
develop workable solutions, in implementing the DIP Methodology.
The challenges identified mainly involved the seemingly onerous
evidence requirements to invoke the DIP Methodology. In order to
simplify the evidence reporting task, the DIP-WG proposed that the
DIP Methodology be divided into two streams: (i) a Simplified DIP
Methodology with lower evidence requirements, for situations where
the National Average Transaction Price (N-ATP) of a patented drug
product does not exceed its Introductory Benchmark Price (IBP); and
(ii) a Regular DIP Methodology with greater evidence requirements,
to be considered in situations when the N-ATP of a patented drug
product is greater than its IBP. The Board chose to implement the
DIP-WG's recommendations on a one-year pilot basis.
Based on its assessment of the pilot implementation, the DIP-WG
concluded that the DIP Methodology is an effective solution to
address and resolve investigations arising from the reduction or
termination of benefits. Moreover, the DIP-WG reported that the
pilot application was generally a positive experience for both
patentees and Board Staff due to the less burdensome process to
request and invoke the DIP Methodology, standardized means to
report required evidence, and manageable and operationally
available evidence requirements.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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