Canada: Countdown To July 1, 2020: Getting Ready For The New Patented Medicines Pricing Regime

Last Updated: September 26 2019
Article by Abigail Smith and Daphne Lainson

This morning, the long-awaited amendments to the Patented Medicines Regulations were published in Part II of the Canada Gazette. We have prepared an unofficial consolidated version of the Regulations incorporating the proposed amendments. The amended Regulations will come into force on July 1, 2020.

As we reported earlier this month, these amendments represent the first substantive revision to the Regulations since their introduction in 1987, and a significant departure from the existing framework. Major changes include:

  • The introduction of three new price regulatory factors;
  • A revised schedule of reference countries; and
  • Modified reporting requirements.

IMPACT:

Although the new law will not be in force until July 1, 2020, there are immediate implications. The amended Regulations will fully apply to all drugs for which a drug identification number (DIN) is assigned (following regulatory review) on or after today's date. For drugs assigned a DIN prior to today, there are certain grandfathering provisions.

The full impact of the Regulations will not be understood until the related guidance has been finalized and published. However, pharmaceutical patentees or licensees should be reaching out to their market access and regulatory teams in Canada now in order to prepare for the changed regime.

This article provides an overview of the new substantive requirements and timelines for reporting to help guide these discussions.

1. Reduced initial reporting requirements for drugs at low risk of excessive pricing

Section 3(3) of the old Regulations required information identifying the medicine (as outlined in 3(1)) to be provided no later than the earlier of (a) 7 days after the day on which the first notice of compliance (NOC) is issued in respect of the medicine and (b) 7 days after the day on which the medicine is first offered for sale in Canada.

This obligation has been qualified for certain medicines. Under new section 3(3.1), this information is only required on request for medicines that the Board views at low risk of excessive pricing ("low-risk medicines"): (a) non-prescription drugs (excluding biologics); (b) non-prescription drugs containing a controlled substance; (c) generics; and (d) veterinary drugs. Once requested, patentees must provide the information to the Board within 30 days.

For all other medicines, the 7-day reporting rule continues to apply. Thus, for example, for any drug first sold or receiving its first NOC on or after July 1, 2020, this reporting obligation will arise within 7 days.

2. Reduced biannual reporting requirements for drugs at low risk of excessive pricing

The Regulations require reporting on pricing and sales information:

  • From the day on which the medicine is first sold in Canada, within 30 days after that day; and
  • For each six-month period beginning on January 1 and July 1 of a given year, within 30 days after the end of that period.

These reporting obligations draw in the pricing information relating to the new "basket" of PMPRB11 countries noted in our earlier article.

These requirements also apply to all drugs at high risk of excessive pricing, and thus include not only drugs approved under the new regime but also drugs assigned a DIN prior to August 21, 2019. For these drugs, the first reporting may be due as early as 30 days after the new Regulations are in force.

Amended section 4(3) has expanded the categories of drugs exempt from biannual reporting of information to include all of the low-risk drugs noted above. This expands the current list by including, for example, non-prescription controlled substances and generic drugs. For these drugs, such information must be provided at the Board's request, but unlike the current law, that request need no longer be in response to a complaint.

3. Patentees will have to report confidential third-party rebates

Under the old Regulations, patentees were only required to report information on price adjustments for the first point of sale ("ex-factory" prices). Amended sections 4(4)(a) and (b) now expressly require this calculation to account for adjustments not only by the patentee, but by "any party that directly or indirectly purchases the medicine or reimburses for the purchase of the medicine and any reduction given to any party". This may include "free goods, free services, gifts or any other benefit of a like nature".

These new reporting requirements will apply to all drugs, including those assigned a DIN prior to August 21, 2019.

4. Timeline for and exemptions from providing cost-utility analyses for high-cost medicines

Pursuant to new section 4.1, patentees of high-cost medicines must provide to the Board every unredacted cost-utility analyses prepared by a publicly funded Canadian organization (e.g., CADTH or INESSS). The timeline for providing this information differs as between drugs offered for sale before and after the coming into force of the Regulations, and may be due as early as July 30, 2020.

Notably, this new requirement is subject to two important exceptions:

  • First, it applies only to drugs assigned a DIN on or after August 21, 2019.
  • Second, for low-risk medicines, this information is only required on request.

5. Timeline for and exemptions from providing market size information

Pursuant to new section 4.2, patentees must provide the Board with the estimated maximum use of the medicine in Canada. The timeline for providing this information differs as between drugs offered for sale before and after the coming into force of the Regulations, and may be due as early as July 30, 2020. Should the Minister of Health issue a NOC approving a new or modified therapeutic use of the medicine, the patentee must provide updated market size information to the Board within 30 days of that approval.

This section does not apply to drugs assigned a DIN before August 21, 2019, and the information need only be provided on request for low-risk medicines.

ACTION ITEMS:

We expect to see draft guidance in the early fall, which will inform the application of the amended Regulations. In the meantime, we recommend that counsel:

  • Arrange a meeting between patent and market access or regulatory teams to discuss the implications of the amended Regulations.
  • Stay tuned for the publication of draft guidance, and note the public comment period.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions