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.
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.
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.