On October 6, 2022, the Patented Medicine Prices Review Board (the "PMPRB") issued its Draft Guidelines 2022 (the "Draft Guidelines"), which would operationalize the revised amendments to the Patented Medicines Regulations. Notably, the Draft Guidelines reflect the new basket of comparator countries (the "PMPRB11") and reinstate the therapeutic comparison test for new medicines.

Here are some highlights from the Draft Guidelines:

Two Categories of Medicines: Medicines may be categorized as either "existing" or "new". The Draft Guidelines no longer refer to "grandfathered medicines", "line extensions", or "gap medicines".

Existing medicines include all dosage forms and strengths of medicines for which a Notice of Compliance (NOC) was issued prior to July 1, 2022, as well as new dosage forms and strengths of such medicines for which an NOC was issued on or after July 1, 2022. Existing medicines also include all dosage forms and strengths of medicines­ authorized for sale under the Special Access Programme prior to July 1, 2022. New medicines are defined as all other dosage forms and strengths of medicines that are not existing medicines.

Although the Draft Guidelines propose to apply less probing investigation criteria to existing medicines, the PMPRB Staff will apply the same regulatory scrutiny to existing or new medicines once an investigation is opened.

Criteria for Existing and New Medicines: An investigation into either an existing or new medicine may be opened if:

  • a complaint is received in respect of the pricing of the medicine; or
  • the list price increased by more than the changes in the Consumer Price Index; or
  • no international prices were filed by the rights holder.

Additional Criteria for Existing Medicines - Highest International Price Test: An investigation into an existing medicine may be opened if its list price exceeds the highest international price for the PMPRB11.

Additional Criteria for New Medicines - Median International Price Test and Therapeutic Comparison Test: An investigation into a new medicine may be opened if:

  • its list price exceeds the median international price for the PMPRB11; or
  • its list price falls between the median and the lowest international price for the PMPRB11, but exceeds the top of the domestic therapeutic class comparator prices ("dTCC"); or
  • its list price exceeds the midpoint between the top of the dTCC and the lowest international price for the PMPRB11, and the top of the dTCC is more than 50% lower than the lowest international price.

According to the Draft Guidelines, the PMPRB will no longer consider the therapeutic value of a drug, i.e., whether it is a breakthrough medicine or a slight to no improvement, the same criteria for an investigation will apply.

According to the Backgrounder issued with the Draft Guidelines: "For 'new medicines', a concerted effort has been made in the Draft Guidelines to devise criteria that will only trigger an investigation when at least two of the [Patent Act s.85] factors are engaged whenever possible. This should significantly reduce the number of overall investigations and enable staff to focus resources on cases where the potential risk of excessive pricing is highest."

Absence of Price Review Tests: The above criteria may trigger an investigation. However, in contrast to prior guidelines, the Draft Guidelines do not outline the price review tests that would be used to determine whether a price is excessive.

Rather, the Draft Guidelines indicate that, upon opening an investigation, the PMPRB Staff's analysis will focus on the strength of the evidence, the degree to which the price of the medicine deviates from the investigation criteria levels, the extent to which the facts are aligned with the jurisprudence interpreting the factors in section 85 of the Patent Act, and whether the investigation raises new or unique questions that warrant judicial elucidation.

Biosimilars and Vaccines: In response to feedback received from consultation on the 2020 Guidelines, the PMPRB's position is that an investigation into biosimilars and vaccines may be opened only when a complaint is received. The same criterion applies to medicines for veterinary use and over-the-counter medicines.

Timeline for Compliance: The PMPRB has indicated that it is committed to publishing final Guidelines by the end of the year and that Staff will wait until two reporting periods have passed, starting on the period during which the [final] Guidelines come into effect, to determine whether the investigation criteria for a patented medicine are met. Assuming the final Guidelines are in place for the reporting period beginning on January 1, 2023, then Staff will commence their evaluation for compliance starting in January 2024. If a price is then deemed excessive, there is nothing which prohibits the PMPRB from looking back at the first two reporting periods under the new Guidelines.

Consultation: The PMPRB has opened a consultation on the Draft Guidelines, and the deadline for written submissions is December 5, 2022. The Fasken Life Sciences team has substantial experience with the PMPRB reform. Contact us to discuss your submission.

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.