Final Patented Medicines Pricing Guidelines From The PMPRB Take Effect On January 1, 2026: What This Means For Innovative Pharma

Effective January 1, 2026, the Patented Medicine Prices Review Board (PMPRB) will implement new Guidelines for monitoring patented medicine prices in Canada. These Guidelines introduce a two-step review process designed to improve the predictability and administrative efficiency of the PMPRB's processes, while clarifying the PMPRB's role in monitoring rather than regulating prices.

While the Guidelines do not have the force of law, we anticipate that the PMPRB will adhere to them absent special circumstances.

Two-Step Review Process

Step 1: Initial and Annual Review

• PMPRB compares a patented medicine's Canadian list price to the Highest International Price (HIP) among the PMPRB11 countries [Australia, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, United Kingdom] and also compares price increases against the Consumer Price Index (CPI).
• The medicine is automatically flagged for In-Depth Review if either (1) the Canadian price exceeds the HIP or (2) the Canadian price increases more than CPI.

Step 2: In-Depth Review

• Scientific review: PMPRB identifies comparator drugs for each indication. Innovators may provide input (e.g., evidence of potential comparators, summaries of clinical evidence). Once complete, innovators receive comparator lists, references, and a rationale.
• Price review: Proceeds in parallel, with PMPRB weighing comparator costs based on "comparability scores" (i.e., the level of similarity between the patented medicine and comparator drugs).
• After review, PMPRB recommends either closing the In-Depth Review or moving towards a hearing. If closed, no further In-Depth Review will occur for at least two filing periods.
• The process can be resolved by an undertaking from the innovator (i.e., a unilateral commitment to adjust the price of a patented medicine and offset excess revenue).
• The process could take between 12 to 28 months, depending on complexity.

Hearing Process

• If recommended, the Chairperson decides whether to issue a Notice of Hearing within one month of an undertaking or no more than three months after receiving a recommendation for a hearing.
• Only a formal settlement can resolve the matter once a Notice of Hearing is issued. All accepted undertakings and settlements are publicly reported.
• PMPRB hearings are public and "de novo" proceedings, where the Hearing Panel considers all law and evidence independently to determine if prices are excessive. If so, the Hearing Panel may order price reductions or revenue offsets.

Transitional Rules

• New Medicines (first sold on or after July 1, 2022): First Initial Reviews to be completed in Spring 2026. Afterwards, Initial Reviews will be conducted after each semi-annual filing.
• Existing Medicines (first sold before July 1, 2022): Two-year transition period, with a first "abbreviated" Annual Review in 2028. Standard Annual Reviews will begin in 2029. During the transition period, only complaints or associated DINs trigger an In-Depth Review.

What's Changed?

• Jurisdiction and "Clinical Similarity": Principles from the Galderma decision are incorporated, strictly limiting jurisdiction to patented medicines and removing references to the PMPRB being able to assume jurisdiction based on "clinical similarity".
• Patent Dedication: The Guidelines no longer refer to "patent dedication". It is unclear whether the removal of this concept reflects a change in position at the PMPRB that patent dedication does not necessarily oust PMPRB jurisdiction.
• Price Identification Criteria: HIP replaces use of the Median International Price, with no reliance on pharmacoeconomic factors or market-size adjustments.
• Process Structure and Transparency: Two-step process with a focus on predictable timelines and increased visibility into the scientific review analysis.

Key Takeaways

• The new PMPRB Guidelines emphasize administrative efficiency and aim to provide increased predictability in the review of patented medicines.
• In-Depth Reviews are triggered by HIP exceedance, CPI increases, or approved complaints.
• Innovators can provide early input for a scientific review and within three months of being notified of an In-Depth Review for a price review. Existing Medicines (sold before July 1, 2022) have a two-year transition before review.

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