PMPRB Submission – Executive Summary

Posted on June 29, 2017

Consultation Document, Protecting Canadians from Excessive Drug Prices
Patented Medicine Prices Review Board (PMPRB) and the Patented Medicines Regulations

Innovative Medicines Canada is the national voice of Canada’s innovative pharmaceutical industry. We advocate for policies that enable the discovery, development and commercialization of innovative medicines and vaccines that improve the lives of all Canadians. We support our members’ commitment to being valued partners in the Canadian health and regulatory system.

The patented prescription medicines regulated by the PMPRB are a vital part of our health systems, helping to prevent and cure disease as well as save lives. Developing and introducing new innovative treatments into Canadian health systems is critical. There is a demonstrable link between appropriate access to innovative medications and key health outcomes. Canada needs to establish clear policy objectives to set a pharmaceutical price ceiling mechanism that protects consumers while rewarding companies for introducing innovations. PMPRB’s processes could evolve to apply a proportional, risk-based approach to patented medicines in Canada.

The greatest challenge is to recognize the common objectives of all parties — payers, administrators, policy makers, healthcare professionals, patients, and industry. Health Canada has proposed significant regulatory changes but has not forecasted how the prices of patented medicines might change, how patients might be affected, how these price changes will affect the Canadian pharmaceutical market, or how it intends to measure and evaluate the outcomes of the proposals.

The Canadian pharmaceutical market is not homogeneous, and the impact of the proposed regulatory changes will be variable among products, classes, and patentees. The existing framework has encouraged companies to enter the Canadian marketplace, allowed companies to launch new products, and provided incentives for manufacturers to launch competing products within the same therapeutic classes. This has benefited Canadian patients, health systems, and the economy.

The Consultation Document Proposals will add significant complexity to the already complicated and lengthy process in Canada prior to a drug reimbursement decision.  A more straightforward approach is attainable. We recommend a broader, more positive policy focus grounded on the overarching objectives of facilitating access for Canadian patients to new innovative medicines, while also addressing the affordability concerns of Canadian governments. We have an unprecedented opportunity to materially enhance the health and wellbeing of all Canadians, and position the country as a leader in the knowledge economy. We are ready to engage in a new, collaborative, and mutually beneficial partnership.

Patients should have access to needed medicines without affordability as a barrier. At the same time, stakeholders should agree that competition and new product launches add value. This inclusive agenda would also help to support world-class clinical research infrastructure in Canada that would benefit patients while growing our dynamic life sciences ecosystem.

In the 30 years since PMPRB’s creation, many other agencies and processes have been established to support and improve the public-sector drug reimbursement decision process. These processes are thorough and intended to improve payer decisions and are often mandatory.

The PMPRB presently has substantial authority under the Patent Act and the Patented Medicines Regulations, including the ability to compel various types of information from market participants. These powers and the successful compliance record of industry over time need to be acknowledged. No specific examples have been cited where the current Regulations, Guidelines, and/or processes have been unable to address an excessively priced patented medicine.

With respect to the specific Proposals, there are significant questions about how they will be applied, how they link to each other, and how the modernized PMPRB would interact with other agencies and processes within the Canadian pharmaceutical policy system. As set out in the Consultation Document, the Proposals lack important details to allow robust analysis, and are potentially duplicative of existing aspects of the Canadian drug price regulation system. It is unclear whether the Proposals are proportionate to the degree and type of risk presented in the marketplace, or how costs or benefits of the Proposals will be allocated.

The potential for any patentee to price excessively is largely determined by the characteristics of the market for each individual drug, including the availability of comparator products and the size of the drug’s patient population. Other than one proposed change to the regulation of certain generic products, the Proposals apply universally across the PMPRB’s entire jurisdiction. This ’one size fits all’ approach does not reflect important market nuances which are relevant to a risk-based approach to regulation. Many products under PMPRB jurisdiction are subject to direct or indirect competition and/or clear external price signals, and should be subject to less regulatory oversight.

The Proposals represent an expansion of the regulatory tools to be employed by PMPRB to actively lower the price ceiling in Canada, but  there is no indication as to how the new factors will be applied in a risk-based manner. The application of the current factors together with the new factors will increase the overall level of complexity, and will likely result in greater uncertainty for both the PMPRB and its stakeholders. The new factors may also result in additional investigations and hearings. This would be an unnecessary and detrimental outcome, and one which appears inconsistent with creating a more risk-based system.

The Consultation Document asserts that a modification to the list of comparator countries is required. If a modification is necessary, Innovative Medicines Canada recommends that Canada benchmark against leading global economies and health systems, which accurately reflect our international status. For any comparator country selected, the selection criteria and method of application should be coherent and transparent, and there are compelling reasons to retain the United States as a comparator country.

Innovative Medicines Canada supports an evolution of PMPRB to apply a proportional, risk-based approach to all products within its jurisdiction. Innovative Medicines Canada is supportive of moving towards the greater use of Alternative Dispute Resolution type approaches as a tool available to the Board beyond the application of the Guidelines.

The tracking of the industry’s economic footprint should be updated to reflect its 21st century investments and contributions, and should be transitioned to a federal government department or agency that has both an interest and the policy tools to advance the sector.

A price ceiling establishes the maximum price that can charged for a regulated product. It does not prevent a supplier from pricing the product below this ceiling. However, the Consultation Document proposes amending the Regulations to require patentees to report all forms of indirect price reductions. The ability to negotiate confidential reduced prices has benefited Canadians. The systematic reporting of discounts risks undermining the system which has evolved for public plans to help manage their drug expenditures. Such reporting will result in an increased burden for both patentees and for the PMPRB.

Should Health Canada proceed with these proposals, the new regulatory powers should be applied prospectively and only to new products. This would avoid significant uncertainty with respect to the compliance status of currently regulated products. The introduction of new regulatory requirements should also be accompanied by adequate notice and transition time.

Read the full submission.

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