Question Period Note: Patented Medicine Prices Review Board

• The Patented Medicine Prices Review Board (PMPRB) is an independent quasi-judicial body that protects the interests of Canadian consumers by ensuring that the prices of patented medicines sold in Canada are not excessive.

• Health Canada supports and respects the PMPRB’s role as a strong, independent quasi-judicial body that protects the interests of Canadian consumers by ensuring that the prices of patented medicines sold in Canada are not excessive.
IF PRESSED ON HOW SAVINGS WILL BE ACHIEVED AS A RESULT OF AMENDMENTS TO THE PATENTED MEDICINES REGULATIONS

• In July 2022, amendments to the Patented Medicines Regulations came into force. These amendments were designed to provide the PMPRB with new tools to carry out its mandate of protecting Canadians from excessive prices for patented medicines and improve access for Canadians to quality medicines.
• The new amendments include an 11-country basket of comparator countries, which removes the United States and Switzerland and includes countries that are more like Canada economically and from a consumer price protection standpoint.
• The revised basket of comparator countries is estimated to have an impact on patented medicine expenditures by reducing spending by $2.9 billion over ten years. The way in which the PMPRB operationalizes the amendments through its Guidelines may impact projected benefits. The new basket is expected to result in lower drug prices for Canadians.
IF PRESSED ON THE HEALTH CANADA SUBMISSION OR QUESTIONS ABOUT ANY POTENTIAL INTERFERENCE IN THE BOARD’S DECISION
• PMPRB is an independent quasi-judicial body and is responsible for the development and implementation of its Guidelines. As stated in section 96(5) of the Patent Act, the PMPRB must consult with various parties, including the Minister of Health, before the issuance of any guidelines. It is in that context that former Minister of Health, Minister Duclos wrote to the chair of the PMPRB to share his views with respect to the proposed Guidelines.
• As part of the PMPRB’s consultation process, Health Canada sent a submission to the Board on December 5, 2022, asking it to consider pausing the consultation process, to allow time to work collaboratively with health system partners and stakeholders, including provinces and territories, to understand fully the short and long-term impacts of the proposed new Guidelines.
IF PRESSED ON IMPACT OF THE RESIGNATION OF PMPRB OFFICIAL
• Officials working as staff within the PMPRB are public servants, and the PMPRB is responsible for its own staffing. Questions about human resources and staffing at the PMPRB should be directed to PMPRB.
IF PRESSED ON PMPRB’S CURRENT CAPACITY TO PROTECT CANADIANS FROM EXCESSIVE PRICES OF PATENT MEDICINES
• The PMPRB was established under the Patent Act and reports into Parliament through the Minister of Health. It does and will continue to play an important role in exercising its authority as an independent body to oversee the prices of patented medicines in Canada and ensure that Canadians are not paying excessive prices.
• The PMPRB and its legal framework are an important part of the pharmaceutical landscape, and the Government of Canada is committed to the mandate of the PMPRB and its role in protecting consumers against excessive prices of patented medicines.
IF PRESSED ON GUIDELINES
• Health Canada supports and respects the PMPRB’s role as a strong, independent quasi-judicial body that protects the interests of Canadian consumers by ensuring that the prices of patented medicines sold in Canada are not excessive.
• Specific questions regarding next steps with respect to the Guidelines should be directed to PMPRB.
IF PRESSED ON THE PMPRB
• As an arm’s-length organization of the government, the PMPRB reviews the prices patentees charge for patented drug products in the Canadian market. The PMPRB can work with patentees to achieve voluntary price reductions, or the board can hold public hearings to determine whether a price is excessive, and (if so) order price reductions or the offset of excess revenues.
• Health Canada supports and respects the PMPRB’s role as a strong, independent quasi-judicial body that protects the interests of Canadian consumers by ensuring that the prices of patented medicines sold in Canada are not excessive.
IF PRESSED ON CONCERNS WITH IMPACTS ON REVENUE TO INDUSTRY AND DRUG ACCESS
• The Government of Canada understands the importance of the pharmaceutical sector and in supporting research and development in Canada. A balance between supporting innovation and improving the affordability and accessibility of patented drugs for Canadians is essential.
• Even with lower prices, revenues from patented drug sales are expected to continue growing over the next ten years in Canada.

The Patented Medicine Prices Review Board (PMPRB), an arm’s-length organization of the government, reviews the prices patentees charge for patented medicines available in the Canadian market to ensure that they are not being sold at a price that the PMPRB finds to be “excessive”. The PMPRB can work with patentees to achieve voluntary price reductions or hold public hearings to determine whether a price is excessive, and (if so) order price reductions or the offset of excess revenues.

The Minister of Health has the authority under the Patent Act to refer matters to the PMPRB, which in turn is required to inquire into the matter and report its findings back to the Minister. Additionally, the Minister is responsible for making recommendations to Cabinet on changes to the Patented Medicines Regulations (PMR), which form part of the PMPRB’s legislative framework.

On July 1, 2022, Health Canada’s amendments to the Patented Medicines Regulations (PMR) came into force. These amendments, including a new basket of comparator countries and reduced reporting requirements for those medicines at lowest risk of excessive pricing (e.g., over-the-counter drugs and generic medicines), provide the PMPRB with more updated tools to prevent excessive pricing for patented medicines. The price reporting requirements for the new basket of countries have been in force since July 1, 2022. The PMPRB has therefore received from regulated parties the new pricing information respecting the new basket of comparator countries for all of 2022.

The new basket of comparator countries removes the United States and Switzerland and includes countries with similar consumer protection priorities, economic wealth and marketed medicines as Canada. The basket now comprises of Australia, Belgium, Japan, Netherlands, Norway and Spain, along with France, Germany, Italy, Sweden and United Kingdom, which have always been included.

The total quantified benefit of the revised basket, calculated through a cost-benefit analysis conducted in 2017, estimated the impact of the regulatory amendment on patented medicine prices to be $2.9 billion over ten years (according to the June 2022 Regulatory Impact Analysis Statement). While the estimated impact for the cost-benefit analysis was conducted in a comprehensive manner using reasonable assumptions, some differences in the benefits and costs relating to the amendments that came into force can be expected.

In addition, the PMPRB's upcoming Guidelines that operationalize the regulatory amendments, the extent to which rights holders voluntarily comply with the Guidelines, and, the extent to which the Guidelines are an appropriate application of the Act and Regulations, may all have an impact on the projected benefits.

On June 30, 2022, in anticipation of the coming into force of the amendments to the PMR on July 1, 2022, the PMPRB published Interim Guidelines for establishing non-excessive prices for drugs launched during the period of time between the coming into force of the PMR and the publication of the Final Guidelines.

Subsequently, on October 6, 2022, Draft Guidelines were published with a 60-day Notice and Comment Period ending December 5, 2022. The PMPRB expressed the intention to issue Final Guidelines by the end of the year and have the Final Guidelines come into effect on January 1, 2023. In addition to the new Schedule of 11 comparator countries, the Draft Guidelines contained a number of substantive changes as part of the Board’s modernization efforts.

On November 10, 2023, the PMPRB released a Scoping Paper outlining themes and questions to inform its Guideline development. On December 5 and 6, 2023, interested stakeholders were invited to participate in a Policy Roundtable to discuss the paper further. In addition, the PMPRB received 70 written submissions in December 2023. Most submissions were put forth by Rights Holders and Industry Associations (51%), followed by patient advocacy groups (21%) and pharmacy and distributors (10%).

On November 28, 2022, the former Minister of Health wrote to the Acting Chairperson of the PMPRB asking that the Board consider pausing the consultation process to allow time to fully understand the short and long-term impacts of the proposed guidelines. This letter was written in context of section 96(5) of the Patent Act, which states that the PMPRB must consult with various parties, including the Minister of Health, before the issuance of any guidelines.

In December 2022, the PMPRB announced that it would not implement the proposed new Guidelines on January 1, 2023, as they had previously indicated. PMPRB communicated that the Interim Guidelines would remain in place until further notice. On June 20, 2023, the PMPRB published a proposed Amendment to the Interim Guidance regarding new medicines for a 60-day notice and comment period ending August 21, 2023. On September 27, 2023 the Board announced its decision to adopt the proposed Amended Interim Guidance, effective immediately. The Board also indicated its intention to launch an iterative consultation process, conducted in stages with stakeholders with an aim to develop new guidelines in 2024.

In December 2022, Mélanie Bourassa Forcier, Vice-Chairperson and Acting Chairperson of PMPRB, confirmed her resignation and in February 2023, Matthew Herder confirmed his resignation from the Board and published his resignation letter online. Douglas Clark, Executive Director (a public servant who reports to the Chairperson) announced that he would remain as a special advisor for a specified period, but resigned from his Executive Director position in February 2023.

In February 2023, the Government of Canada announced the appointment of Thomas J. Digby as the chairperson of the PMPRB and on August 10, 2023 Anie Perrault was appointed as the vice-chairperson of the Board. In October 2023 the Government of Canada announced appointments of Peter Moreland Giraldeau and Dr. Emily A. Reynen to the Board. All terms are for five years, following an open, merit-based and transparent selection processes.

On March 9, 2023, the Standing Committee on Health (HESA) adopted a motion to conduct a study on the PMPRB and invited the following witnesses, in addition to any further witnesses the committee may consider relevant: the Honourable Jean-Yves Duclos, then Minister of Health; Matthew Herder, former member of the PMPRB; Mélanie Bourassa Forcier, former acting chair, PMPRB; and Douglas Clark, former executive director, PMPRB.

On April 27, 2023, HESA commenced its study on the PMPRB. Then Minister Jean-Yves Duclos made a statement and, along with Deputy Stephen Lucas, Éric Belair and T. Nessim Abu-Zahra, answered questions. Mélanie Bourassa Forcier, former acting chairperson of the Board also made a statement and answered questions. The study continued on May 2, 2023, with Matthew Herder, former Board member, and Douglas Clark, outgoing executive director, PMPRB, each making opening statements and answering questions. On May 4, 2023 HESA passed a motion that witnesses produce correspondence they consider relevant to support their testimony to the committee. These documents have been published online.

On May 6, 2024, the HESA committee reported its findings and recommendations to the House and published its report entitled "The Patented Medicine Prices Review Board: Ensuring the Effectiveness of the Reform Process". HESA is requesting that the government table a comprehensive response to the report.

• On July 1, 2022, Health Canada’s amendments to the Patented Medicines Regulations (PMR) came into force. These amendments include a new basket of comparator countries and reduced reporting requirements for those medicines at lowest risk of excessive pricing (e.g., over-the-counter drugs and generic medicines).
• The Board of the PMPRB may issue non-binding Guidelines to operationalize the PMR. Since the coming into force of the regulatory amendments, no new Guidelines have been put in place. Interim Guidance to inform stakeholders of the approach for conducting price reviews during this period was adopted in July 2022 and updated in September 2023. A Guidance development process is now underway to implement regulatory amendments, and to give effect to the Board’s commitment to modernize and simplify its framework. The PMPRB wishes to finalize new Guidelines during 2024.
• The Board is conducting consultations, in stages, as part of its new Guidelines development process.
• As part of the ongoing process to update its Guidelines and informed by its late 2023 consultation efforts, the PMPRB plans to publish a Discussion Guide in summer 2024. The Discussion Guide will provide material to continue an informed, focused, and productive consultation.
• The Board subsequently intends to publish new draft Guidelines before the end of 2024 following due consideration of the feedback received on the two previous phases, before finalization and implementation, anticipated in 2025.
• The PMPRB is overseen by a Board, appointed by the Governor in Council. There are five current Board members: Chairperson Thomas Digby, Vice-Chairperson Anie Perrault, and members Carolyn Kobernick, Emily Reynen and Peter Moreland-Giraldeau.