Question Period Note: Modernization of the Patented Medicine Prices Review Board (PMPRB)

On August 9, 2019, the Government of Canada announced amendments to the Patented Medicines Regulations to provide the PMPRB with the tools and information needed to protect Canadians from excessive medicine prices.

These amendments will result in lower prices for patented medicines in Canada, which are currently among the highest in the world. It is estimated that the amendments will result in savings for governments and private payers of approximately $13.2 billion over 10 years.

The brand-name pharmaceutical industry and some patient groups have expressed concerns that the amendments could result in reduced pharmaceutical investments and reduced access to medicines. On November 21, 2019, the PMPRB launched consultations on draft guidelines to operationalize the amendments.

• Will the amendments to the Patented Medicines Regulations reduce access to new medicines in Canada?

• Our Government is committed to improving Canadians’ access to, and the affordability of, necessary prescription medicines.

• These regulatory amendments will help Canadians to afford the prescription medicines they need.

• Canada will continue to be an important market for new medicines. In fact, many countries with much lower medicine prices gain access to new medicines in the same time frame, or even faster than Canada.

If Pressed on Impact on Pharmaceutical Investments in Canada

• Other countries benefit from significant pharmaceutical industry investments, while having considerably lower prices than Canada. For example, Belgium receives four times more investment dollars than Canada despite prices being 20% less.

• Our Government recognizes the importance of the life sciences sector to the Canadian economy, innovation, and quality of life. We remain committed to strengthening the innovation ecosystem in Canada.

• Our Government has also streamlined regulatory processes supporting faster access to the Canadian market for products, and significantly strengthened intellectual property protection in recent trade agreements.

If Pressed on Next Steps

• The PMPRB is consulting with stakeholders and the public on their accompanying Guidelines which will operationalize the regulatory amendments.

• The prices of patented medicines in Canada are regulated to be ‘non-excessive’ by the Patented Medicine Prices Review Board (PMPRB), a quasi-judicial federal agency created in 1987 under the Patent Act.

• On May 16, 2017, former Minister Philpott announced the Government of Canada’s intention to modernize the PMPRB’s regulatory framework through proposed amendments to the Patented Medicines Regulations.

• On August 9, 2019, the Government of Canada announced the final amendments which were then published on August 21, 2019 in Canada Gazette, Part II. The amendments are scheduled to take effect on July 1, 2020.

• The most significant reforms to the regulations since their introduction in 1987, these amendments lay the groundwork for national pharmacare by giving the PMPRB the tools to protect Canadians from excessive prices and making patented medicines more affordable.

• The amendments include three main elements:
o Providing the PMPRB with additional price regulatory factors that consider the price of patented medicines relative to their value and impact on the Canadian health care system;
o Requiring patentees to report Canadian price information that is net of all adjustments (e.g. rebates, discounts), so that the PMPRB is informed of actual market prices in Canada; and,
o Revising the “basket” of comparator countries, to include markets with comparable consumer protection priorities, economic wealth and medicine markets as Canada. Specifically, the list of countries has been updated to remove the U.S. and Switzerland, and to add Australia, Belgium, Japan, the Netherlands, Norway, and Spain.

• The Cost Benefit Analysis that accompanies these amendments estimates 10-year savings to Canadian consumers of $13.2B. This amounts to about a 10.8% reduction of patented medicine revenues in Canada by year ten after implementation.

• On August 23, 2019, five brand-name pharmaceutical firms (the Canadian subsidiaries of Merck, Janssen, Bayer, Boehringer Ingelheim, and Servier) filed a constitutional challenge against the amendments in the Superior Court of Quebec, arguing that the federal government does not have the constitutional authority to regulate pharmaceutical pricing, claiming that this authority rests within provincial jurisdiction.

• On September 2, 2019, Innovative Medicines Canada (IMC), which represents Canada’s brand-name pharmaceutical industry, and sixteen Canadian subsidiaries of brand-name pharmaceutical companies, filed an application for a judicial review of the amendments by the Federal Court of Canada.

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