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

• Why does the Government insist on continuing with the amendments to the Patented Medicines Regulations when it impacts Canadians’ access to new medicines?

• Our Government remains committed to increasing the affordability and accessibility of prescription drugs, including patented medicines, to improve the health of Canadians and better meet health care system needs.
• Canada has among the highest patented medicine prices in the world, and these high prices negatively affect the ability of patients to access new 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.

• As an arm’s-length organization of the government, the Patented Medicine Prices Review Board (PMPRB) reviews the prices patentees charge for patented medicines on the Canadian market. 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 direct the PMPRB to inquire into any matter regarding patented medicine prices 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, which inform how the PMPRB fulfills its mandate.

• On August 9, 2019, the Government of Canada announced the final amendments to the Patentend Medicines Regulations which were then published on August 21, 2019 in Canada Gazette, Part II. At that time, the amendments were scheduled to take effect on July 1, 2020.

• The most significant reforms to the Patentend Medicines Regulations since their introduction in 1987, these amendments lay the groundwork for national pharmacare by giving the PMPRB the tools and information to protect Canadians from excessive prices of patented medicines.

• The amendments include three main elements:
• 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;
• Requiring patentees to report Canadian price information that is net of all adjustments (e.g. rebates, discounts); and,
• Revising the “basket” of comparator countries, to include markets with comparable consumer protection priorities, economic wealth and medicine markets as Canada.
• 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. The hearing started on September 28, 2020 but following three days of hearing, the court was adjourned and will resume on November 17, 2020.

• 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. On June 29, 2020, the Federal Court issued a ruling in IMC v Canada that maintained most of the regulatory amendments, but struck down the collection of confidential rebate information. Either party can initiate an appeal in a split ruling, and on September 10, 2020, a Notice of Appeal was filed by IMC and a Notice of Cross-Appeal was filed by the Crown on September 21, 2020.

• On November 21, 2019, the PMPRB launched consultations on its accompanying Guidelines, which will define operational implementation of the amendments, including specific price tests that will be applied. The PMPRB’s consultation included numerous opportunities for stakeholder engagement and extended the consultation window to allow constructive engagements to continue.

• On March 29, 2020, stakeholders were informed that the coming-into-force of the regulatory amendments would be delayed by six months. The delay responds to the circumstances of COVID-19, including increased demands on industry stakeholders. It also resulted in additional time for stakeholders to engage with the PMPRB through its Guidelines consultation process, which was also disrupted by COVID-19. The amendments will now come-into-force on January 1, 2021.

• On June 19, 2020, the PMPRB released revised draft Guidelines, which operationalize the regulatory amendments, and undertook further consultations.

• The PMPRB published its final Guidelines on October 23, 2020.

• The PMPRB has indicated that patented medicines appearing on either the List of Drugs for Exceptional Importation and Sale or any list associated with other COVID-19 Interim Orders will not be subject to review or an investigation unless a complaint is received from either the federal Minister of Health or any of her provincial or territorial counterparts.

SYNOPSIS
• 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 prices of patented medicines. On October 23, 2020, the PMPRB published its final Guidelines to operationalize the amendments, which will come-into-force on January 1, 2021.
• 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 June 29, 2020, the Federal Court issued a ruling that maintained most of the regulatory amendments, but struck down the collection of confidential rebate information.
If Pressed on the Coming-into-Force Date

• The amendments were scheduled to come into force on July 1, 2020.

• The COVID-19 pandemic has increased demands on the pharmaceutical industry. For that reason, the Government delayed the coming into force of the amendments by six months—until January 1, 2021.

• This delay allowed manufacturers of patented drugs additional time to make any necessary adjustments to comply with the new regulatory regime.
If Pressed on the Access to COVID-19 Patented Medicines (Drugs and Vaccines):

• Our Government is committed to ensuring that Canadians have access to the drugs, vaccines and medical devices that are urgently needed in response to COVID-19.

• On September 17, 2020, the PMPRB issued a policy notice stating that special consideration would be given to specified patented medicines authorized for use in COVID-19. This policy notice was adopted as part of a government-wide effort to ease the regulatory pathway for drugs and medical devices urgently needed for COVID-19 diagnosis, treatment, mitigation or prevention.

• In this policy notice, the PMPRB indicated that certain patented medicines on lists published by Health Canada would not be subject to review or investigation unless a pricing complaint is received from myself or any of my provincial or territorial counterparts.
If Pressed on Concerns with Impacts on Revenue to Industry and Drug Access

• Even with lower prices, revenues from patented drug sales are expected to continue growing over the next ten years in Canada.

• Drug companies are expected to launch their products in Canada at the same rate as they do today. In fact, industry sponsored studies have found that many countries with lower prices than Canada have faster access to new medicines, including the Netherlands, Sweden, the United Kingdom and Norway.

• Our Government has also streamlined regulatory processes supporting faster access to the Canadian market for products.
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 strengthened intellectual property protection in recent trade agreements.
If pressed on recent litigation

• There are ongoing proceedings before the Federal Court of Appeal and the Superior Court of Québec.

• The PMPRB is aware of these proceedings and will take any decisions into account.
If Pressed on concerns with the PMPRB Guidelines Consultation Process

• The PMPRB has published all written submissions it received during its consultation with stakeholders and the public on the draft Guidelines.

• The PMPRB made revisions to the final Guidelines in response to the significant stakeholder feedback it received.

• The PMPRB published its final Guidelines on October 23, 2020.