Question Period Note: MODERNIZATION OF THE PATENTED MEDICINE PRICES REVIEW BOARD (PMPRB)

• The brand-name pharmaceutical industry has challenged the Amendments in Court, and has expressed concerns that they could result in reduced pharmaceutical investments and reduced access to medicines. The Courts ruled to maintain most of the Amendments, but struck down the collection of confidential rebate information. The rulings are currently the subject of an appeal by the applicants and cross-appeal by the Crown.

KEY MESSAGES
• 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. Our Government’s focus remains on helping Canadians afford the prescription medicines they need.

• Canada will continue to be an important market for new medicines. New medicines are launched in major markets in very similar timeframes, including in countries with prices that are well below those in Canada. France, the United Kingdom, Italy and Norway are examples of this.
IF PRESSED ON THE ATIP RELEASE OF PMPRB’S COMMUNICATIONS PLAN…
• While we are aware of concerns from some stakeholders that regulatory changes will adversely impact drug launches in Canada, it is important to underscore that there is no evidence to substantiate such claims.
• Nevertheless, we recognize the pressing need to improve access and affordability of prescription drugs, particularly for many Canadians who require them to treat rare diseases, where the cost of these medications can be astronomically high.
• That is why our Government has engaged Canadians – especially patients with rare diseases, their families and their caregivers – in consultations to develop a national strategy for high-cost drugs for rare diseases.
IF PRESSED ON THE COMING-INTO-FORCE DATE…
• Health Canada is mindful of the ongoing impact of the COVID-19 situation, which is why the Government delayed the coming into force of the Amendments by another six months – until January 1, 2022.
• This delay provides industry with additional time to prepare for the new reporting obligations.
IF PRESSED ON 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.
• In its revised Guidelines, the PMPRB indicates that special consideration will be given to specified patented medicines authorized for use against COVID-19. This policy is 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.
• Under this approach, 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…
• 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.
• Our Government has also streamlined regulatory processes supporting faster access to the Canadian market for products.
IF PRESSED ON IMPACT OF 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…
• The Government of Canada is pleased that the courts have upheld the majority of the Amendments.
• As the matter is still before the court, no further comments will be made.
IF PRESSED ON CONCERNS WITH THE PMPRB GUIDELINES CONSULTATION PROCESS…
• The PMPRB has made revisions to its Guidelines in response to the significant stakeholder feedback it received.
• Moving forward, the PMPRB will seek to monitor and evaluate trends in the pharmaceutical market before and after the implementation of the new framework through the Guideline Monitoring and Evaluation Plan.

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. 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 21, 2019, the Government of Canada published the final Amendments in the Canada Gazette, Part II. At that time, the Amendments were scheduled to take effect on July 1, 2020.

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 November 21, 2019, the PMPRB launched consultations with stakeholders on the draft Guidelines that operationalize the Amendments. The PMPRB revised draft Guidelines on June 19, 2020 and published its updated Guidelines on October 23, 2020.
The coming-into-force date of the regulatory amendments was delayed three times in response to the increased demands and challenges on industry stakeholders due to COVID-19. On March 29, 2020, stakeholders were informed of an initial delay of 6 months to January 1, 2021. In December 2020, stakeholders were notified of another 6-month delay to July 1, 2021. Most recently, the coming-into-force was delayed further to January 1, 2022. These delays provide additional time for stakeholders to prepare for the new reporting obligations and to familiarize themselves with the final Guidelines.

In light of the second delay of the coming-into-force of the regulatory amendments, on January 15, 2021, the PMPRB initiated a stakeholder consultation on two consequential adjustments to their Guidelines. These two proposed adjustments pertain to the definition of Gap Medicines and compliance timelines. On March 17, 2021, the PMPRB published the Board’s decision to extend the definition of Gap Medicines to the new coming-into-force date of July 1, 2021, and to reduce the compliance timelines for Grandfathered and Gap medicines to meet the new maximum list prices to one filing period, so as to retain January 1, 2022 as the operative date for assessing compliance. On April 16, 2021, the Board revised its decision on the latter, reverting the compliance timeline back to two filing periods. Thus, the operative date for assessing compliance was shifted to July 1, 2022.
Following the third delay of the coming-into-force, on July 15, 2021, the PMPRB launched a Notice and Comment on proposed amendments to the Guidelines. The PMPRB proposed to change the definition of Gap medicines, the references to the comparator countries and the international price tests for Grandfathered medicines and their line extensions. No change to the compliance date was proposed, thereby retaining the operative date for Grandfathered and Gap medicines to meet the new maximum list prices as July 1, 2022. The deadline to submit feedback was August 31, 2021.
Moving forward, the PMPRB is putting in place a Guideline Monitoring and Evaluation Plan (GMEP) to assess the impact of its guidelines and inform any future adjustments required to ensure that they are working as intended. The GMEP will be used to monitor four different areas: impact on prices, impact on access, impact on the ecosystem and impact on PMPRB processes. For each of these four areas, the PMPRB, in consultation with its stakeholders, will identify relevant indicators to monitor. Baseline results (benchmarks) will be generated based on the years immediately preceding the coming-into-force of the Amendments. Starting with 2022, changes will be monitored on an ongoing basis and compared to the benchmarks to identify and evaluate any relevant changes in the trends in the data.

The Amendments have been challenged in the Federal Court and Superior Court of Quebec. In the Federal Court challenge, Innovative Medicines Canada and sixteen Canadian subsidiaries of brand-name companies filed an application for a judicial review of the Amendments. On June 29, 2020, the Court upheld most of the regulatory amendments, but struck down the collection of confidential rebate information. Similarly, on December 18, 2020, the Quebec Superior Court ruled to uphold the constitutionality of the existing PMPRB regime and the regulatory amendments, except the collection of confidential rebate information.

On September 17, 2020, to ease the regulatory pathway for drugs and medical devices urgently needed for COVID-19 diagnosis, treatment or management, the PMPRB issued a policy notice stating that special consideration would be given to specified patented medicines authorized for use against COVID-19. As such, patented medicines appearing on 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. This policy is reflected in the PMPRB’s final Guidelines.

KEY FACTS

• 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.