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

• The brand-name pharmaceutical industry has expressed concerns that the regulatory amendments could result in reduced pharmaceutical investments and reduced access to medicines. They have also filed legal proceedings. To date, the Federal Court ruled to maintain most of the Amendments, but struck down the collection of confidential rebate information. This ruling is currently the subject of an appeal by the applicants and cross-appeal by the Crown. In a separate challenge, the Court of Appeal of Québec found that the three new price regulatory factors and collection of confidential rebate information to be invalid. Neither party has decided to seek leave to appeal the decision to the Supreme Court of Canada, therefore those provisions would be of no force or effect in Québec.

• Canada has among the highest patented medicine prices in the world. Our Government’s focus remains on helping Canadians access the prescription medicines they need.
• In addition to these regulatory changes, the Government continues its work to streamline the approval of new drugs, advance on universal national pharmacare, develop a national strategy for drugs for rare diseases, and proceed with an ambitious biomanufacturing and life sciences strategy.
• These developments will improve the accessibility of new medicines for people in Canada and support the sustainability of the health care system, while at the same time supporting innovation and investment in the pharmaceutical sector.

IF PRESSED ON THE IMPACT OF THE COMING-INTO-FORCE OF THE AMENDMENTS…
• The Government is proceeding with implementing the new basket of comparator countries and reduced reporting requirements for medicines at lowest risk of excessive pricing on July 1, 2022.
• The modernized regulations will equip the Patented Medicine Prices Review Board (PMPRB) with updated tools to regulate excessive prices of patented medicines.
• This is expected to generate significant savings over the coming years, which will improve access for Canadians to quality medicines.

IF PRESSED ON THE AMENDMENTS NOT COMING-INTO-FORCE…
• The Government will not proceed with the Amendments related to the new price regulatory factors, nor with the requirements to file information net of all price adjustments.
• This will be reflected in Canada Gazette in late Spring 2022.
• The Government will continue its work to streamline the approval of new drugs, advance on universal national pharmacare, develop a national strategy for drugs for rare diseases, and proceed with an ambitious biomanufacturing and life sciences strategy.

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 indicated that special consideration would 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.
• The PMPRB has committed to launching consultations on a new and different set of Guidelines to operationalize the aspects of the Amendments that will come into force July 1, 2022.
• The Government looks forward to the results of the PMPRB’s consultation process.

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…
• 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.
• Budget 2021 announced significant investments to grow Canada’s life sciences and bio-manufacturing sector, providing a total of $2.2 billion over seven years towards growing a vibrant domestic life sciences sector.
• 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 WHETHER DECISION TO MOVE FORWARD WITH AMENDMENTS IS RELATED TO THE QUEBEC COURT OF APPEAL DECISION…
• Health Canada’s decision to move forward follows consultation with stakeholders in March 2022 and thoughtful analysis of the current environment as we transition to the ongoing management of COVID-19.
• Since the Amendments to the Patented Medicines Regulations were proposed in 2019, the pharmaceutical landscape has shifted dramatically, a new context has developed brought on by the pandemic, coupled with the progression of various initiatives seeking to improve accessibility and affordability for needed medicines.
• The way forward takes into consideration the launch of major new federal initiatives such as implementing national universal pharmacare.

IF PRESSED ON INNOVATIVE MEDICINES CANADA V. CANADA (ATTORNEY GENERAL) …
• This matter is before the courts and we are monitoring it closely.
• By proceeding forward with the new basket and reduced reporting requirements for medicines with lowest risk of excessive pricing, the Government can continue to protect Canadians from excessive prices of patented medicines.

IF PRESSED ON CONCERNS WITH THE PMPRB GUIDELINES CONSULTATION PROCESS…
• The PMPRB has committed to launching consultations on a new and different set of Guidelines to operationalize the aspects of the Amendments that will come into force July 1, 2022.
• The PMPRB’s upcoming consultation does not affect the coming into force of the revised Amendments.
• The Government looks forward to the results of the PMPRB’s consultation process.

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 original coming-into-force date of the regulatory amendments was delayed four times by six months due to considerations associated with the COVID-19 pandemic. 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. In June 2021, the coming-into-force was delayed further to January 1, 2022. More recently in December 2021, stakeholders were informed of another 6-month delay to July 1, 2022. These delays provide additional time for stakeholders to prepare for the new reporting obligations and to familiarize themselves with the final Guidelines, allowing them to continue to focus their efforts on combatting the pandemic. The most recent delay to the coming-into-force date of the Amendments acknowledged the continuing challenges presented by the pandemic, but also the evolution of the pharmaceutical landscape since the Amendments were first introduced, signalling the government’s openness to further discussion with stakeholders.

Since 2019, the pharmaceutical landscape has shifted dramatically, a new context has developed brought on by the COVID-19 pandemic, coupled with the progression of various initiatives seeking to improve accessibility and affordability for needed medicines. Health Canada took the opportunity in March 2022 to consult with stakeholders on a way forward. Further to these consultations, the Government announced on April 14, 2022, it is moving forward with the coming-into-force on July 1, 2022, of the new basket of comparator countries and reduced reporting requirements for medicines with lowest risk of excessive pricing of the Patented Medicine Regulations. The Government will not proceed with the Amendments related to the new price regulatory factors, nor with the requirements to file information net of all price adjustments. This will be reflected in the Canada Gazette in late spring 2022.

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. On December 17, 2021, the Board announced that it has decided not to proceed with the changes that were proposed in the Notice and Comment. Following the federal Minister of Health’s statement on April 14, 2022, which announced the Government’s intention related to the coming into force of the Amending Regulations, the PMPRB committed to launching consultations on a new and different set of Guidelines to operationalize the aspects of the Amending Regulations that will come into force July 1, 2022.

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. 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. Following this, the Court of Appeal of Québec on February 18, 2022, upheld the constitutionality of the existing regime and the validity of the updated basket of comparator countries, but found that the three new price regulatory factors in addition to the collection of confidential rebate information to be invalid. Neither party has decided to seek leave to appeal the decision to the Supreme Court of Canada.

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.
• The original coming-into-force date of the regulatory amendments was delayed four times by six months due to considerations associated with the COVID-19 pandemic. In December 2021, stakeholders were informed of another 6-month delay to July 1, 2022.
• The most recent delay provides additional time for impacted stakeholders to continue to focus their efforts on combatting the pandemic, but also recognizes the changing pharmaceutical landscape since the Amendments were first introduced and the need for additional discussions with stakeholders.
• Further to consultations with stakeholders in March 2022 on a way forward, Health Canada is moving forward with the coming-into-force on July 1, 2022, of the new basket of comparator countries and reduced reporting requirements for medicines with lowest risk of excessive pricing of the Patented Medicine Regulations.
• The Government will not proceed with the Amendments related to the new price regulatory factors, nor with the requirements to file information net of all price adjustments. This will be reflected in the Canada Gazette in late spring 2022.