Cana­da’s drug price re­forms de­layed to 2021

Amend­ments to Cana­da’s Patent­ed Med­i­cines Reg­u­la­tions will now be put in place 1 Jan­u­ary 2021, de­lay­ing im­ple­men­ta­tion of the sweep­ing drug pric­ing re­forms by six months.

The new time­line rep­re­sents a fur­ther ad­just­ment from the sched­ule laid out in 2017, when Health Cana­da first pro­posed over­haul­ing its drug pric­ing re­view process.

Draft pric­ing guide­lines pro­mul­gat­ed by the gov­ern­ment of Cana­da’s Patent Med­i­cine Prices Re­view Board (PM­PRB) have been avail­able for stake­hold­er and pub­lic con­sul­ta­tion since No­vem­ber 2019. Based on this feed­back, the PM­PRB will re­lease a fi­nal set of re­vised guide­lines the week of 15 June 2020, with a 30-day pe­ri­od of pub­lic writ­ten con­sul­ta­tion to fol­low.

The pro­posed guide­lines change the ref­er­ence coun­tries the PM­PRB will use for price-set­ting – “so that prices here are judged against coun­tries that ac­tu­al­ly look like Cana­da in terms of pop­u­la­tion, econ­o­my and ap­proach to health care,” ex­plained Health Cana­da when the guide­lines were made avail­able for con­sul­ta­tion in 2019. The pric­ing changes are part of the larg­er Health Cana­da goal of im­ple­ment­ing a “Na­tion­al Phar­ma­care” pro­gram.

The amend­ments will al­so give PM­PRB ac­cess to Cana­di­an mar­ket prices of med­i­cines, rather than just list prices.

The pric­ing re­view al­go­rithm pro­posed in the guide­lines grand­fa­thers med­i­cines that re­ceived a Drug In­for­ma­tion Num­ber (DIN) for a med­i­cine’s par­tic­u­lar strength and form be­fore 21 Au­gust 2019, dis­tin­guish­ing them from those that did not have a DIN by that date.

For grand­fa­thered patent­ed med­i­cines, the pric­ing re­view con­sid­ers past pric­ing, pric­ing of that med­i­cine and of med­i­cines of the same ther­a­peu­tic class in Cana­da and in oth­er coun­tries, and con­sumer price in­dex changes.

For med­i­cines that are not grand­fa­thered, ad­di­tion­al fac­tors to be con­sid­ered in the pric­ing re­view in­clude the med­i­cine’s phar­ma­coeco­nom­ic val­ue in Cana­da, the Cana­di­an mar­ket size, and Cana­da’s gross do­mes­tic prod­uct (GDP) and GDP per capi­ta.

The pric­ing re­view process for non-grand­fa­thered med­i­cines breaks out “Cat­e­go­ry I” drugs, with an an­nu­al cost and es­ti­mat­ed mar­ket size that fall above a cer­tain thresh­old, from all oth­er patent­ed med­i­cines, which fall in­to “Cat­e­go­ry II.”

Non-grand­fa­thered patent med­i­cines can un­der­go pric­ing re­assess­ment if ap­proved for a new in­di­ca­tion, among oth­er fac­tors.

The pro­posed guide­lines al­so pro­vide for staff in­ves­ti­ga­tions of med­i­cine pric­ing that can be trig­gered by pric­ing ap­pear­ing to ex­ceed the ap­plic­a­ble price ceil­ing by greater than 5%, by an ap­par­ent po­ten­tial ex­cess rev­enues from the above-ceil­ing pric­ing that ap­pears to ex­ceed CAD $50,000 per year, or if a com­plaint is filed.

An in­ves­ti­ga­tion may re­sult in a Vol­un­tary Com­pli­ance Un­der­tak­ing, a hear­ing, or clo­sure of the in­ves­ti­ga­tion. Ac­cord­ing to the draft guide­lines, a paten­tee is not ad­mit­ting that their patent­ed med­i­cine price is ex­ces­sive by en­gag­ing in a Vol­un­tary Com­pli­ance Un­der­tak­ing. How­ev­er, nei­ther does the PM­PRB’s con­sid­er­a­tion of an un­der­tak­ing mean that the price is not ex­ces­sive. All un­der­tak­ings will be pub­licly re­port­ed.

“The fi­nal Guide­lines will in­clude tran­si­tion­al mea­sures which will pro­vide paten­tees suf­fi­cient time to take the nec­es­sary steps to come in­to vol­un­tary com­pli­ance with the rel­e­vant price ceil­ings for both new and ex­ist­ing patent­ed med­i­cines,” ac­cord­ing to a mes­sage from Mitchell Levine, the chair­per­son of the Patent­ed Med­i­cine Prices Re­view Board (PM­PRB).

In an­nounc­ing the pro­posed up­dates to the guide­lines, Health Cana­da not­ed that over the course of a decade, the changes are pro­ject­ed to save Cana­di­ans over CAD $13 bil­lion in the cost of patent­ed drugs.

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