Mandate and Jurisdiction
The Patented Medicine Prices Review Board (PMPRB) is an independent quasi-judicial body established by Parliament in 1987 under the Patent Act (Act). The Minister of Health is responsible for the pharmaceutical provisions of the Act, as set out in sections 79 to 103.
The PMPRB protects the interests of Canadian consumers by ensuring that the prices of patented medicines sold in Canada are not excessive. It does this by reviewing the prices that patentees charge for each individual patented drug product in Canadian markets. If a price is found to be excessive, the Board can hold public hearings and order price reductions and/or the offset of excess revenues. The PMPRB regulates the "factory gate" prices and does not have jurisdiction over prices charged by wholesalers or pharmacies, or over pharmacists' professional fees.
The PMPRB is also responsible for reporting on trends in pharmaceutical sales and pricing for all medicines and for reporting research and development spending by patentees.
Although the PMPRB is part of the Health Portfolio, it carries out its mandate at arms-length from the Minister of Health. It also operates independently of other bodies such as Health Canada, which approves drugs for safety and efficacy, and public drug plans, which approve the listing of drugs on their respective formularies for reimbursement purposes.
The PMPRB protects and informs Canadians by ensuring that the prices of patented medicines sold in Canada are not excessive and by reporting on pharmaceutical trends.
The PMPRB has a dual role:
Regulatory – To ensure that prices charged by patentees for patented medicines sold in Canada are not excessive;
Reporting – To report on pharmaceutical trends of all medicines and on R&D spending by pharmaceutical patentees.
Regulatory – The PMPRB is responsible for regulating the prices that patentees charge, the factory-gate price, for prescription and non-prescription patented drugs sold in Canada, to wholesalers, hospitals or pharmacies, for human and veterinary use to ensure that they are not excessive. The PMPRB regulates the price of each patented drug product, including each strength of each dosage form of each patented medicine sold in Canada. This is normally the level at which Health Canada assigns a Drug Identification Number (DIN).
In Canada, Health Canada assesses new medicines to ensure that they conform with the Food and Drugs Act and Regulations. Formal authorization to market or distribute a medicine is granted through a Notice of Compliance (NOC). A medicine may be temporarily distributed with specified restrictions before receiving a NOC, as an Investigational New Drug or under the Special Access Programme.
The PMPRB has no authority to regulate the prices of non-patented drugs, including generic drugs sold under compulsory licenses, and does not have jurisdiction over prices charged by wholesalers or retailers nor over pharmacists' professional fees. Also, matters such as distribution and prescribing are outside the purview of the PMPRB.
Under the Patented Medicines Regulations, patentees are required to file price and sales information twice a year for each strength of each dosage form of each patented medicine sold in Canada for price regulation purposes. Patentees are also required to file R&D expenditures once a year for reporting purposes.
Patentees are also required to inform the PMPRB of their intention to sell a patented medicine but are not required to obtain approval of the price before they do so.
Patentees are required to comply with the Patent Act to ensure that prices of patented medicines sold in Canada are not excessive. In the event that the Board finds, after a public hearing, that a price is excessive in any market it may order the patentee to reduce the price and take measures to offset any excess revenues it may have received.
Reporting – The PMPRB reports annually to Parliament through the Minister of Health. The Annual Report, which covers each calendar year, includes a review of the PMPRB's major activities, analyses of the prices of patented medicines and of the price trends of all drugs, and reports on the R&D expenditures as reported by patent-holding drug manufacturers. In addition, the PMPRB reports through its quarterly NEWSletter and various studies.
Pursuant to an agreement by the Federal/Provincial/Territorial Ministers of Health and at the request of the federal Minister of Health, the PMPRB reports on its research studies conducted under the National Prescription Drug Utilization Information System (NPDUIS) on the utilization and management of pharmaceutical products in Canada.