CPI - Adjustment Factors (Actual) - 2009

Preliminary Price-Adjustment Factors (Based on Forecast Inflation Rates)

Table 1 reproduces preliminary price-adjustment factors for 2009 published in the April 2008 NEWSletter. These factors were based on annual forecast CPI-inflation rates of 2.2% and 2.0% for 2008 and 2009, respectively.

Table 1

These figures imply: (1) a maximum allowable cumulative price increase between 2006 and 2009 of 6.5% for patented drug products with Canadian sales in 2006; (2) a maximum allowable cumulative price increase between 2007 and 2009 of 4.2% for products whose first Canadian sales occurred in 2007; and (3) a maximum allowable cumulative price increase between 2008 and 2009 of 2.0% for products whose first Canadian sales occurred in 2008.

In addition, the forecast inflation rate of 2.0% for 2009 implies a year-over-year price increase cap of 3.0% (= 1.5 x 2.0%) for 2009.

Final Price-Adjustment Factors (Based on Actual Inflation Rates)

The actual rate of CPI inflation for 2008 of 2.4% was published in the January 2009 NEWSletter. The actual CPI inflation for 2009 is now available and was 0.3 %. These rates (along with the actual 2007 CPI-inflation rate of 2.1%) yield the following final price-adjustment factors.

Table 2

The final year-over-year price increase cap for 2009 is 0.5 % (= 1.5 x 0.3%).