Amendments to the Patented Medicines Regulations - Questions and Answers

Health Canada announced amendments to the Patented Medicines Regulations in Canada Gazette, Part II on August 9, 2019. The following questions and answers address concerns and questions that Canadians and stakeholders may have.

Now that the Patented Medicines Regulations have been amended, what are the PMPRB’s next steps?

The PMPRB will carefully review/examine the newly released amendments to the Patented Medicines Regulations and identify any changes that may warrant an adjustment to the proposed guidelines framework and further consultations. Informed by these, as well as the final report of the Steering Committee on Modernization of Price Review Process Guidelines and the Technical Report of the Working Group, the PMPRB will publish the draft Guidelines early in the fall.

The draft Guidelines will be subject to a broad and robust consultation process with stakeholders and interested members of the public, the details of which will be made available shortly.

The PMPRB looks forward to open and constructive dialogue with our partners and stakeholders in the coming months as it works to make the necessary changes to its Guidelines to give effect to the regulatory amendments.

What is the difference between the Regulations and the Guidelines?

Regulations are the rules used to carry out the intent of statutes (Acts) enacted by the Parliament of Canada. They are instruments of legislative power and have the force of law. The Regulations specify the information and documents that patentees must provide the PMPRB for it to carry out its regulatory mandate effectively, as well as new factors to be considered by the PMPRB when it monitors prices. They include requirements relating to the prices of all patented medicines sold in Canada and prices in foreign countries where they are also sold. The Regulations also specify which countries Canada looks to in comparing its prices.

The Guidelines outline the policies and procedures normally undertaken in determining whether a price is potentially excessive. Given the open-ended nature of the exercise contemplated under the Patent Act, the Guidelines develop many of the core administrative concepts which give effect to the PMPRB’s consumer protection mandate. The Guidelines provide the patentee with guidance on how price information will be reviewed and in what circumstances the Board staff will recommend that an excessive price hearing be held. Adherence to the Guidelines reduces the likelihood that a patentee may find itself in a hearing before the Board. In the context of an excessive price hearing, a panel may consider the Guidelines, however they are not binding, on either the patentees or the Board.

Why do we need new Guidelines?

The current Guidelines are grounded in a decades-old understanding of the Canadian and global pharmaceutical sector. In order to operationalize amendments to the Patented Medicines Regulations, the PMPRB needs to update its Guidelines. The amendments bring significant enhancements to the PMPRB regulatory regime and provide it with the tools and information it needs to protect Canadians from excessive medicine prices today and into the future.

Given these major regulatory changes, the PMPRB needs to issue a new set of Guidelines that would operationalize the regulatory amendments in order to make patented medicines more affordable for Canadians. New Guidelines are needed to provide guidance to patentees on the policies and procedures the PMPRB plans to use in the application of the new countries and pricing factors.

In addition, the PMPRB will simplify the price review process through the application of a risk-based approach that will reduce regulatory burden on patentees.

Updating the Guidelines is necessary to bring the PMPRB’s overall framework in line with today’s pharmaceutical environment and international best practices.

When will the new Regulations take effect?

The new Regulations will come into force on July 1, 2020.

The PMPRB will ensure that the Guideline consultation schedule gives stakeholders ample time to prepare for the coming into force of the regulatory amendments on July 1, 2020.

Will lower prices limit innovation in Canada and prevent new medicines from coming here?

There is no evidence of a link between pricing, research & development (R&D), and access to medicines. The PMPRB Annual Report indicates that many comparator countries have lower patented prices than Canada, yet they all have higher levels of R&D spending relative to their patented sales and may have better access to medicines.

Many factors influence the decision to launch a new medicine in a particular country, including gross domestic product (GDP), drug spending, drug approval and reimbursement policies and procedures, location of corporate headquarters and the size of the market.

Will the new regulatory framework apply to existing patented medicines, or only new medicines approved by Health Canada after the July 1, 2020 coming into force date?

As per the amendments to the Patented Medicines Regulations, the new factors will not apply to those medicines that received a DIN prior to the final publication of the amendments. However, these medicines will still be required to comply with the other elements of the new regulatory framework, including the new basket of comparator countries and reporting requirements.

In the coming weeks and months, the PMPRB will embark on extensive consultations with stakeholders regarding the new Guidelines that aim to implement the new regulations. Part of those discussions will include how the new regulatory framework will apply to existing patented medicines.

How will the work of the Steering Committee on Modernization of Price Review Process Guidelines and Technical Working Group factor into the new Guidelines?

The Technical Working Group and Steering Committee’s reports are available on our website and will be carefully considered by the Board prior to consulting on new draft Guidelines this fall.

We look forward to continuing to work closely with our partners and stakeholders during the final stage of the consultation process on Guideline reform.

What do you respond to the critics arguing that the PMPRB consultation process has not been transparent, comprehensive etc.?

The PMPRB is committed to an open and transparent dialogue with Canadians on the new regulatory changes and related Guideline changes. The PMPRB has been consulting with Canadians since 2016 on reform of its regulatory framework with the publication of the PMPRB Guidelines Modernization – Discussion Paper – June 2016. Following the launch of the Canada Gazette process in December 2017, the PMPRB released a scoping paper providing stakeholders and members of the general public with an outline of the PMPRB’s preliminary thoughts on how to operationalize the proposed changes to the Regulations. These first steps were followed by a series of multi-stakeholder webinars and eventually the establishment of a Steering Committee in June 2018 to discuss the PMPRB’s direction in relation to potential changes to the Guidelines. At the same time, a Technical Working Group was struck to consider any technical challenges related to the application of the new regulatory factors. Both bodies included a cross-section of the stakeholder community, including manufacturers; patient group representatives and academics. The goal was to engage with stakeholders early in the process even before publication of the final Regulatory amendments through the Canada Gazette process. All materials pertaining to these processes as well as the final outcome of the proceedings have been or will be made publically available on the PMPRB website.

With the publication of the amended Regulations, the PMPRB looks forward to further constructive engagement with stakeholders over the coming months in the development of appropriate Guidelines implementing the changes.

Is it true that the PMPRB will be duplicating the work of agencies like CADTH and INESSS as a result of these changes?

The PMPRB will not be duplicating the work of other agencies like CADTH and INESSS as a result of these changes. It will leverage the existing capacity in these world-renowned health technology assessment bodies and rely on their expert assessment to inform the application of the new pharmacoeconomic value factor that will be considered in the price review process.

Furthermore, although it is part of the Health Portfolio, the PMPRB maintains an arm’s length relationship with other entities, including the Minister of Health and stakeholders. In other words, the PMPRB conducts its price monitoring activities and excessive price hearings independently from those entities.

Will these changes result in delaying access to new drugs in Canada?

These changes are not expected to result in delays. Manufacturers do not need prior approval of the price in order to launch drugs in Canada. The price review is conducted after the date of first sale or market authorization is received. In fact, the reforms are expected to reduce the gap between the prices consumers find fair and manufacturers are seeking. A closer alignment of these prices has the potential of improving the outcome and timeliness of a negotiation by public and private payers.

These reforms are also part of a suite of ongoing measures intended to encourage access to innovative medicines, including improvements to the NOC process and the alignment of Health Canada and CADTH reviews. Taken together, these reforms seek to ensure that these medicines can receive regulatory approvals and price reviews more quickly, providing greater certainty to patentees, payers, and patients.

Will these changes result in confidential pricing information being disclosed by the PMPRB?

Canada will align with existing global business practices that allow manufacturers to maintain confidential prices below transparent list prices. By protecting the information provided by patentees on third party discounts, the true price in Canada will not be visible to other jurisdictions. This will ensure that Canada’s list prices are in line with our comparator countries, leaving no reason to believe that Canada will be viewed by the manufacturers less favourably than other countries when it comes to the launch sequencing.

Similar to today’s process, which maintains the confidentiality of a patentees’ transaction price, the new approach would see the PMPRB continue to comply with the relevant provisions of the Patent Act.