Advance Ruling Certificate – Viread

On April 13, 2004, the Board published a Notice and Comment proposing to issue an Advance Ruling Certificate (ARC) with respect to the patented medicine Viread. Viread (tenofovir disoproxil fumarate) is used in the treatment of HIV-1 infection and has been sold in Canada by Gilead Sciences, Inc. since March 2004. Following negotiations, Gilead and Board Staff agreed that Gilead would propose to sell Viread in Canada at an average price not to exceed $15.1250 per 300 mg tablet.

Ministers of Health in the provinces and territories and other interested parties were invited to make submissions regarding the proposed ARC on or before May 7, 2004. Gilead and Board Staff were given the opportunity to submit written responses to any submissions no later than May 25, 2004.

Board Staff has recommended that it is appropriate for the Board to conclude that it would not have sufficient grounds to make an order under section 83 of the Patent Act(Act) with respect to Viread, taking into consideration the factors set out in section 85 of the Act, for these reasons:

a. The proposed Canadian price in 2004 is well below the median of the international prices; it will be the second lowest of the seven comparator countries;

b. It reflects the relationship of the price of Viread to other medicines in the same therapeutic class in countries other than Canada;

c. It is consistent with the policies of the Board that patentees should seek advisory assistance with respect to the proposed price of a patented medicine;

d. Price changes in future years will be subject to the Guidelines.

The Board received one submission in response to the Notice from the Canadian Treatment Action Council (CTAC). There were no submissions from the Ministers of Health in the provinces and territories. Gilead and Board Staff filed written submissions in response to the submission from CTAC. Copies of these submissions may be obtained from the Secretary of the Board.

CTAC was of the view that the ARC should not be issued. In addition to concerns about escalating prescription drug prices generally, the price of Viread in particular, and the potential for the strategic introduction of drug products in order to maximize prices, CTAC raised two concerns specific to the application of the Guidelines: the results of the Therapeutic Class Comparison (TCC) test; and the ability for Gilead to seek and obtain from the PMPRB a recategorization of Viread as a category 2 medicine and potential price increases should that occur.

As set out in the Notice, the review by Board Staff concluded that the proposed price of Viread exceeds the maximum non-excessive (MNE) price under the Guidelines based on the TCC test and, in particular, exceeds the price of Ziagen on a cost per day basis. For purposes of an Advance Ruling Certificate, however, it is necessary to consider if there would be grounds to make an order under section 83 of the Act taking into consideration all of the factors set out in section 85. Subsection 85(1)(c) of the Act states that the Board shall take into consideration “the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada.” Among other things, Viread as the first and only nucleotide in the 4th level of the Anatomical, Therapeutic, Chemical (ATC) System class of nucleoside and nucleotide reverse transcriptase inhibitors (NRTIs) is sold at a premium to the nucleosides in the class in all seven comparator countries. The proposed maximum non-excessive price of $15.1250 per tablet is based on the median of the ratios of the prices of Viread to Ziagen, the pivotal comparator in a TCC test and the most recent entrant in the same 4th level ATC class, in those countries. The proposed price for purposes of the ARC is 18% below the median international price for Viread and the second lowest as compared to the seven countries in the international price comparison.

With respect to concerns about the potential for a recategorization of Viread and the implications for price increases in the future, it is important to note that price changes in future years are subject to the Guidelines which will limit price increases for patented drugs to changes in the Consumer Price Index (CPI). The Guidelines make no provision for re-categorization once a benchmark price has been established. In its written submission in response to the CTAC submission, Gilead acknowledged that it recognizes that Viread will be subject to the provisions of the Guidelines that limit price increases to increases in the CPI.

Having considered the submissions of CTAC, Gilead and Board Staff, and based on the facts available at this time, the Chairperson has concluded that there would not be sufficient grounds to make an order under section 83 of the Act and that it is in the public interest to issue the ARC with respect to the proposed price of the medicine Viread. The PMPRB will continue to monitor the price of Viread to ensure that it complies with the Board´s Guidelines while it remains under the PMPRB´s jurisdiction.

In accordance with subsection 98(4) of the Act, any review conducted for the purposes of issuing an ARC is based on the material facts available at the time of the review. Furthermore, the information relied upon for one review may not necessarily reflect the scientific information or therapeutic alternatives at the time a subsequent drug is reviewed. Neither the TCC test nor any other information provided in the context of the ARC should be relied upon for any purpose other than its stated purposes and is not to be interpreted as an endorsement, recommendation or approval of any drug nor is it intended to be relied upon as a substitute for seeking appropriate advice from a qualified health care practitioner.

Posted on the PMPRB Web site on June 8, 2004 and published in the July 2004 NEWSletter.

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