Canada’s Patented Medicine Prices
Review Board
Michelle Boudreau
Executive Director
Pharma Pricing and Market Access Outlook
London, United Kingdom
March 19-22, 2013
Outline
________________________________________________
 Overview of the PMPRB
 How the PMPRB really works.
 Canada Compared to the World
 Common Challenges
 Looking Forward
2
Overview of the PMPRB
________________________________________________
 Established in 1987 as consumer protection pillar via
amendments to Patent Act
 The PMPRB is an independent quasi-judicial body with a dual
mandate:


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
 Jurisdiction

3
Regulate prices patentees charge (i.e. factory-gate price) for patented drug
products sold in Canada, to wholesalers, hospitals or pharmacies, for human
and veterinary use
How does it really work - price tests
________________________________________________
 Blend of therapeutic improvement & international referencing
 Recognize incremental pharmaceutical innovation

At introduction, price premium aligned with therapeutic improvement:

Four levels of therapeutic improvement:
1)
2)
3)
4)
Breakthrough – Median of International Price Comparison (MIPC)
Substantial Improvement – Higher of top of Therapeutic Class Comparison
(TCC) and the MIPC
Moderate Improvement – Higher of mid-point between top of TCC test and the
MIP, and top of TCC (primary & secondary factors apply here)
Slight/No Improvement – Top of TCC
 After introduction, PMPRB monitors average prices, CPI
increase permitted but at no time can price be higher than
highest international price (HIP)
4
How does it really work – PMPRB ceiling price
compared with public price
________________________________________________
Drug
Pivotal Test
PMPRB ceiling
price
Patentee
Publicly
introductory
available
price
price
(average)
Brand-X
TCC
2.45
0.68
0.69
Brand-Y
TCC
1.52
1.50
1.50
Generic-A
TCC*
0.65
0.42
0.33
* Brand price sets the MAPP – brand price $0.65
5
Regulatory Statistics
 Approximately 1,200 patented drug products under PMPRB jurisdiction
 2011: 109 New Drug Products introduced :
79% within Guidelines;
 9% outside of Guidelines but do not trigger an investigation
 12% under investigation
 69% were of slight or no improvement; 25% of moderate improvement;
5% of substantial improvement and 1% breakthrough
 Between 2000 and 2010, average of 84 new patented drug products/year
 High level of compliance: average rate is approximately 95%
 Since 1993:




6
90 VCUs
26 public hearings
$137 million collected through VCUs and Board Orders
PMPRB Price Tests - International Referencing
________________________________________________
 Reference pricing at introduction and for existing drugs based on 7
comparator countries - France, Germany, Italy, Sweden, Switzerland, UK, and US

Policy changes in these countries could impact prices in Canada
 Over last 3 years, Germany has most often been the highest
referenced price for PMPRB price tests (“HIPC”), followed by US

7
Recent cost containment measures by reference countries, like Germany, may
therefore lead to lower prices in Canada
Canada Compared to the World
________________________________________________
 Canadian prices comparatively higher than a number of OECD
countries
2.50
Avg Bilateral Foreign-to-Canadian Price Ratios: Top 300 selling oral solids in Canada
2.00
1.50
1.00
0.50
0.00
IMS Health Data, 2010
8
Canada Compared to the World (cont’d)
________________________________________________
 Growth in drug sales outpacing comparator countries
9
Canada Compared to 21 EU Members - 2010
AVERAGE BILATERAL FOREIGN-TO-CANADIAN PRICE RATIOS
1.06
Germany
Canada
Denmark
Ireland
Sweden
Luxembourg
Belgium
Austria
Spain
France
Netherlands
United Kingdom
Greece
Finland
Hungary
Poland
Portugal
Italy
Slovenia
Slovakia
Estonia
Czech Republic
0.93
1.00
0.98
0.89
0.87
0.84
0.80-0.70
0.70-0.60
0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 1.05
Average Price Ratio for 21 EU Members 0.79
Based on top 300 selling oral solids in Canada
10
IMS Health Data, 2010
Common Challenges
________________________________________________
 Transparency in pricing around the globe makes comparisons
increasingly challenging as a price regulator
 Next wave of new drugs (e.g., biologics) are costly
 Recognizing innovation and ensuring a non-excessive price =
a delicate balance
 Very dynamic market with many factors at play
 Affordable access and sustainability is a concern shared by
consumers, regulators and payers
11
Looking Forward
________________________________________________
 Canadian-EU Comprehensive Trade Agreement (CETA)

If proposal implemented, longer period of PMPRB regulation over
patented drugs; but could also cause a re-evaluation of the balance between
intellectual/industrial policies and health care/drug costs
 Critical jurisprudential decisions within approx. 1 year
 Priorities of last fiscal year: reducing regulatory burden and
increasing compliance
 September 2013, Board will set priorities for fiscal year 13-14
 Ongoing engagement and outreach with stakeholders
 Continued engagement with international organizations
12
Thank you.
Merci.
michelle.boudreau@pmprb-cepmb.gc.ca
PMPRB Website:
www.pmprb-cepmb.gc.ca
13