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On December 2, 2017 Canada's Governor-in-Council published
proposed Regulations Amending the Patented Medicines
Regulations ("the proposed Regulations"). The
75-day consultation period ends February 15, 2018.
The proposed coming into force date is January 1,
2019. This follows the release of a consultation document
in May 2017 (see our articles here and here).
The proposed Regulations represent a significant overhaul to the
Patented Medicines Regulations and are estimated by Health
Canada to result in savings of $12.6 billion net present value over
10 years. While still yet to be adopted, in order to be prepared,
companies should be factoring these potential changes into their
business planning now.
Together with the Patent Act (sections 79-103), the Patented Medicines Regulations
provide the framework and authority by which the Government of
Canada, through the Patented Medicine Prices Review Board
("PMPRB"), regulates the prices of patented medicines in
Canada to avoid excessive prices. The regulatory framework is
supplemented by the Compendium of Policies, Guidelines and
Procedures, which explains the policies and procedures that the
PMPRB normally applies in reviewing the prices of patented
medicines sold in Canada.
Section 85 of the Patent Act lists the factors that the
PMPRB must take into account in determining if a medicine has been
sold at an excessive price, including such factors as specified in
the Patented Medicines Regulations.
According to the Regulatory Impact Analysis Statement
accompanying the draft regulations, "It is anticipated that
the implementation of these amendments by the PMPRB would lead to
lower prices for patented medicines in Canada that are more closely
aligned with their value to patients and the health care system,
and Canadians' willingness and ability to pay".
New Price Regulatory Factors
(new s. 4.4): The amendments would provide the PMPRB with
three new price regulatory factors: i) pharmacoeconomic value, ii)
market size, and iii) gross domestic product (GDP) in Canada and
GDP per capita in Canada. These factors are said to enable the
PMPRB to consider the price of a patented medicine in relation to
its value to patients and impact on the health care system.
Updated Reference Countries
(revised Schedule): The amendments would update the
schedule that lists the countries for which patentees must report
pricing information. The proposal adds
Australia, Belgium, Japan, Netherlands, Norway, Republic of Korea
and Spain; maintains France, Germany,
Italy, Sweden and United Kingdom; and
removes Switzerland and the United
States. The updated countries are said to provide the PMPRB with
the information needed to regulate prices based on comparisons that
are more closely aligned with the PMPRB's mandate and
Canada's domestic policy priorities.
Reduced Reporting
Requirements for Specific Medicines (new s. 3(3.1), amended 4(3)
and new 4.3(1): The amendments would reduce the reporting
obligations for patented veterinary, over-the-counter and generic
medicines. Absent a specific request, the reporting requirements
would not apply.
Added Reporting Requirements
Related to the New Price Regulatory Factors (new s. 4.1 and
4.2): The amendments would revise the price information
reporting requirements to extend to two of the new price regulatory
factors:
pharmacoeconomic
value: "every cost-utility analysis prepared by a
publicly funded Canadian organization, if published, for which the
outcomes are expressed as the cost per quality-adjusted life year
for each indication that is the subject of the analysis";
and,
market size:
"the estimated maximum use of the medicine in Canada, by
quantity of the medicine in final dosage form, for each dosage form
and strength that are expected to be sold".
Information regarding the final new factor, the GDP in Canada and
the GDP per capita, would be obtained from Statistics Canada.
Reporting of Third Party
Price Rebates (amended s. 4(4)): The amendments would
require patentees to report price and revenue information that is
net of all price or other adjustments, including discounts, rebates
and free goods and services made by the patentee or "any party
that directly or indirectly purchases or reimburses for the
purchase of the medicines".
Transition. The new factors would apply to
existing patented medicines, but limited to sales that occur after
the coming into force date, January 1, 2019. However, the reporting
requirements would apply to new and existing medicines.
Transitional provisions would limit reporting requirements
regarding estimated maximum use to drugs first sold by January 1,
2016, unless such information is updated on or after that date
(e.g. approval of a new use), presumably on the basis that the
balance of the medicines would be assumed to be selling at maximum
use three years after launch. The earliest that any information
would be required to be reported under the amendments is 30 days
after their coming into force.
The preceding is intended as a timely update on Canadian
intellectual property and technology law. The content is
informational only and does not constitute legal or professional
advice. To obtain such advice, please communicate with our offices
directly.
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