Canada’s PMPRB: Reference-based pricing here to stay

After multiple delays in the implementation of amendments to Canada’s Patented Medicines Regulations, the Minister of Health announced that the new basket of comparator countries and reduced reporting for patented medicines at lowest risk of excessive pricing will be formally published in Canada Gazette in late spring 2022, and come into force on July 1, 2022. Gone are the amendments that would have required rights holders to report third-party rebates. Also gone are the new price (economic) regulatory factors.

What you need to know

• This announcement makes clear that reference-based pricing for patented medicines is here to stay in Canada.
• The current basket of comparator countries, PMPRB7, will become PMPRB11, as of July 1, 2022. Notably, PMPRB11 does not include the United States or Switzerland.
  • PMPRB7 countries are France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the United States.
  • PMPRB11 countries are Australia, Belgium, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden and the United Kingdom.
• Rights holders will be required to report to PMPRB the publicly available ex-factory price at which patented medicines are sold in PMPRB11 countries.
• Litigation in relation to the legality of the amendments and the PMPRB’s guidelines which would implement the amendments, continues to work its way through applicable courts. (We have reported previously¹ on the status of the litigation.)
• Grandfathered patented medicines (i.e., those for which a drug identification number (DIN) was assigned on or after August 21, 2019) and Gap patented medicines (i.e., those for which a DIN was assigned after August 21, 2019 and sold before the coming into force date) are expected to be subject to PMPRB11 as the list of comparator countries for which reporting will be required.
• In view of the ongoing litigation and commentary from applicable courts on the jurisdiction of the PMPRB, it is unclear whether the test for excessive pricing of patented medicines will be the median list price of PMPRB11 or the maximum list price of PMPRB11. Revised guidelines are expected and will likely clarify this point.