Pause on PMPRB reform: implementation of new pricing regulations delayed to 2021

The Patented Medicine Prices Review Board (PMPRB) has announced a delay in the coming-into-force of the amended Patent Medicines Regulations (the Regulations) to January 1, 2021.

What you need to know

  • The Regulations were initially to come into force on July 1, 2020. This implementation date has now been delayed to January 1, 2021.
  • PMPRB has indicated that draft Guidelines to operationalize the Regulations will be published during the week of June 15, 2020 and will be subject to a 30-day consultation period.
  • PMPRB also states that the final Guidelines will include transitional measures to give industry time to adapt and voluntarily comply with the new regulatory requirements.

Analysis

The Regulations were published in August 2019, touted by the government as “the most significant reforms to the regulations since their introduction in 1987”, and being necessary to give the PMPRB “the tools to protect Canadians from excessive prices and make patented medicines more affordable”.

The industry has been speculating for weeks that the coming-into-force date for the Regulations would be delayed, since the details of how industry would report sales of patented medicines to PMPRB under the amended Regulations have still not been established. Draft Guidelines, which establish price tests and reporting requirements, were first published in November 2019. However, PMPRB received extensive feedback on those draft Guidelines, and stated that it would be making “significant” changes to the Guidelines before they are finalized. Without the final Guidelines, a delay in the coming-into-force date for the Regulations seemed inevitable.

The announcement from PMPRB indicates that stakeholders will be given “…a limited period of time in which to submit their views in writing prior to the Guidelines being finalized.” This suggests that PMPRB will not engage in wide consultation on the draft before settling on the final Guidelines.

The Regulations are currently the subject of two pending court proceedings, one before the Federal Court that is being brought by the Canadian industry association Innovative Medicines Canada (IMC), and one before the Québec Superior Court that was launched by six innovative drug companies. The hearing in the Federal Court proceeding commenced on June 1 and will continue until June 3. The Federal Court Judge hearing the application was advised of the change in the implementation date and indicated the Court’s desire to render a decision no later than the end of July, if not sooner. This decision could potentially further impact implementation of the Regulations if IMC is successful. Prior to initiating these proceedings, the industry had expressed concerns that the Regulations would impact access to new medicines by Canadians and create disincentives for investment in the Canadian life sciences sector. Given the ongoing COVID-19 pandemic, timely access to vaccines and other drugs is surely on the minds of all stakeholders.

As of April 29, 2020, Canada continues to be on the intellectual property (IP) watchlist of the Office of the United States Trade Representative1. The watchlist identifies trading partners of the United States that do not adequately or effectively protect and enforce IP rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights (you can refer to our past bulletins on the Regulations2 for more background).

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1 See the Office of the United States Trade Representative’s press release here.

2 See our bulletins from December 2017 and August 2019 which provide more background and detail.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

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