On June 30, 2025, the PMPRB published final non-binding guidelines (Guidelines) titled Guidelines for PMPRB Staff: Administrative Process for Excessive Price Hearing Recommendation1. The Guidelines will operationalize the requirements of the Patented Medicines Regulations (PMR) that were amended and came into force in 2022 following judicial decisions on their scope.
The PMPRB is a quasi-judicial body that regulates the cost of patented medicines in Canada by determining whether they are being sold at an excessive price. The Patented Medicines Regulations (PMR) were amended on July 1, 2022, creating a new basket of 11 comparator countries to reference when assessing whether a proposed list price in Canada is excessive. These changes to the PMR necessitated the development of a new process for the PMPRB to use in price reviews.
The PMPRB adopted interim guidance in 2023 to provide the industry with some predictability regarding the status of list price reviews while the final Guidelines were under development3.
Unlike the previous Guidelines (in place prior to 2022) which were addressed to rights holders, the final Guidelines are directed to PMPRB Staff and expressly state that they are (i) “not intended to be a pricing framework”, and (ii) “nor are they intended to provide certainty on ultimate outcomes for particular cases, suggest or set prices in Canada, or encourage ‘compliance’ with any tests or price ceilings”. This change seems to have been made to address recent case law emphasising the non-binding nature of the Guidelines. However, based on past practice, we expect that the Guidelines will be very instructive to PMPRB Staff when conducting price reviews, and to the PMPRB itself in the context of a hearing.
The final Guidelines have few changes to the draft Guidelines that were published for consultation in December 2024. Please refer to our prior bulletin on the draft Guidelines for further details on the review process. In summary, price reviews will be conducted through a two-step process. The first step is an Initial Review or Annual Review, which will apply to all patented medicines. The second step is an In-Depth Review, which will only apply to certain medicines pending the outcome of the Initial Review.
For an Initial Review, PMPRB staff will review the patented medicine’s first semi-annual price filing against the HIP among the PMPRB11. An Annual Review will then be conducted every January for both new and existing medicines against the HIP. Changes in the price of the medicine as compared to the Consumer Price Index (CPI) will also be assessed annually and may lead to an In-Depth Review. A medicine will automatically undergo an In-Depth Review if a complaint is received about its price from a federal or provincial/territorial health minister or a senior official of a publicly-funded drug program, even if the medicine did not meet the criteria for an In-Depth Review following its Initial or Annual Review.
During an In-Depth Review, PMPRB staff will consider all the factors under section 85 of the Patent Act to determine whether to recommend a hearing before the PMPRB. In addition to the PMPRB11 and changes in CPI, PMPRB staff can consider the prices at which the medicine and other medicines in the same therapeutic class have been sold in Canada, and will identify comparators for a Therapeutic Class Comparison (TCC) for this process. PMPRB staff may consult with the Human Drug Advisory Panel (HDAP), a body of independent health care professionals, on an ad hoc basis during this assessment. The In-Depth Review is estimated to take 12 to 28 months to complete.
The Guidelines recognize that a rights holder may undertake to lower the price of the medicine under review or repay excess revenue earned through a payment to the Federal government, known as an “undertaking”. Following completion of the In-Depth Review, it will either be closed, with or without an undertaking from the rights holder, or PMPRB Staff may recommend that a hearing be held before the PMPRB to determine whether the rights holder has sold its medicine at an excessive price.
As noted, these final Guidelines are substantially similar to the draft version that was published late in 2024. There are a few items of note for stakeholders:
To discuss these issues, please contact the author(s).
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