Final Guidelines from Canada’s PMPRB: the new era begins

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.

What you need to know

• The Guidelines are final and will come into effect on January 1, 2026. The PMPRB has been operating under interim guidance as a temporary measure while final Guidelines were being developed, and no price reviews have been conducted during this interim period.
• Patented medicines that were approved prior to July 1, 2022 (Existing Medicines) will undergo a first annual review in January 2028, and the price will only be assessed against the highest international price (HIP) of the basket of 11 countries specified as comparators in the PMR (the PMPRB11) at that time². Only if Existing Medicines are the subject of a complaint made between January 2026 and January 2028 will they undergo an In-Depth Review. Subsequent reviews will follow the new process in the Guidelines.
• Patented medicines that were approved after July 1, 2022 (New Medicines) are expected to be reviewed in early 2026 in accordance with the new process in the Guidelines.
• The Guidelines propose a two-step review (following the transition period for Existing Medicines). Medicines will undergo an Annual Review, and if priced above the HIP or if a price increase above the Consumer Price Index (CPI) was taken, the medicine will be subject to the second step, known as an In-Depth Review.
• Complaints will also trigger an In-Depth Review and possibly a hearing, but they can only be launched by Ministers of Health or senior officials of public drug programs.

Background and current state

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.

Overview of the review process under the Guidelines

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.

First step: Initial/Annual 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.

Second step: In-Depth 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.

Outcome

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.

Notable changes from the draft Guidelines

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:

• The Guidelines do not contain language regarding the ability of PMPRB staff to assess “clinical similarities” when determining when a patent pertains to a medicine, in view of the Federal Court of Appeal ruling in Galderma Canada Inc. v. Attorney General of Canada⁴ that negated this concept (for more on this case, consult our bulletin). The Guidelines also removed the statement that “[t]he threshold for finding a connection between a patent and a medicine is low”.
• Interestingly, the Guidelines also struck previous language on patent dedication as not expressly recognized in the Patent Act as a mechanism by which patent rights may be terminated before the normal expiry of the patent term. It is unclear whether this signifies a change in PMPRB’s position or whether this has been removed as not relevant, with the change in focus of the Guidelines to be directed to Staff’s administrative review process only.
• As noted, Existing Medicines will be afforded a two-year transition period before undergoing their first Annual Review under these Guidelines, and only the HIP test will be applied at that time unless a complaint is received. Price increases as compared to CPI will be assessed going forward in Annual Reviews (i.e. starting in 2029).
• In the draft 2024 Guidelines, complaints of private insurers were included in the type of complaints that would automatically trigger an In-Depth Review. The final Guidelines now restrict complaints to those of government health ministers or senior representatives of public drug plans. The complaint process applies to both New Medicines and Existing Medicines as soon as the Guidelines come into force on January 1, 2026.