On July 6, 2007, the PMPRB announced that it has approved a Voluntary Compliance Undertaking by Eli Lilly Canada with respect to Forteo.
Forteo (teriparatide) is a recombinant human parathyroid hormone and is the first in a new class of bone formation agents. It is indicated for the treatment of certain cases of severe osteoporosis in patients who have failed or are intolerant to previous osteoporosis therapy. Forteo was introduced in Canada in July 2004.
For price review purposes, the PMPRB did not identify any comparator drugs to Forteo and therefore reviewed the price with reference to international prices. It concluded that at the time of introduction, the price in Canada exceeded the median of international prices by approximately 12%. As a result, the PMPRB alleges that Eli Lilly received excess revenues from the sale of Forteo during 2004 and 2005, but by 2006, the price was within the PMPRB's guidelines.
For purposes of resolving this matter, Lilly Canada has agreed on the maximum non-excessive (MNE) prices identified by the Board and will take action to offset the remaining excess revenues of approximately $333,000.00. This sum will be offset by maintaining the price of Forteo in 2007 at levels below the MNE price calculated by the Board. There is no provision for a payment to the Government of Canada in this case unless there are excess revenues remaining at the end of 2007.
The undertaking notes that the average transaction price in future years will be calculated "based on the calculation of revenues less reductions as appropriate under subsection 4(4) of the [Patented Medicines] Regulations divided by the quantities sold and distributed free of charge."
In making the undertaking, Lilly Canada makes no admission that the price of Forteo in Canada is now or was excessive for purposes of the Patent Act.