On September 1, 2022 the Patented Medicine Prices Review Board (PMPRB) issued its decision regarding the drug Procysbi (cysteamine delayed release capsules). The PMPRB found the price of Procysbi to be excessive. Interestingly, this matter found its way before the PMPRB following a complaint by the pan-Canadian Pharmaceutical Alliance (“pCPA”). Under the Guidelines, receipt of a complaint triggers an automatic investigation.
The decision offers helpful insights following the Federal Court of Appeal’s decision in Alexion Pharmaceuticals Inc. v Canada (Attorney General), 2021 FCA 157 (“Soliris FCA”) and how the PMPRB will review the prices of medicines under investigation, including:
- What is the mandate of the PMPRB?
- What is a medicine?
- What is the therapeutic comparator?
- What is the Level of Improvement and Price Test?
What Is the Mandate of the PMPRB?
The PMPRB focused on excessive pricing rather than “reasonable pricing”, which the Federal Court of Appeal had found problematic in Soliris FCA. The decision contains a lengthy discussion of the PMPRB’s mandate:
“the Board’s mandate is to ensure that patentees do not abuse their statutory monopoly rights by charging excessive prices and, in this respect, the Board does have a consumer protection mandate”.
What is the Medicine?
As a first step, the PMPRB considered whether Procysbi and Cystagon were the same medicine given the presence of the same active ingredient, cysteamine bitartrate, and use for the same indication, nephropathic cystinosis. The key issue was whether the presence of the same active ingredient, albeit in different formulations, meant that the drugs are the same medicine. The PMPRB found that the “term “medicine” refers to the commercial formulation (Procysbi), and not simply the active ingredient (cysteamine bitartrate)””.
This analysis is interesting in light of the PMPRB’s Galderma re-determination decision. In that instance, the PMPRB paid closer attention to the active ingredient and found that a later patent claiming 0.3% adapalene pertained to an earlier 0.1% formulation of that medicine.
What is the Therapeutic Comparator?
Although the PMPRB did not find Procysbi and Cystagon to be the same medicine, it did find that Cystagon is a therapeutic comparator to Procysbi on the basis of active ingredient and indication. The PMPRB found that provision of Cystagon through the special access program amounted to it being “sold in the relevant market” for the purposes of comparison.
What is the Level of Improvement and Price Test?
The PMPRB then considered the level of improvement offered by Procysbi to determine the appropriate pricing test. The PMPRB found that Procysbi offered moderate improvement over its therapeutic comparator, Cystagon. As such, the Moderate Improvement Test was appropriate. The Moderate Improvement Test involves an analysis of the Therapeutic Class Comparison (TCC) Test, the Median International Price Comparison (MIPC) Test, and the midpoint between those two tests. The price of a moderate improvement drug is constrained by the higher of the TCC Test and the midpoint between the TCC Test and the MIPC Test.
In applying the TCC test and comparing against Cystagon, the PMPRB found the median ex-factory price of Cystagon to be C$0.0197 / mg. In applying the MIPIC test the PMPRB found the median international ex-factory price of Procysbi to be C$0.4207 / mg. The midpoint between the TCC Test and the MIPC Test is C$0.2202 / mg and marks the maximum non-excessive price of Procysbi in Canada.
Given that Procysbi entered the Canadian market at C$0.4140 / mg, Horizon was ordered to reduce the price of Procysbi and pay the excess revenues derived by Horizon to Canada.