The Patented Medicine Prices Review Board ("PMPRB") is responsible for ensuring that patentees are not selling medicines at excessive prices in any market in Canada. This regulatory regime is established pursuant to the Patent Act. The PMPRB has broad powers to compel patentees to disclose pricing and other information, and to order patentees to reduce the prices of medicines when it finds that prices are excessive. The PMPRB's Compendium of Policies, Guidelines and Procedures ("Guidelines") outlines how Board Staff reviews the prices of patented drug products, and how it proceeds when a price appears excessive. This includes in what circumstances Board Staff will proceed with an investigation. The Guidelines are not binding, but are intended to promote awareness and facilitate compliance.
The PMRPB implemented its currently revised Guidelines on January 1, 2010, following an extensive policy review and consultation with stakeholders. As part of the Board´s ongoing commitment that its framework continue to have a positive impact for consumers, while recognizing the value that innovative medicines offer to patients, the Board has enhanced its engagement policy with all stakeholders. It is the Board´s intention that the Guidelines be responsive, in an appropriate timeframe, to changes in the environment it regulates; the regulatory burden be reduced, where possible; and, the PMPRB continue to use its limited resources efficiently. In furtherance of these objectives, the PMPRB has recently announced two proposed changes to its Guidelines, and is inviting public comment.
Currently the Guidelines provide that Board Staff will commence an investigation into the price of a patented drug product when any of the following criteria are met: (i) the National Average Transaction Price or any Market-Specific Average Transaction Price of a new drug product exceeds the Maximum Average Potential Price during the introductory period by more than 5% ; (ii) the National Average Transaction Price of an existing drug product exceeds the National Non-Excessive Average Price by more than 5% ; (iii) excess revenues for a new or existing drug product are $50,000 or more ; or (iv) the PMPRB receives a complaint. The Board is now proposing that for existing drug products, the PMPRB proposes eliminating the 5% investigation trigger at the national level in favour of a "revenue trigger". Specifically, investigations will only take place where excess revenues for a medicine are greater than $50,000. This is intended to reduce the number of investigations. We expect that industry will welcome this change.
Second, currently, where there is excess revenue but not enough to trigger an investigation the excess can and must be addressed by the patentee in the three years following determination or else it faces the prospect of a Voluntary Compliance Undertaking (VCU ). If a VCU is not agreed upon then the matter is referred to the Chair. The PMPRB is proposing to eliminate this three year window, potentially leading to a VCU or a reference to the Chair, and replace it with an obligation for the patentee to eliminate the excess in a timely manner. We expect that industry will also welcome this change.
The PMPRB has invited public comments on these two proposed changes by May 14, 2012.