Michelle BoudreauExecutive Director
Pharma Pricing and Market Access OutlookLondon, United KingdomMarch 19-22, 2013
Canada’s Patented Medicine Prices Review Board
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Outline________________________________________________
Overview of the PMPRB How the PMPRB really works. Canada Compared to the World Common Challenges Looking Forward
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Overview of the PMPRB________________________________________________ Established in 1987 as consumer protection pillar via
amendments to Patent Act The PMPRB is an independent quasi-judicial body with a dual
mandate: Regulatory: To ensure that prices charged by patentees for patented
medicines sold in Canada are not excessive Reporting: To report on pharmaceutical trends of all medicines and on R&D
spending by pharmaceutical patentees Jurisdiction
Regulate prices patentees charge (i.e. factory-gate price) for patented drug products sold in Canada, to wholesalers, hospitals or pharmacies, for human and veterinary use
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How does it really work - price tests ________________________________________________ Blend of therapeutic improvement & international referencing Recognize incremental pharmaceutical innovation
At introduction, price premium aligned with therapeutic improvement: Four levels of therapeutic improvement:
1) Breakthrough – Median of International Price Comparison (MIPC)2) Substantial Improvement – Higher of top of Therapeutic Class Comparison
(TCC) and the MIPC3) Moderate Improvement – Higher of mid-point between top of TCC test and the
MIP, and top of TCC (primary & secondary factors apply here)4) Slight/No Improvement – Top of TCC
After introduction, PMPRB monitors average prices, CPI increase permitted but at no time can price be higher than highest international price (HIP)
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How does it really work – PMPRB ceiling price compared with public price________________________________________________
* Brand price sets the MAPP – brand price $0.65
Drug Pivotal Test PMPRB ceiling price
Patentee introductory price (average)
Publicly available price
Brand-X TCC 2.45 0.68 0.69
Brand-Y TCC 1.52 1.50 1.50
Generic-A TCC* 0.65 0.42 0.33
Regulatory Statistics
Approximately 1,200 patented drug products under PMPRB jurisdiction 2011: 109 New Drug Products introduced :
79% within Guidelines; 9% outside of Guidelines but do not trigger an investigation 12% under investigation 69% were of slight or no improvement; 25% of moderate improvement;
5% of substantial improvement and 1% breakthrough Between 2000 and 2010, average of 84 new patented drug products/year High level of compliance: average rate is approximately 95% Since 1993:
90 VCUs 26 public hearings $137 million collected through VCUs and Board Orders
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Reference pricing at introduction and for existing drugs based on 7 comparator countries - France, Germany, Italy, Sweden, Switzerland, UK, and US Policy changes in these countries could impact prices in Canada
Over last 3 years, Germany has most often been the highest referenced price for PMPRB price tests (“HIPC”), followed by US Recent cost containment measures by reference countries, like Germany, may
therefore lead to lower prices in Canada
PMPRB Price Tests - International Referencing________________________________________________
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Canada Compared to the World________________________________________________ Canadian prices comparatively higher than a number of OECD
countries
S.Korea Ita
ly UK
Australi
a
France
Spain
Austria
Belgium
Swed
en
Switz
erlan
d
Denmark CAN
German
y
Mexico
Japan USA
0.00
0.50
1.00
1.50
2.00
2.50Avg Bilateral Foreign-to-Canadian Price Ratios: Top 300 selling oral solids in Canada
IMS Health Data, 2010
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Canada Compared to the World (cont’d)________________________________________________ Growth in drug sales outpacing comparator countries
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Canada Compared to 21 EU Members - 2010
IMS Health Data, 2010
Czech RepublicEstonia
SlovakiaSlovenia
ItalyPortugal
PolandHungaryFinlandGreece
United KingdomNetherlands
FranceSpain
AustriaBelgium
LuxembourgSwedenIreland
DenmarkCanada
Germany
0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 1.05
AVERAGE BILATERAL FOREIGN-TO-CANADIAN PRICE RATIOS
0.93
1.000.98
0.890.87
0.70-0.60
0.80-0.70
0.84
Average Price Ratio for 21 EU Members 0.79
1.06
Based on top 300 selling oral solids in Canada
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Common Challenges________________________________________________ Transparency in pricing around the globe makes comparisons
increasingly challenging as a price regulator
Next wave of new drugs (e.g., biologics) are costly
Recognizing innovation and ensuring a non-excessive price = a delicate balance
Very dynamic market with many factors at play
Affordable access and sustainability is a concern shared by consumers, regulators and payers
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Looking Forward________________________________________________
Canadian-EU Comprehensive Trade Agreement (CETA) If proposal implemented, longer period of PMPRB regulation over
patented drugs; but could also cause a re-evaluation of the balance between intellectual/industrial policies and health care/drug costs
Critical jurisprudential decisions within approx. 1 year Priorities of last fiscal year: reducing regulatory burden and
increasing compliance September 2013, Board will set priorities for fiscal year 13-14 Ongoing engagement and outreach with stakeholders Continued engagement with international organizations
Thank you.Merci.
PMPRB Website: www.pmprb-cepmb.gc.ca
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