ARCHIVED - MAF Assessment: Patented Medicine Prices Review Board - 2008

The Patented Medicine Prices Review Board (PMPRB) is an independent quasi-judicial body in the Minister of Health’s portfolio, created in 1987 under the Patent Act. Its mandate is to ensure that prices charged by patentees for patented medicines sold to wholesalers, hospitals and pharmacies in Canada are not excessive. The PMPRB also reports annually to Parliament on pharmaceutical trends and on the research and development expenditures of patent-holding pharmaceutical companies. The organization’s regulatory workload is essentially non-discretionary.

The PMPRB consists of five members, appointed by the Governor-in-Council, who serve on a part-time basis. The Chair is also the Chief Executive Officer of the PMPRB. Members, including the Chairperson, are responsible collectively for the implementation of the applicable provisions of the Patent Act. They establish the guidelines, rules, by-laws and other policies as provided by the Act and consult as necessary with stakeholders including ministers of health and representatives of consumer groups, the pharmaceutical industry and others. Patentees have a statutory right to a hearing before the PMPRB if they are found to be non compliant with price guidelines.

The 2008-09 MAF Assessment examines whether and to what extent the PMPRB incorporates sound management practices to meet its objectives and results. This assessment focuses on: Strategic directions, results and performance management; HR Management; Risk management and accountability; and Public service values.  The PMPRB’s complete response to the MAF questionnaire is attached as Annex A.

Findings

Strategic Directions, Results and Performance Measurement

This covers MAF areas of management 2, 3, 4, 6, 7, and 8.

The PMPRB has one Strategic Outcome and two supporting Program Activities, and has developed and submitted its performance measurement framework within its Management Resources and Results Structure (MRRS).  The first program activity is: Compliance and enforcement of non-excessive prices for patented medicines; and the second program activity is: Pharmaceutical Trends which involves reporting on the price, cost and utilization trends of all medicines (patented and non-patented) and on R&D spending by patentees). The PMPRB’s programs and resources are aligned with its Strategic Outcome, and its’ Report on Plans and Priorities (RPP) and its Departmental Performance Report (DPR) are based on its approved Program Activity Architecture.

There is evidence of corporate planning, prioritization, and accountability within the organization. The PMPRB states that its planning process includes an environmental scan and a SWOT (strengths, weaknesses, opportunities, threats) analysis, and a risk analysis, and that the resulting strategic plan forms the basis for the RPP. Given the small size of the organization, PMPRB’s efforts to use these planning tools are noted. Additionally, PMPRB’s 2008-09 Integrated Business and HR Plan shows that organization is trying to meet the goals and objectives based on the findings of the assessments. The organization’s strategic plan is approved by the Executive Committee (constituted of a total of eight members) and presented to the Board members

The PMPRB’s capacity to perform program evaluations internally is limited. Nevertheless, it states that it collects relevant information by program activity areas to make program decisions. For example, the Compliance and Enforcement Branch tracks the number of new drugs reviewed, their compliance status, the number of investigations (both open and resolved), and reports to the Board on a quarterly basis.  For the National Prescription Drug Utilization Information System (NPDUIS), semi-annual meetings and conference calls are held with the FPT Steering Committee to identify and prioritize new project topics and to review the outcomes of completed analytical studies. This facilitates the tracking of progress of projects, and provides qualitative information regarding FPT satisfaction with the performance of NPDUIS. Given that the PMPRB is expected to conduct an overall evaluation of how Budget 2008 funding has supported its workload pressures, the PMPRB has engaged an external contractor for this purpose.

The PMPRB has indicated that it reviews, on a quarterly basis, results against its Integrated Business & HR Plan, expenditures, commitments and forecasts, and reallocates resources as needed to emerging priorities.

Stewardship

This covers MAF areas of management 12, 13, 14, 15, 16, 17, 18, and 19.

The PMPRB’s organizational structure responds to the management requirements for information and information technology. The Director of Corporate Services is designated as the Chief Information Officer (CIO) whose functional responsibilities focus on support for the organization’s business strategy. Access to information and Privacy and Internet/Intranet content management are the responsibility of the Secretary of the Board and Communications Manager. The CIO is a member of the management team, and thus fully integrated into the planning and management decision-making process.  The PMPRB states that it has fulfilled most requirements of the Standard of Management of the IT Security, and that any outstanding gaps will be addressed in conjunction with the appointment of a new Chief of Information Technology.  The PMPRB has provided details on how the IM/IT processes are managed.

The majority of PMPRB’s projects are analysis and research-related. With regard to IT, the organization indicates that it follows TBS’ Enhanced Management Framework, and that appropriate training is provided to staff.

Procurement and contracting is handled centrally in the Corporate Services Branch. PMPRB indicates that financial delegation and appropriate approval structures are in place and working well.  There appears to be a formal management oversight of the contracting process, and financial reporting matters.

The PMPRB has developed a business continuity plan, and is working on finalizing it in consultations with Public Safety and Health Canada. For security matters, the PMPRB has indicated that it follows Government Security Policy and related Operational Security Standards and in the event of a breach it calls on Health Canada’s Safety, Emergency and Security Management Division to investigate. The Director of Corporate Services has been designated as the Departmental Security Officer, and is a member of the Management Committee.  The PMPRB has provided details on how the security and business continuity processes are managed.

TBS’ assessment of the PMPRB’s annual reports shows that the PMPRB is not including all mandatory information in these reports to Parliament, despite advice provided by the Secretariat, and hence is not appropriately fulfilling their obligations under the Acts.  Also, there are some outstanding issues related to InfoSource that PMPRB must address, e.g. timely updates and meeting TBS requirements for the InfoSource chapter.  It is important that PMPRB contact the Information and Privacy Policy Division at TBS to address these issues.

The PMPRB’s Management Committee serves as the internal audit and evaluation committee. The organization states that it needs to develop some capacity (commensurate with its size and scope) with regard to audit and evaluation matters. Currently, it relies on outside consultants to do the work.

HR Management

This covers MAF areas of management 1, 10, and 11.

The A-base review done by PMPRB in 2006 allowed the organization to complete a full analysis of its workforce needs and requirements. PMPRB has noted that its policies and processes in place comply with TBS and CPSA directives.  The PMPRB will be implementing a classification monitoring program in 2009-10. Classification was previously performed by Health Canada.

In the attached document, the PMPRB has described how information is regularly shared with staff through all-staff meetings, branch meetings, the intranet, newsletters and communiqués, and through the Workplace Improvement Team which was established in 2005. The PMPRB indicates that the response rate to the 2008 PS Employee Survey was much higher than in previous years (information provided to PMPRB by Statistics Canada).  It is planning to complete an analysis of the information which will provide an insight into how well the organization’s HR plans are functioning, and where there is room for improvement.

Risk management and accountability

This covers MAF AoM 9 and 21.

The PMPRB establishes its challenges, opportunities, and strategies by conducting environmental scans to identify the internal and external factors that may impact on the abilities and successes of the organization in achieving its objectives. It also refers to doing an annual SWOT analyses (strengths, weakness, opportunities, threats) to gauge the abilities of the organization to move forward. Based on these findings the risks are assigned high, medium, and low rankings, and actions are developed to mitigate high risk scenarios. PMPRB includes these actions in its strategic and operational plans.

A majority of the risks identified by the organization do not vary much from year to year, given the nature of its work (e.g. there is always unpredictability whether pharmaceutical companies might respond through voluntary compliance to PMPRB’s guidelines or request a hearing before the Board), therefore the risk management actions have to remain somewhat the same (e.g. revision of guidelines which might lead to fewer challenges and requests for hearings).

With regard to accountability, the PMPRB’s senior management is involved in all planning and management activities. There are performance agreements and results-based assessments. The PMPRB states that the process for these agreements and assessments is in keeping with the broader Public Service Renewal framework, and has submitted more extensive documentation on the MAF portal in this regard.

Opportunities

While this MAF assessment shows the PMPRB’s efforts to strengthened public sector management and accountability, it also highlights a few areas where the organization could make improvements. In particular: Take a more objective approach to the assessment, and use the MAF process to identify strengths and weaknesses of the organization. Given that the PMPRB operates in an environment where there are constant challenges with evolving market forces, science and consumer needs, it is important to have a better understanding of the environment which they operate in. This will allow for a more targeted development of management tools and strategies for the PMPRB to take appropriate steps to build on strengths that exist and minimize weaknesses that may persist.  Evidence of the types of corrective measures that are being put into place, and what progress is being made will make the responses more realistic – focussing only on the positive renders the description a little unrealistic.

• Support the description in the responses to the questionnaire with evidence – show what is working and what is not and how that is being addressed.
• In its future reports to Parliament, PMPRB should focus on reporting performance at the program activity-level and demonstrate how the results achieved led to the realization of the strategic outcome.
• Address the weaknesses identified by TBS in the management of Access to Information and Privacy Program.
• Follow-through on the strategy to address issues that may be identified through the analysis of the organization’s HR plans. Demonstrate what the uptake is on training and other developmental opportunities presented to employees, and what strategies are in place, or could be put into place to improve employee performance and satisfaction.
• Ensure that there is a good understanding of the type of information that can be provided in external documents and reports.

Recommendation

It is recommended that the PMPRB address the opportunities listed above over the next few years, and continue its collaborative relationship with TBS.