ARCHIVED - Patented Medicine Prices Review Board - Report

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Section II: Analysis of Program Activities by Strategic Outcome(s)

Strategic Outcome

Canadians are protected from excessive prices for patented medicines sold in Canada and stakeholders are informed on pharmaceutical trends.

Program Activity: Patented Medicine Prices Regulation Program

Program Activity Description

The Patented Medicine Prices Review Board (PMPRB) is an independent quasi-judicial body that is responsible for ensuring that the prices that patentees charge for patented medicines sold in Canada are not excessive based on the price review factors in the Patent Act (the Act). To make this determination the Board must consider each of the following factors: prices at which the medicine and other medicines in the same therapeutic class have been sold in Canada and in the seven comparator countries listed in the Patented Medicines Regulations (Regulations); changes in the Consumer Price Index (CPI); and in accordance with the Act, such other factors as may be specified in any regulations made for the purposes of the price review. Under the Act, and as per the Regulations, patentees are required to file price and sales information for each patented medicine sold in Canada, for the duration of the patent(s). Board Staff reviews the introductory and ongoing information filed by patentees, for all patented medicines sold in Canada. When it finds that the price of a patented medicine appears to be excessive, Board Staff will conduct an investigation into the price. An investigation could result in: its closure where it is concluded that the price was non-excessive; a Voluntary Compliance Undertaking (VCU) by the patentee to reduce the price and offset excess revenues obtained as a result of excessive prices through a payment and/or a price reduction of another patented drug product; or a public hearing to determine if the price is excessive, including any remedial order determined by the Board. In the event that the Board Hearing Panel finds, after a public hearing, that a price is or was excessive, it may order the patentee to reduce the price and take measures to offset any excess revenues. This program, by reviewing the prices charged by patentees for patented medicines sold in Canada, protects Canadians and the health care system from excessive prices.

Financial Resources ($ thousands)

2012–13	2013–14	2014–15
7,508.1	7,508.1	7,508.1

Human Resources (FTEs)

2012–13	2013–14	2014–15
44.0	44.0	44.0

Program Activity Expected Results	Performance Indicators	Targets
Patentees comply with the Patent Act, the Regulations and the Excessive Price Guidelines (Guidelines)	Percentage of patented medicines that are priced, as a result of voluntary compliance, within the guidelines or at a price which does not trigger the investigation criteria	95% of patented medicines are voluntarily priced within guidelines or at a price which does not trigger the investigation criteria
	Percentage of patented medicines that are subject to a Board Order	100% of Board Orders are complied with

Planning Highlights

The PMPRB is responsible for ensuring that the prices that patentees charge, the “factory-gate” price, for patented medicines sold in Canada for human or veterinary use, are not excessive. The PMPRB relies on voluntary compliance whenever possible since it is less time consuming and less costly to all parties. Voluntary compliance by patentees is facilitated by published Guidelines, which are intended to assist patentees in setting prices that are not excessive by providing transparent and predictable information on how the price review will be carried out.

Since the implementation of the new Guidelines in January 2010, Board Staff has been monitoring and evaluating the application and impact of the major changes on an ongoing basis. In June 2011, the PMPRB published its Monitoring and Evaluation Plan for the Major Changes in the Guidelines and in December 2011 it provided the first annual assessment under the plan. This plan will assist the Board in assessing the impact and application of the major changes to the Guidelines. These impacts may not be immediately apparent due to the timing of the regulatory filings of patentees, the price review process of existing patented medicines which is based on a full calendar year, and the fact that it may take several reporting periods before any discernible trends become evident. The Board will monitor emerging issues to identify the need for any future amendments to the Guidelines or this Plan.

The key priorities for the Patented Medicine Prices Regulation (Prices Regulation) Program over the planning period are:

• Continue to monitor and evaluate the impact of the new Guidelines.
• Adjust the Guidelines, as appropriate, to address issues identified through the monitoring and evaluation plan and/or the PMPRB Program Evaluation conducted in 2011-12.
• Examine alternative dispute resolution options for resolving non-compliance.
• Assess the current and evolving environment of the Prices Regulation Program in order to identify what, if any, changes can be implemented to increase efficiency of the price reviews of new and existing patented medicines and the investigation process.
• Consider options for reducing regulatory burden
• Continue the implementation of non-industry stakeholder engagement activities
• Consider options for more effectively using Board Staff resources

Benefits for Canadians

This program activity contributes to the Government of Canada outcome of Healthy Canadians by ensuring that prices of patented medicines are not excessive. Price reviews, investigations and, when necessary, hearings must be conducted in a transparent, effective and timely fashion so as to protect the interests of consumers and the Canadian health care system.

Program Activity: Pharmaceutical Trends Program

Program Activity Description

The PMPRB reports annually to Parliament through the Minister of Health on its price review activities, the prices of patented medicines and price trends for all drugs, and R&D expenditures as reported by pharmaceutical patentees. In supporting this requirement, the pharmaceutical trends program provides complete and accurate information on trends in manufacturers' prices of patented medicines sold in Canada and on patentees' research-and-development expenditures to interested stakeholders including: industry (i.e., brand-name, biotech, generic); federal, provincial and territorial (F/P/T) governments; consumer and patient advocacy groups; third party payers; and others. This information also provides assurance to Canadians that the prices of patented medicines are not excessive. In addition, as a result of the establishment of the National Prescription Drug Utilization Information System (NPDUIS) by F/P/T ministers of health the Minister of Health requested that the PMPRB conduct analysis of price, utilization and cost trends for prescription drugs so that Canada’s health system has more comprehensive, accurate information on how prescriptions drugs are being used and on the sources of cost increases. Furthermore, in 2005, as a result of the National Pharmaceutical Strategy which was part of the First Ministers’ 10-Year Plan to Strengthen Health Care, the Minister of Health on behalf of F/P/T Ministers of Health, requested the PMPRB also monitors and reports on non-patented prescription drug prices.

Financial Resources ($ thousands)

2012–13	2013–14	2014–15
1,265.4	1,265.4	1,265.4

Human Resources (FTEs)

2012–13	2013–14	2014–15
13.0	13.0	13.0

Program Activity Expected Results	Performance Indicators	Targets
Stakeholders have access to comprehensive, relevant and accurate information on pharmaceutical trends	Number of studies related to research priorities identified by stakeholders	Minimum one study for each research priority identified per year

Planning Highlights

The PMPRB provides analysis of pharmaceutical price trends and research and development spending by pharmaceutical patentees. It also provides critical analyses of price, utilization and cost trends for prescription drugs. The PMPRB reports on these analytical studies and its price review and enforcement activities as they relate to excessive pricing for patented drug products, annually to Parliament through the Minister of Health. The PMPRB also publishes specific NPDUIS reports based on the research and reporting priorities identified by the NPDUIS Steering Committee.

The PMPRB will continue to provide relevant and timely reporting, provide credible pharmaceutical trend information and contribute to the information needs of a variety of policy decision-makers by:

• reporting to Parliament through the Minister of Health, on the PMPRB’s price review activities, the prices of patented medicines and price trends for all drugs, and R&D expenditures as reported by pharmaceutical patentees;
• responding to F/P/T information needs identified by the NPDUIS Steering Committee;
• reporting to the NPDUIS Steering Committee on the progress of NPDUIS activities; and publishing NPDUIS reports and/or providing the results of relevant research analysis.

Benefits for Canadians

This program activity contributes to the Government of Canada outcome of Healthy Canadians by providing critical analyses of price, utilization and cost trends so that Canada’s health system has more comprehensive and accurate information to inform drug policy decision-making.

Program Activity: Internal Services

Program Activity Description

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

Financial Resources ($ thousands)

2012–13	2013–14	2014–15
3,058.9	3,058.9	3,058.9

Human Resources (FTEs)

2012–13	2013–14	2014–15
19.0	19.0	19.0

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