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What changes to pricing guidelines mean for drugs in Canada

February 10, 2022
Charles River Associates Yellow Pill Production Line

In this article originally published in European Pharmaceutical Manufacturer Ashley Fraser and Clara Zacharko look at what revised guidelines to the Patented Medicine Prices Review Board mean for drug pricing in Canada.

After multiple delays, the PMPRB (Patented Medicine Prices Review Board) is expected to implement revised guidelines within 2022, which include an update to the reference basket of international price comparator countries. These changes are likely to drive a significant reduction in the list price ceiling for new medicines launching in Canada, affecting existing pricing and access decision-making processes and decreasing manufacturer willingness to invest in the Canadian market.

PMPRB: Overview of key changes

The PMPRB regulates the ceiling prices of patented medicines sold in Canada and reports on pricing trends in the pharmaceutical industry. It has a statutory mandate to protect Canadians from excessive medicine prices. After multiple delays, revised guidelines governing the process by which the PMPRB assesses whether a patented medicine is priced excessively are expected to come into effect within 2022. The most significant changes in the guidelines include:

Update to the reference basket of international price comparator countries from “PMPRB7 (France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the United States) to “PMPRB11” (Australia, Belgium, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden, and the United Kingdom)

For certain new medicines, consideration of pharmacoeconomic value in Canada, including cost per quality-adjusted life year (QALY), size of market across players, and annual per-patient cost in relation to per-capita GDP.

Under the new guidelines, the list price ceiling for new medicines will be set using the median list price of the PMPRB11. New medicines classified as “Category I” (treatment cost >150% GDP per capita or Canadian sales >$50M) could also be subject to a “maximum rebated price”, in circumstances where they fail to comply with the median list price ceiling from PMPRB11 and a further investigation is triggered. The maximum rebated price will be in part based on a pharmacoeconomic value assessment determining cost / QALY. This data will likely be sourced from the national health technology assessment agency (HTA), Canadian Agency for Drugs and Technologies in Health (CADTH) and the Quebec-specific HTA, Institut national d’excellence en santé et services sociaux (INESSS) reviews. Depending on cost / QALY, a 20-50% reduction off the maximum list price will be applied.

List price ceiling for existing medicines (grandfathered, line extensions) will be set using the lower of the highest list price from the PMPRB11 or ceiling price from the previous PMPRB guidelines. For gap medicines (filed on or after August 21, 2019 and first sold prior to July 1, 2021), the list price ceiling will be set using the lower of the median list price from the PMPRB11 or ceiling price under the previous PMPRB guidelines.

Click here to read more at European Pharmaceutical Manufacturer.

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