News Alert: Quebec Court of Appeal Rules Against PMPRB Amendments

PRICENTRIC BRIEF:

  • The Quebec Court of Appeal has found the plan to introduce new economic factors and require the disclosure of confidential rebates under the Patented Medicine Prices Review Board (PMPRB) amendments to be invalid while supporting the reference basket shakeup — dubbed the PMPRB 11.
  • Today’s ruling followed an appeal of the judgment of the Honorable Sophia Picard of the Superior Court, district of Montreal, from December 2020; the pharmaceutical companies concerned over the PMPRB guidelines argued against the “scope of the federal government’s jurisdiction to regulate the prices of patented medicines sold in Canada” as pursued in these amendments.
  • The Quebecois court ruled the amendments to be an unconstitutional maneuver by the federal government since the enhanced powers bestowed by the PMPRB amendments are a form of price control and not a way to tackle patent abuse or excessive pricing, the new economic factors were found to be an arbitrary point of focus for the agency and not related to drug patent jurisdiction, and the PMPRB has no power over the prices of patented medicines beyond the ex-factory price.

THE DETAILS 

MONTREAL, Canada — The Quebec Court of Appeal has found the plan to introduce new economic factors and require the disclosure of confidential rebates under the Patented Medicine Prices Review Board (PMPRB) amendments to be invalid while supporting the reference basket shakeup — dubbed the PMPRB 11.

The PMPRB amendments have been stalled four times so far and now have a new implementation date of July 1, 2022. Initially, they were supposed to take effect at the start of this year but were once again delayed because, according to Minister of Health Jean-Yves Duclos, “To bring these amendments into force, in the context of a global pandemic, requires preparedness and consultation. … A delay also allows the government to further engage stakeholders.”

The amendments to PMPRB take aim at all patented medicines and propose a pharmaco-economic value be applied to drugs with high costs/sales to gauge how much improvement they offer over existing therapies.

Notably, the PMPRB will rely on an updated basket of reference countries — the PMPRB11 — that will comprise France, Germany, Italy, Sweden, the UK, Australia, Belgium, Japan, the Netherlands and Spain. The U.S. and Sweden were swapped out for markets where drug prices tend to be lower.

Drugs with a 12-month treatment cost surpassing 150% of GDP per capita and treatments with estimated or actual sales of more than CA$50 million per year will be required to undergo additional review, with the potential for substantial price reductions off list prices.

PMPRB specified that its new guidelines would be applicable to a medicine depending on when it first received its eight-digit Drug Identification Number (DIN). Products that received a DIN before a certain date will be grandfathered in, whereas those that obtain the DIN after this date will be subject to PMPRB review. However, grandfathered and gap medicines are still subject to review but under somewhat different rules (e.g., no pharmacoeconomic assessment, regardless of cost/market size).

Lastly, the amendments would have patentees disclose to the PMPRB the price obtained for a patented medicine, taking into account confidential rebates granted to public prescription insurance plans, meaning drugmakers will be forced to disclose some confidential discounts to the regulatory agency.

The amendments have come under fire by the industry — in particular, industry bloc Innovative Medicines Canada (IMC) — and multiple patient advocacy groups, all of which have warned that enacting stringent price controls on new medicines will have repercussions on patient access.

Today’s ruling followed an appeal of the judgment of the Honorable Sophia Picard of the Superior Court, district of Montreal, from December 2020.

The pharmaceutical companies concerned over the PMPRB guidelines — Merck Canada, Janssen Canada, Servier Canada, Boehringer Ingelheim (Canada), Bayer and Avir — argued against the “scope of the federal government’s jurisdiction to regulate the prices of patented medicines sold in Canada” as pursued in these amendments.

The Quebecois court ruled the amendments to be an unconstitutional maneuver by the federal government since the enhanced powers bestowed by the PMPRB amendments are a form of price control and not a way to tackle patent abuse or excessive pricing. Further, the new economic factors were found to be an arbitrary point of focus for the agency and not related to drug patent jurisdiction. And lastly, the court also ruled that the PMPRB has no power over the prices of patented medicines beyond the ex-factory price.

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