The guidance is the final step of an effort launched by the federal government in 2017 to reform and empower the Patented Medicine Prices Review Board, which has the authority to investigate if a drug is put on the market at an 'excessive' price.Julio Cortez/The Associated Press
Canada’s drug-price regulator has issued new guidelines for how it evaluates pharmaceutical pricing, which, if they come into force, will mark the end of a years-long legal and regulatory saga.
The new guidelines from the Patented Medicine Prices Review Board lay out how staff should monitor the prices of drugs brought to the Canadian market. In a break from the past, staff are directed to triage cases and only launch in-depth reviews in certain cases, such as if the Canadian price is higher than the highest international price or if a price rises faster than inflation.
Guillaume Couillard, director general of the PMPRB, said the purpose of the new guidelines is to be transparent to the industry on the how the regulator will operate.
“It’s really, how do we continue our mandate of monitoring pricing, and how do we identify cases where we should put our resources and focus,” he said.
One feature of the process is that drugs with no international comparisons are deemed to have passed their initial reviews, whatever the price is. Mr. Couillard said this would incentivize drugmakers to bring their products to the Canadian market first. Pharmaceuticals will be subject to screening in annual reviews thereafter.
The guidance is the final step of an effort launched by the federal government in 2017 to reform and empower the PMPRB, which has the authority to investigate and intervene if a drug is put on the market at an “excessive” price.
The Liberal government unveiled a reform package in 2019 that would have seen the PMPRB gain access to confidential pricing information from drugmakers and would have broadened the factors it weighs when deciding on whether a price is too high. But the package came under fire from the pharmaceutical industry through court challenges and intense lobbying during the COVID-19 pandemic.
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Ultimately only one major change survived, applying to the group of countries whose prices Canada compares its prices to. Notably the U.S., which has the highest drug prices in the world, was left off the list.
Those regulations were put in place in 2022, but the legal challenges and turnover among staff and board members left the operations of the PMPRB uncertain. The body launched further consultations with drugmakers, insurers, patient groups and others. The guidelines released Monday are set to take effect on Jan. 1.
One big change in the final guidelines, compared with draft rules released last year, concerns who can file a complaint with the PMPRB if they feel a drug’s price is excessive. In the draft released in December, three groups were empowered to file complaints: Federal and provincial health ministers, public health plans, and private health plans. In the final form, only health ministers and public plans will be allowed to file complaints with the PMPRB.
That had been opposed by some drugmakers, according to consultation submissions made public by the PMPRB. Lawyers at Fasken Martineau DuMoulin LLP, writing on behalf of pharmaceutical companies Merck, Janssen, Boehringer Ingelheim, Bayer, and Servier, had argued that private insurers could use the complaints process as a tool during price negotiations with drugmakers.
The Canadian Life and Health Insurance Association, which represents private insurers, said it was disappointed by the “unexpected decision” to remove their members from the complaints process.
“The ability to file complaints directly with the PMPRB is a critical tool to help avoid excessive drug prices for the millions of Canadians who depend on access to affordable medication,” association president Stephen Frank said in a statement.
Editor’s note: A previous version of this article incorrectly stated that Review Board staff are being directed to launch in-depth reviews in certain cases, such as if a Canadian price is higher than an international average. A review would be indicated if the Canadian price is higher than the highest international price.