November 27 2017
The Patented Medicine Prices Review Board (PMPRB) recently announced the release of a hearing panel's decision regarding the pricing of Alexion's Soliris (eculizumab) drug, which has been sold in Canada since 2009.
Soliris is a breakthrough drug indicated for the treatment of paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome – both rare and life-threatening disorders. According to the board's guidelines, the highest permitted price of a breakthrough drug at introduction (ie, the maximum average potential price) is the median price of the seven comparator countries listed in the Patented Medicines Regulations. In subsequent years, the highest permitted price is the lower of:
The board considered its consumer protection mandate in determining whether the pricing was excessive according to the factors set out in Section 85(1) of the Patent Act, which include:
The panel agreed with the board that:
The panel assumed that by selling Soliris at the lowest international price in the United Kingdom, Alexion was covering its costs and earning a normal rate of return. Further, it found no justification as to why Canadians should pay significantly more than in the United Kingdom (and the United States) and considered the significant impact that the cost was having on Canada's healthcare budget.
The panel rejected Alexion's main argument that the guidelines were inappropriate regarding the permitted increases in subsequent years as the fluctuations in exchange rates and the appreciation of the Canadian dollar had resulted in the Canadian price appearing higher than the international comparators, but remaining unchanged (and in fact decreasing) based on changes to the Consumer Price Index. The panel concluded that foreign prices must be converted into Canadian dollars for comparison purposes and that exchange rate fluctuations are the patentee's responsibility.
The panel concluded that Alexion had sold Soliris at an excessive price from 2009 to 2015, as the price exceeded the lowest international price. While the panel believed that the correct benchmark was the lowest international price as of the date of first sale, it required Alexion to comply with this only as of the date of the decision, as the board had consistently applied the highest international price comparison test until 2015. For the 2009 to 2017 period, the guidelines are to be applied to calculate excess revenues. The panel will then issue a further decision, after which Alexion must make payment.
Alexion has sought judicial review of the panel's decision.
On October 11 2017 the PMPRB announced the publication of a report titled "Alignment Among Public Formularies in Canada – Part 1: General Overview". The report, which is based on 2015 data, compares drugs covered by the public drug plans to determine the extent of overlap in coverage. The report's key findings are as follows:
On September 21 2017 – in response to an unopposed request filed by the PMPRB to do so – a hearing panel discontinued an excessive pricing proceeding relating to Apotex's Apo-Salvent CFC Free. The panel held that it was not in the public's interest to continue the proceeding because, among other things, it had been on hold for approximately nine years and, given the passage of time, the PMPRB "would face significant evidentiary challenges" if the proceeding were to continue.
For further information on this topic please contact Andrew Mandlsohn at Smart & Biggar/Fetherstonhaugh by telephone (+1 416 593 5514) or email (firstname.lastname@example.org). The Smart & Biggar/Fetherstonhaugh website can be accessed at www.smart-biggar.ca.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.