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11 September 2019
On 9 August 2019 Health Canada announced the final amendments to the Patented Medicines Regulations.(1) These amendments represent the first substantive revision to the regulations since their introduction in 1987 and are a significant departure from the existing framework. The amended regulations will come into force on 1 July 2020 and are expected to be formally published in the coming weeks.
There are a number of notable changes to the regulations relative to the draft version which was published on 2 December 2017 (for further details please see "Canada releases proposed amendments to patented medicines pricing regulations"):
Together with the Patent Act (Sections 79 to 103), the Patented Medicines Regulations provide the framework and authority by which the government, through the Patented Medicine Prices Review Board (PMPRB), regulates the prices of patented medicines in Canada to avoid excessive prices. The regulatory framework is supplemented by the Compendium of Policies, Guidelines and Procedures, which explains the policies and procedures that the PMPRB normally applies in reviewing the prices of patented medicines sold in Canada. The compendium will be replaced with new guidelines.
Section 85 of the Patent Act lists the factors that the PMPRB must take into account in determining whether a medicine has been sold at an excessive price, including such factors as specified in the Patented Medicines Regulations.
New price regulatory factors
The amendments will provide the PMPRB with three new price regulatory factors:
These factors are said to enable the PMPRB to consider the price of a patented medicine in relation to its value to patients and impact on the healthcare system.(2)
Updated reference countries
The amendments will update the schedule that lists the countries for which patentees must report pricing information. The proposal:
The updated countries are said to provide the PMPRB with the information needed to regulate prices based on comparisons that are more closely aligned with the PMPRB's mandate and Canada's domestic policy priorities.(3)
Changes in reporting requirements
Reduced reporting requirements for specific medicines
The amendments will reduce the reporting obligations for patented veterinary, over-the-counter (apart from non-prescription Schedule D drugs such as vaccines and insulin) and generic medicines. Without a specific request, the reporting requirements would not apply.(4)
Added reporting requirements relating to new price regulatory factors
The amendments will revise the price information reporting requirements to extend to two of the new price regulatory factors:
Information regarding the final new factor, the GDP in Canada and the GDP per capita will be obtained from Statistics Canada.(5)
Reporting of third-party price rebates
The amendments will require patentees to report price and revenue information that is net of all price or other adjustments, including discounts, rebates and free goods and services made by the patentee or "any party that directly or indirectly purchases the medicine or reimburses for the purchase of the medicine".(6)
Pursuant to the new Section 2.1, medicines that have been assigned a DIN before the amendments were published in Part II of the Canada Gazette (expected in the coming weeks) are exempt from the three new price regulatory factors (ie, pharmacoeconomic value, market size and GDP in Canada and GDP per capita in Canada). Such medicines are otherwise subject to the amended regulations.
It is expected that the PMBRB will publish draft guidelines in early autumn, followed by a consultation period.
For further information on this topic please contact Abigail Smith or Nancy Pei at Smart & Biggar's Toronto office by telephone (+1 416 593 5514) or email (firstname.lastname@example.org or email@example.com). Alternatively, please contact Daphne Lainson at Smart & Biggar's Ottawa office by telephone (+1 613 232 2486) or email (firstname.lastname@example.org). The Smart & Biggar website can be accessed at www.smart-biggar.ca.
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