On 21 August 2019 the long-awaited amendments to the Patented Medicines Regulations were published in Part II of the Canada Gazette.(1) The amended regulations will come into force on 1 July 2020.
These amendments represent the first substantive revision to the regulations since their introduction in 1987 and are a significant departure from the existing framework (for further details please see "Canada releases final amendments to Patented Medicines Regulations"). Major changes include:
- the introduction of three new price regulatory factors;
- a revised schedule of reference countries; and
- modified reporting requirements.
Although the new law will not be in force until 1 July 2020, there are immediate implications. The amended regulations will fully apply to all drugs for which a drug identification number (DIN) is assigned (following regulatory review) on or after 21 August 2019. For drugs assigned a DIN before 21 August 2019, there are certain grandfathering provisions.
The full effect of the regulations will not be understood until the related guidance has been finalised and published. However, pharmaceutical patentees or licensees should be reaching out to their market access and regulatory teams in Canada now in order to prepare for the changed regime.
This article provides an overview of the new substantive requirements and timelines for reporting to help guide these discussions.
Reduced initial reporting requirements for drugs at low risk of excessive pricing
Section 3(3) of the old regulations required information identifying the medicine (as outlined in 3(1)) to be provided no later than the earlier of:
- seven days after the date on which the first notice of compliance was issued in respect of the medicine; and
- seven days after the date on which the medicine was first offered for sale in Canada.
This obligation has been qualified for certain medicines. Under the new Section 3(3.1), this information is required only on request for medicines that the Patented Medicine Prices Review Board (PMPRB) views at low risk of excessive pricing (low-risk medicines), including:
- non-prescription drugs (excluding biologics);
- non-prescription drugs containing a controlled substance;
- generics; and
- veterinary drugs.
Once requested, patentees must provide the information to the PMPRB within 30 days.
For all other medicines, the seven-day reporting rule continues to apply. Thus, for example, for any drug first sold or receiving its first notice of compliance on or after 1 July 2020, this reporting obligation will arise within seven days.
Reduced biannual reporting requirements for drugs at low risk of excessive pricing
The regulations require reporting on pricing and sales information:
- within 30 days of the date on which the medicine is first sold in Canada; and
- within 30 days of the end of each six-month period beginning on 1 January and 1 July of a given year.
These reporting obligations draw in the pricing information relating to the new basket of PMPRB11 countries (for further details please see "Canada releases final amendments to Patented Medicines Pricing Regulations").
These requirements also apply to all drugs at high risk of excessive pricing and thus not only include drugs approved under the new regime, but also drugs assigned a DIN before 21 August 2019. For these drugs, the first reporting may be due as early as 30 days after the new regulations are in force.
Amended Section 4(3) has expanded the categories of drugs exempt from biannual reporting of information to include all of the low-risk drugs noted above. This expands the current list by including, for example, non-prescription controlled substances and generic drugs. For these drugs, such information must be provided at the PMPRB's request, but unlike the old law, that request need no longer be in response to a complaint.
Patentees must report confidential third-party rebates
Under the old regulations, patentees were required only to report information on price adjustments for the first point of sale (ex-factory prices). The amended Sections 4(4)(a) and (b) now expressly require this calculation to account for adjustments not only by the patentee, but also by "any party that directly or indirectly purchases the medicine or reimburses for the purchase of the medicine and any reduction given to any party". This may include "free goods, free services, gifts or any other benefit of a like nature".
These new reporting requirements will apply to all drugs, including those assigned a DIN before 21 August 2019.
Timeline for and exemptions from providing cost-utility analyses for high-cost medicines
Pursuant to the new Section 4.1, patentees of high-cost medicines must provide to the PMPRB every unredacted cost-utility analyses prepared by a publicly funded Canadian organisation (eg, the Canadian Agency for Drugs and Technologies in Health or the National Institute of Excellence in Health and Social Services). The timeline for providing this information differs between drugs offered for sale before and after the coming into force of the regulations and may be due as early as 30 July 2020.
Notably, this new requirement is subject to two important exceptions:
- First, it applies only to drugs that have been assigned a DIN on or after 21 August 2019.
- Second, for low-risk medicines, this information is required only on request.
Timeline for and exemptions from providing market size information
Pursuant to the new Section 4.2, patentees must provide the PMPRB with the estimated maximum use of the medicine in Canada. The timeline for providing this information differs between drugs offered for sale before and after the regulations come into force and may be due as early as 30 July 2020. Should the minister of health issue a notice of compliance approving a new or modified therapeutic use of the medicine, the patentee must provide updated market size information to the PMPRB within 30 days of that approval.
This section does not apply to drugs assigned a DIN before 21 August 2019 and the information need only be provided on request for low-risk medicines.
Draft guidance is expected in early autumn, which will inform the application of the amended regulations. In the meantime, counsel should:
- arrange a meeting between patent and market access or regulatory teams to discuss the implications of the amended regulations; and
- stay tuned for the publication of draft guidance and note the public comment period.
Endnotes
(1) An unofficial consolidated version of the regulations incorporating the proposed amendments is available here.
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