April 2007 PMPRB Newsletter Released!

Updates in the April Newsletter include:

1. PMPRB position on Bill 102 rebates: The PMPRB is advising that patentees report "any rebates or discounts required through provincial/territorial legislation, regulation, or negotiated agreement (e.g., resulting from Ontario's Bill 102, Quebec's Bill 130, or other agreements with payers/customers). Patentees are also advised that, beginning with the reporting period ending June 30, 2007, any reduction or like benefit will be included in the calculation of the ATP". This contradicts the PMPRB April 2000 Newsletter which stated that "products supplied under such programs [expenditure limiting agreements between a manufacturer and a public drug plan] could either be included or excluded by the patentees, as long as the inclusion or exclusion was consistent in all reporting periods".

Brogan Comments: There are significant consequences from including the rebates, discounts, etc. provided to provinces in the calculation of the ATP. These include, to name a few:

1- Fluctuation of ATP from year to year which might lead to apparent artificial increases outside of the Guidelines,

2- New line extension launched by the same patentee is restricted by the ATP of the existing DINs; a lower ATP due to rebates, discounts, etc.

3- New entrant in a class where the only comparable medicine is the patentee's product during which time the PMPRB uses the ATP; a lower price due to rebates, discounts, etc.

This change in reporting guidelines has consequences that affect the Board's ability to administer the Patent Act and certainly will affect patentees. Unilateral changes to guidelines is contrary to the PMPRB commitment to consultation and therefore we suggest patentees communicate their concerns directly to the Board members and staff.

In addition, the PMPRB proposal that patentees report rebates paid to the Ontario government may be outside both the Regulations and Patent Act. We advise patentees to seek legal council on the question if the Ontario Ministry of Health is a "customer" as specified in the PMPRB Regulations and if this proposed reporting requirement means the federal government is interfering with provincial matters.

2. Amendments to the Patented Medicines Regulations, 1994: Meetings with Rx&D, BIOTECanada and GCPA lead to PMPRB realizing that "it became clear that amendments as drafted differed from the intention of the Board". As a result, the PMPRB are drafting revisions to the amendments which will be published in the Canada Gazette Part II.

3. Review of the Board's Excessive Price Guidelines: Further consultations on additional factors in the Patent Act which were not considered before will be underway. Bilateral meetings will be organized in the coming weeks and written and oral comments sought . Stay tuned for additional information.

4. NPDUIS: Release of the Canadian Budget Impact Analysis Guidelines (BIA) as well as the first edition of the New Drug Pipeline Monitor (NDPM) are expected in May.

5. Non-Patented Prescription Drug Prices: Third report on Market for New Off-Patented Drugs will be released soon. The fourth report on trends in prices of non-patented single source prescription drugs sold in Canada and abroad is expected in this summer.

6. Foreign Price Verification Factors for 2007: To be published soon on the PMPRB website

7. 2008 CPI Adjustment Factors:
1 year CPI adjustment cap (1.5 * forecast of CPI) = 1.030
3 year CPI adjustment cap (2008 forecast CPI/ benchmark CPI)
For drugs launched in 2005 or earlier, the forecast factor is = 1.057
For drugs launched in 2006, the forecast factor is = 1.036
For drugs launched in 2007, the forecast factor is 2.0% (this will be recalculated once the 2007 actual CPI is known)

8. Macugen a category 2 (substantial improvement): Interim median set by the US "will" be reviewed after 3 years or when 5 countries launches whichever comes first. Note, the Guidelines say "may be reviewed". The price of Macugen will have to be in compliance after the recalculation of the median price.

Feel free to contact any of the Price Regulation Consulting team at Brogan Inc. for more information related to these topics.