PMPRB Releases Draft New Compendium

• Maximum Average Potential Price: "upper price threshold for the introductory average price in any and all markets"
• Non-Excessive Average Price: replaces the term Maximum Non-excessive Price for existing medicines
• Each of these terms can be applied at the "National Level" or the "Market-Specific Level"
• "Market-Specific" is defined to be either an individual province/territory or an individual trade level (wholesaler, hospital, pharmacy)

• International prices submitted by patentees are no longer protected by Section 85 of the Patent Act

• conducted at introduction
• conducted during an investigation (NB appears that a previously non-excessive national prices being found to be excessive)

• move forward creating moderate improvement class & adopting primary & secondary factors
• restrict secondary factors to increasing level of therapeutic improvement up to moderate improvement

• if there are no comparators for a moderate improvement - use Median International Price Comparison
• if there are no comparators for a slight or no improvement use lowest price of superior TCC (if there are superior comparators) or Median International Price Comparison whichever is lower (NB No mention of inferior comparators. Lowest of superior comparators is likely a generic introduced 40 years ago...)

• national ATP if same patentee
• public price close to National Non-excessive Average Price for patented drugs (NB this can result in PMPRB revealing existence of confidential low ATP to competitors) or non-patented drugs (NB this is not consistent with Adderall XR Admissibility of Evidence decision)
• can still exclude a product that may be sold at an excessive price (TCC) Reasonable Relationship Test
• only for same chemical, same indication/use (NB use in this context introduces a great deal of uncertainty), comparable dosage form, same dosage regimen
• reverse proposal to force Different Strength test to always rely on price per mg (NB positive change)
• modify to allow zero slope flat pricing and adjustment for lines with negative y intercept (NB impact to be determined)

• test still only included in enforcement cases
• only rely on median for class or median ratio
• include foreign generics if sold in Canada (NB generics can substantially alter a median)

• 2 periods to re-align if offside due to Highest International Price Comparison or adjustment of Median International Price Comparison
• where interim median applies, CPI will restrict price increase following 3 years or entry of 5 countries (NB disincentive for early introduction to Canada)
• where product not sold in any country - Staffmay rely on most similar strengths of comparable dosage forms for the same patentee (NB This has been Staff practice)

• exemption from Highest International Price Comparison test was revoked - introductory price review limited to brand, no other comparators included

• Guidelines continue to read that the 1 year cap is based on the forecast - contradicts use of actual in section 3.4 pg20
• DIP methodology (Schedule 10) allows prices that decrease as a result of a benefit to go back up upon the reduction or termination of that benefit. Criteria are provided describing what level of evidence is necessary e.g. customers know that benefit was not offered to all customers (NB what if it was offered to all, but only some accepted the terms). Also require information in regards to whether customer continues to receive other benefits (NB no mention of the relevance to calculation)
• the threshold to which a price may return is calculated based on market level pricing (NB the Board definition of market does not distinguish between tender and non-tender markets). It is either the highest current market ATP (if benefits were in place at intro) or the highest past price of that market (if benefits were not available at intro)
• sales mix shift recognized as valid reason to deviate from CPI rules - but only where shift is across PMPRB markets (NB no recognition that shift is often within a market).
• where a cost of making & marketing argument can be made - Board may rebenchmark a product e.g. at NOC
• CPI calculations may be conducted for each market (NB complex & can produce anomalous results - different benchmark for every market)
• No mention of correcting the methodology to prevent price decreases due to methodology - as committed in May 2007 Communiqué (NB CPI may perform outside the norm in coming years)

• investigation triggers require exceeding allowable by 5% or >=$50,000 in excess or complaints
• excess revenues will be calculated at the national level (NB this does not always result in a more favourable outcome for patentees)
• allows for price to rebound if reduced as part of an offset (exemption from CPI rule)
• once investigation is triggered, excess can only be offset via VCU or Board decision.
• excess revenues need to be repaid within 3 years - even if an investigation trigger has not been reached
• repayment of excess via price reduction requires that the price be reduced below the previous year

• publication of CPI inflated prices is being considered by Board; however, these would not be used in PMPRB price comparisons. (NB: The value of such an undertaking is not clear)