Canada's drug pricing plan prompts backlash

The final version of guidelines issued by Canada’s federal drug price regulator last week has caused uproar among the pharma industry.

The guidelines, which will come into force on January 1, 2021, provide for a “risk-based approach to regulating ceiling prices for patented pharmaceuticals” and change the list of countries with which the Patented Medicine Prices Review Board (PMPRB) compares domestic prices.

Under the new rules, the PMBPR will compare Canadian list prices to prices in Australia, Belgium, Japan, Netherlands, Norway, Spain, the UK, Sweden, France, the UK and Italy.

A number of life sciences associations immediately criticised the guidelines, saying patients will be denied access to treatments.

Judicial review

Innovative Medicines Canada (IMC), an association that represents drugmakers in Canada, said that it has raised concerns about the negative impact that PMPRB’s amendments to the Patented Medicines Guidelines and Regulations will have on Canadian patients for the last five years.

“The final guidelines released today do nothing to relieve those concerns. If implemented, they will have a negative impact on Canadian patients,” said IMC.

It added: “Specifically, innovative new medicines will not launch in Canada, depriving patients of potentially life-changing new treatments; we will see further reductions in the number of clinical trials in this country; and our life sciences sector will lose out on critical investments.”

Last September, IMC and 16 of its member companies had filed an application for a judicial review of the plan, claiming that the federal government doesn’t have authority to  “fundamentally alter” the role of the PMPRB through the recent changes to the Patented Medicines Regulations.

The government had proposed three main amendments to the Regulations in August 2019: new mandatory economic factors for the PMPRB to use in determining whether a price is “excessive”; a replacement of the basket of comparator countries (removing the US from the comparison); and a requirement that the selling price reported to the PMPRB take into account rebates provided by the manufacturer.

In June 2020, the Federal Court of Canada ruled on the application, finding that the government’s amendments relating to use of economic factors in price assessments and the reconstitution of the basket of countries was within its broad regulation-making authority.

However, the court did strike out the provision on reporting of rebates, finding that it was beyond the scope of the government’s regulation-making authority.

The original implementation date (July 1, 2020) was also delayed to January 1, 2021.

Calls for a revisit

According to the Canadian Forum for Rare Disease Innovators (RAREi), Canadian rare disease patients are worse off because of the new price controls.

Bob McLay, chair of RAREi, said: “These changes run directly counter to the federal government throne speech commitment to pursue a national rare disease strategy. They have a disproportionate impact on the most vulnerable people in society.”

Members of RAREi, which is a group of the Canadian operations of global biopharmaceutical companies with a specific focus on treatments for rare diseases, include Biogen Canada, Horizon Therapeutics Canada and Sanofi Genzyme.

Not-for-profit organisation Life Sciences Ontario warned that the new guidelines create a “highly risky and uncertain pathway for commercialising new medicines and vaccines in Canada”.

“The federal government is also exempting COVID-19 vaccines and therapeutics from the new pricing regime, demonstrating that the federal government knows the new regulations are a regulatory barrier, despite their dozens of claims over the past three years to the contrary,” said Life Sciences Ontario.

All of the associations have called on the federal government to revisit its new price controls.

“In the meantime, we will continue to ask that Health Canada delay the January 1, 2021 implementation of the final PMPRB guidelines until after the COVID-19 crisis is passed,” said IMC.

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