Canada plans changes to drug pricing rules

Chain Drug Review, News

OTTAWA — The Canadian government is stepping up efforts to rein in the cost of prescription drugs.

At the start of this month, Canada proposed the first major update to the Patented Medicines Regulations in more than 20 years. The regulations, along with the Patent Act, set guidelines for determining if the price of a patented drug is excessive. The act also created the Patented Medicine Prices Review Board (PMPRB) to ensure that drug companies don’t abuse their patent rights by charging consumers excessive prices.

Ginette Petitpas Taylor_Canada_Minister of Health

Ginette Petitpas Taylor

Under current regulations, the government noted, drug companies must report only the direct price reductions they offer customers at the first point of sale, such as drug wholesalers and pharmacy chains. The amendments would require reporting on all price reductions so the PMPRB could account for all reductions when setting price ceilings and monitoring compliance.

“Our government is committed to improving the affordability of patented prescription drugs that Canadians rely upon for their health and well-being. The proposed regulations advance our work with our provincial and territorial partners to ensure Canadians have access to the medicines they need,” Minister of Health Ginette Petitpas Taylor said in a statement.

The proposed regulatory changes center on three measures. One is to provide the PMPRB with new factors to evaluate the price of a patented drug in relation to its value and impact on the health care system. Next, the government aims to update the list of countries used by the PMPRB for drug price comparison to include nations with similar consumer protection measures, economic standing and pharmaceutical markets as Canada.

Also, the changes would implement new reporting requirements to support the above measures plus alter price and revenue information to include all third-party price adjustments, as well as remove reporting requirements for patented drugs with the lowest risk of being priced excessively.

To support the measures, the Canadian government is budgeting $140.3 million over five years, starting in 2017-18, and $18.2 million per year thereafter. A 75-day comment period for the proposed changes runs until February 14, 2018.

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