PMPRB Panel – CAHR Market Access 201: Parallel or Intersecting Paths – Future of Public and Private Reimbursement in Canada

June 27, 2017

Topic 1: PMPRB Panel


On Tuesday, June 13, 2017, the Canadian Association for Healthcare Reimbursement (CAHR) held its Market Access 201 conference in Toronto. The theme for this conference was Parallel or Intersecting Paths, the Future of Public and Private Reimbursement in Canada which consisted of five engaging panels focusing on key topics of interest to the Canadian pharmaceutical stakeholders. Over the coming weeks, MORSE will be releasing summaries for each panel to share key learnings from this conference. With the June 28th conclusion of the Health Canada regulatory consultations on the Patented Medicines Regulations, our first summary focuses on the Patent Medicine Prices Review Board (PMPRB).

Session Topic: Patented Medicine Prices Review Board (PMPRB)

Description: This panel focused on the PMPRB’s Guidelines Modernization initiative and regulatory changes that may impact the PMPRB. There was a presentation from a PMPRB representative and some perspective from a pricing expert on its implications to manufacturers. Given the increasing interest of private payers on PMPRB’s activities, a private payer representative also provided some viewpoints on changes at the PMPRB.



Joan McCormick, Principal, Price Regulation, Consulting, QuintilesIMS

Anjila Arora, Director, Pharmaceutical Benefits, Sun Life Financial

Tanya Potashnik, Director, Policy and Economic Analysis Branch, Patented Medicine Prices Review Board (PMPRB)

John-Paul Dowson, Managing Director, Roubaix Strategies (MODERATOR)



Joan McCormick (QuintilesIMS)

  • The current Minister of Health was given her mandate by Justin Trudeau which included the idea to make drugs more affordable and reduce the costs for Canadians.
  • Before the Liberals took power, the conservatives arrived at the conclusion that the PMPRB needed to be strengthened
  • PMPRB argues Canadian prices are high even relative to high priced international comparators
  • International comparisons are complicated
  • The Minister of Health is firmly committed to getting prices down and wants to save public and private payers billions of dollars
  • $700 million dollars saved by pCPA and has had tremendous impact on the healthcare system
  • The Minister is aiming for savings larger than pCPA
  • PMPRB, for the first time, was included in the Federal Budget
  • Hierarchy of legislation, regulation and guidelines
    • Constitution -> Patent Act -> Patented Medicines Regulations -> Guidelines
    • The first three have the force of law and guidelines are not binding, but they give us the rules of the road
    • The guidelines are not law but can be changed through consultation.
  • PMPRB has just wrapped up the Soliris hearing
    • Labelled by some as the most expensive drug in the world
    • $500,000 – $700 000 per patient per year for a chronic illness
    • Initially, Board said yes and later on with exchange rate the price tripped a wire
    • The hearing attracted considerable attention
      • The provinces participated in the hearing
      • CLHIA also participated
    • Discussion around PMPRB because Solaris didn’t break the rules when it was first marketed in Canada
    • The PMPRB’s mandate did not allow it to investigate it from the get go
  • PMPRB says that the limited number of regulatory tools, high price comparator countries and non-transparent pricing have limited its ability to effectively regulate prices in Canada

Anjila Arora (Sun Life)

  • Sun Life offers insurance to over 19,200 employers or 4.9 million Canadians and reimbursed $2.5 billion dollars of prescription drug claims in 2016
  • Drug spending has been increasing over the years – particularly for specialty drugs (28% in 2016 vs. 20% in 2012)
  • Why are we seeing this increase in specialty drug spending?
    • Affecting those with low utilization and high utilization
    • Low prevalence such as rare disease
    • High utilization – high duration and prevalence
  • Generic substitution did not initially have high uptake and now has a 90% adoption rate
  • Other drug solutions such as drug cards, prior authorization, provincial integration, pay direct offer limited controls to spending
  • Sun Life supports the modernization of the PMPRB
  • Traditionally our system has operated in silos, and over the last several years we have seen more integration, and that is the change we need to continue

Tanya Potashnik (PMPRB)

  • Canada has been described as a fragmented system with regard to drug pricing. Publicly funded health care system that does not include universal drug coverage. The PMPRB at a federal level derives authority through the Patent Act and regulate ex-factory price ceilings
  • When the price ceiling and the price intersect its semantics but most prices are 20% below the ceiling
  • There are other players in the pricing space such as the pCPA
  • Private insurers are also negotiating drug prices
  • It is the uninsured and those that pay out-of-pocket that pay some of the highest prices domestically
  • PMPRB factors are quite broad and allow for interpretation
  • PMPRB has been around a long time, and the environment has changed significantly
  • PMPRB wants to follow through with the strategic plan to modernize and identify areas that need to be examined and adapted
  • Problems with current approach
    • Basket of countries that are included need to be examined
    • System rewards therapeutic benefit rather than making sure consumers are protected from abuse of market power
    • Regulatory scrutiny does not distinguish based on risk of abuse of market power
    • Me too drugs can price at the top of the class
    • Increasing use of price discounts (confidential)
  • The PMPRB consulted on these areas of reform in June 2016
    • Received overwhelming feedback
    • 65 submissions
  • What we heard
    • Two types of feedback
      • PMPRB is doing a great job and should continue doing what we are doing
        • International standards
        • CPI has worked
      • Other side felt there was relevance but need for reform
        • Industry and non-industry
        • Non-industry was more on board for relevance
      • General agreement it should continue to exist and not duplicate the efforts of other stakeholders
      • Concern that it will go away from prescriptive approach and desire to continue to have clear tests and processes
      • Discourse about reform at the regulatory level
    • Patentees were aware that Health Canada was watching
    • The consultation that was undertaken was the background that informs the launch of the white paper
    • PMPRB is now waiting to see what will happen, and the Minister of Health needs to update the regulations, and the PMPRB will be responsible for updating the guidelines
      • The regulations and guidelines will need to come in at the same time
    • Five major elements
      1. New factors to help determine whether a price is excessive
      2. Amending the list of countries used for international price comparisons
      3. Reducing regulatory burden for generic drugs with a patent
      4. Modernizing reporting requirements for patentees
      5. Providing information related to third party rebates

Question & Answer Session


Question: There has been some discussion about median price point of the Organization for Economic Cooperation and Development (OECD) which may result in a 20% reduction in prices. Can you comment on that approach and would that be on a going forward basis?

Joan McCormick: We did an analysis of 500 some Drug Information Numbers (DINs) and took out US and Swiss and added Australian prices.  We compared the highest international price and the highest Canadian list price.  Based on this analysis, about 41% of the DINs would have to have some degree of roll back. Most of the 40% would be more than 10% reduction. That is from the highest price.

  • My opinion on retroactive is that if you change the basket and nothing else changes, new drugs and the old drugs will be limited by highest international and the median OECD
  • You’re not going to get to billions of dollars by only changing new drugs as they come to market
  • Changes coming will likely affect both new and old drugs already in the market

Tanya Potashnik: Obviously there will be consultation on guidelines once we have clarity on regulations. Where should Canadian prices be? Unlikely to achieve median of OECD if we have highest international price rule. Appropriate tests and measures will be determined after. Not seeing the same gap as new active substances. The other interpretation is that the likelihood of non-transparent pricing is high. For new active substances (NAS) international price referencing is not a sufficient mechanism by which to affect prices. It is no longer the tool to get those prices.

MORSE thanks our Reimbursement Strategist, Avery Hughes, for diligently preparing these summary notes during the conference. This summary is not a transcript of the presentations/discussions – as such, it may contain some errors/omissions/misinterpretations. Please contact QuintilesIMS, PMPRB, or Sun Life if you would like additional information or clarification on this topic.

Summary of PMPRB Panel presentations/discussions from the June 13th CAHR MA 201 conference. Click To Tweet
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