Voluntary Compliance Undertaking of Merck Canada Inc. to the Patented Medicine Prices Review Board

1.0 Background

1.1 This Voluntary Compliance Undertaking ("VCU") is for the drug products described in the table below.

1.2 The first patent pertaining to Puregon was issued on March 5, 2013. Puregon came under the jurisdiction of the Patented Medicine Prices Review Board ("PMPRB") upon the date of first sale in October 2001 as this was after the date that the patent was laid open, February 3, 2000.

1.3 Zerbaxa came under the jurisdiction of the PMPRB when it was first sold on January 12, 2016. The last patent pertaining lapsed on October 27, 2016.

1.4 Merck Canada Inc. is the patentee for purposes of the Patent Act and the PMPRB.

2.0 Application of the Excessive Price Guidelines

2.1 All three strengths of Puregon were reviewed as Category 1 new drug products based on the pre-2010 Guidelines. An existing strength of Puregon was identified for comparison purposes. The introductory prices for all three strengths of Puregon exceeded the Maximum Average Potential Price ("MAPP") by an amount which triggered the investigation criteria set out in the Guidelines. These prices continued to exceed the National Non-Excessive Average Prices ("N-NEAP") in the subsequent reporting periods.

2.2 The Human Drug Advisory Panel recommended that Zerbaxa be reviewed as a Slight to No Improvement and identified ciprofloxacin, levofloxacin, ceftazidime, cefepime, piperacillin/tazobactam, imipenem and meropenem for comparison purposes. The introductory price exceeded the MAPP by an amount which triggered the investigation criteria. The price in the subsequent reporting period continued to exceed the thresholds set out in the Guidelines.

2.3 Total cumulative excess revenues for all three strengths of Puregon and Zerbaxa are calculated to be $750,000.00.

3.0 Position of Patentee

3.1 This VCU constitutes no admission by Merck Canada Inc. that the price of any of the drug products subject to this VCU are or were excessive for purposes of the Patent Act.

4.0 Terms of the Voluntary Compliance Undertaking

In order to comply with the Guidelines, Merck Canada Inc. agrees to undertake:

4.1 To agree that the 2016 and 2017 N-NEAPs are as follows:

4.2 To ensure that the 2017 N-ATP of each of the three strengths of Puregon does not exceed its respective 2017 N-NEAP as specified in 4.1 above;

4.3 To make a payment to Her Majesty in right of Canada in the amount of $750,000.00;

4.4 To advise the PMPRB in the event that other patents pertaining to Zerbaxa are issued in any future period; and

4.5 To ensure that the price of the drug products subject to this VCU remain within the thresholds set out in the Guidelines in all future periods during which they are under the PMPRB's jurisdiction.

Name: C. Guindo

Position: President and Managing Director

Patentee: Merck Canada Inc.

Date: June 16, 2017