VCU accepted November 16, 2004
Voluntary Compliance Undertaking of ESP Pharma to the Patented Medicine Prices Review Board

1.0 Product Summary:

1.1 Busulfex (IV busulfan) is a patented medicine being sold in Canada by ESP Pharma (ESP).

1.2 Busulfex is an antineoplastic agent indicated for use in combination with other chemotherapeutic agents and/or radiotherapy as a conditioning regimen prior to hematopoietic progenitor cell transplantation (HPCT), or bone marrow transplant. Busulfex is available in 60 mg/10ml injectable ampoules and in Canada is sold exclusively to hospitals. Its Anatomical, Therapeutic, Chemical (ATC) System classification is A03AE02.

1.3 Canadian Patent No. 2,171,738 pertaining to Busulfex was issued July 16, 2002 to University of Houston, USA and will expire August 30, 2014. Orphan Medical was the patentee for purposes of the PMPRB.

1.4 Orphan Medical began selling Busulfex under Health Canada's Special Access Program (SAP) on April 26, 1999 at an average price of $356.2500 per ampoule.

1.5 Health Canada issued a Notice of Compliance for Busulfex (DIN 02240602) to Orphan Medical on July 22, 1999.

1.6 Orphan Medical sold the rights for Busulfex to ESP Pharma on June 10, 2003. ESP Pharma is now the patentee for purposes of the PMPRB.

1.7 Health Canada issued a Notice of Compliance for Busulfex to ESP Pharma on July 21, 2003.

1.8 ESP Pharma increased the price of Busulfex to $386.0647 per ampoule in January 2004.

2.0 Application of the Excessive Price Guidelines:

2.1 The PMPRB's Human Drug Advisory Panel (HDAP) recommended that Busulfex be classified as a category 2 new medicine. The HDAP also recommended that there are no appropriate comparators for purposes of conducting a Therapeutic Class Comparison (TCC) under the Guidelines.

2.2 Board Staff conducted its review of the price of Busulfex in accordance with the PMPRB's Excessive Price Guidelines (the “Guidelines”). For a category 2 new medicine with no comparators, the Guidelines state that the introductory price will be presumed to be excessive if it exceeds the median of the international prices identified in an International Price Comparison (IPC) test.

2.3 The results of the IPC test indicated that, at introduction in 1999, the average selling price of Busulfex, $356.2500 per ampoule, exceeded the maximum non-excessive (MNE) price of $330.4378 by 7.8%.

2.4 The average selling price of Busulfex remained unchanged until 2004 and exceeded the CPI-adjusted MNE price in each year until 2003. With the increase in price in 2004 to $386.0647 per ampoule, the price again exceeded the Guidelines by 7.3%. As a result, there are cumulative revenues in excess of the Guidelines from 1999 to June 30, 2004 of $144,215.55.

3.0 Terms of the Voluntary Compliance Undertaking:

3.1 This Voluntary Compliance Undertaking (VCU) constitutes no admission by ESP Pharma that the price of Busulfex is or was excessive for purposes of the Patent Act.

3.2 In order to comply with the Guidelines, ESP Pharma undertakes as follows:

3.2.1. To agree that the MNE price of Busulfex was $330.4378 per ampoule for 1999 and $359.8928 per ampoule for 2004.

3.2.2. To reduce the average selling price of Busulfex to the 2004 MNE price of $359.8928 on or before November 1, 2004 and to ensure that the price remains within the Guidelines while it is under the PMPRB's jurisdiction, at least until August 30, 2014.

3.2.3. To offset excess revenues received during the period April 26, 1999 to June 30, 2004 by making a payment to Her Majesty the Queen in Right of Canada, within 30 days of acceptance of this VCU, in the amount of $144,215.55.

3.2.4. To file with the PMPRB within 15 days of acceptance of this VCU the price and sales data for Busulfex for the period July 1, 2004 to October 31, 2004 in the form required by the Regulations. (Filing by December 15, 2004)

3.2.5. To offset any excess revenues received during the period July 1, 2004 to October 31, 2004 by making a payment to Her Majesty the Queen in Right of Canada within 30 days of the filing of price and sales data as required in paragraph 3.2.4 above in the amount of the excess revenues, as calculated by the PMPRB, received as a result of selling Busulfex at prices higher than the MNE price of $359.8928 calculated under the Guidelines during that period.

3.2.6. Within 15 days of acceptance of this VCU, to provide notice to customers of the price reduction for Busulfex and that this price reduction is the result of an undertaking to the PMPRB and to provide a reference to the PMPRB website for the complete text of the VCU, and to further provide copies of such notifications to the PMPRB forthwith.(Notice by December 15, 2004)

Signature: Original signed by Richard J. Brown

Company Officer: Richard J. Brown

Position: Chif Regulatory Officer

Date: October 29, 2004