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

1 Product Summary

1.1 Differin Pledget (adapalene) is a patented medicine sold in Canada by Galderma Canada Inc. (Galderma).

1.2 Adapalene is used for the topical treatment of acne vulgaris. Adapalene 0.1% is supplied in a cream, gel and solution.

1.3 Canadian Patent 1,266,646 pertaining to Differin Topical Liquid was granted to C.I.R.D., France (now Galderma R&D, France) on March 13, 1990 and will expire on March 13, 2007. Galderma is the patentee for purposes of the Patented Medicine Prices Review Board (the Board).

1.4 Health Canada issued a Notice of Compliance to Galderma for Differin Pledget Solution 1mg/ml (DIN 02148757) on January 24, 1995. Galderma began selling Differin Pledget on July 1, 2001 at a price of $0.7774 per ml.

2 Application of the Excessive Price Guidelines

2.1 Board Staff conducted its review of the price of Differin Pledget Solution in accordance with the Board's Excessive Price Guidelines. Differin Pledget was classified as a category 1 new medicine in that it is a new DIN of a comparable dosage form of an existing medicine. A Reasonable Relationship (RR) Test and International Price Comparison (IPC) Test were conducted.

2.2 By applying the Board's Excessive Price Guidelines, Board Staff concluded that the price of Differin Pledget Solution exceeded the 2001 Maximum Non-Excessive (MNE) price of $0.5780 per ml by 34.5% with resulting excess revenues of $17,575.12 during the introductory period July 1, 2001 to December 31, 2001.

3 Terms of the Voluntary Compliance Undertaking

3.1 This Voluntary Compliance Undertaking (VCU) constitutes no admission by Galderma that the price of Differin Pledget Solution is or was excessive for purposes of the Patent Act.

3.2 In order to comply with the Excessive Price Guidelines and policies of the Board, Galderma undertakes as follows:

3.2.1 To reduce the average selling price within 30 days of acceptance of this VCU so that the average price for 2002 does not exceed the 2002 MNE.

3.2.2 To advise customers that price reductions have been implemented as a result of this undertaking.

3.2.3 To offset excess revenues received by Galderma for the sale of Differin Pledget during the period July 1, 2001 to December 31, 2001 by making a payment to Her Majesty the Queen in the right of Canada, within 30 days of the acceptance of this undertaking, in the amount of $17,575.

3.2.4 To ensure that the price of Differin Pledget remains within the Guidelines in all future periods in which it remains under the Board's jurisdiction.

Galderma Canada Inc.

Signature: Denis Roy
(original signed by)
Title: Director of Marketing
Date: August 12, 2002