Discussion Guide

Comments Received

Patentees

Consumers

Federal/Provincial/Territorial

Others

More detailed information will be posted as they become available.

*Please note that the PMPRB must post comments received in the language of sender.

Comments Recieved - Laurie Dotto

Laurie Dotto
Director
Government and External Affairs
Abbott Laboratories, Limited
Laboratories Abbott, Limitée
P.O. Box/C.P 6150
Station/Succursale Centre-Ville
Montréal (Québec) H3C 3K6
Tel/Tél. : 514.832.7126
Fax/Téléc. : 514.832.7858

Comments Recieved - Geoff Sprang

Geoff Sprang
Director, Corporate Affairs
AMGEN CANADA INC

Comments Recieved - Michael S. Cloutier

Michael S. Cloutier
President and CEO
AstraZeneca Canada Inc
1004 Middlegate Road
Mississauga, Ontario
Canada, L4Y 1M4
TEL 905-804-5840
FAX 905-275-0494
www.astrazeneca.ca

Comments Recieved - Philip Blake

Philip Blake
President and CEO
Bayer Inc
77 Belfield Road
Toronto, Ontario
M9W 1G6
Tel.(416) 248-3000
Fax.(416) 248-6768
philip.blake.b@bayer.com

Comments Recieved - Philip Schwab

Philip Schwab
Vice-President, Policy and Sector Affairs
BIOTECanada
420-130 rue Albert Street,
Ottawa, Ontario,
Canada KIP 5G4
613.230.5585.
613.563.8850
www.biotech.ca

Comments Recieved - Douglas Herman

Douglas Herman
Vice President & General Manager
BIOVAIL
7150 Mississauga Road
Mississauga, Ontario Canada
L5N 8M5
www.biovail.com

Comments Recieved - Ian R. Mills

Ian R. Mills
Corporate Administration
President and CEO
Boehringer Ingelheim
5180 South Service Road
Burlington, ON Canada
L7L 5H4
Telephone: 905-639-0333
Telefax: 905-639-3769
www.boehringer-ingelheim.com

Comments Recieved - Terry McCool

Terry McCool
Vice President, Corporate Affairs
Eli Lilly Canada Inc.
3650 Danforth Avenue
Toronto, On M1N 2E8
Canada

Comments Recieved - Paul N. Lucas

Paul N. Lucas
President & CEO
GlaxoSmithKline
Constitution Square
850 Albert Street, Suite 2010
Ottawa, Ontario K1R 1A4
Tel. 613.569.6649
Fax. 613.569.6822
www.gsk.com

Comments Recieved - Ilona Torontali

Ilona Torontali
Vice President
Public Affairs, Corporate Communications,
Market Access, Health Outcomes & Pricing
Hoffmann-La Roche Limited

Comments Recieved - Penny Albright

Penny Albright
Vice President, Government and Health Economics
Janssen-Ortho Inc.
19 Green Belt Drive
Toronto, Ontario
Canada M3C 1L9
Tel: 416.449-9444
Fax: 416.449-2658
www.janssen-ortho.com

Comments Recieved - Paul Kidson

Paul Kidson
Leo Pharma

Comments Recieved - Gregg Szabo

Gregg Szabo
Executive Director, Policy & Reimbursement
Merck Frosst Canada Ltd.
P.O. Box 1005
Point-Claire - Dorval
Quebec H9R 4P8
Telephone: 514.428.7920
www.merckfrosst.com

Comments Recieved - Alain Boisvert

Alain Boisvert
Vice President
Health Policy and Market Access
Novartis Pharmaceuticals Canada Inc.
385 Bouchard Boulevard
Dorval QC Canada H9S 1A9
Tel 1 (514) 828-4511
Fax 1 (514) 631-0307
alain.boisvert@novartis.com

Comments Recieved - Vince Lamanna

Vince Lamanna
President
Novo Nordisk Canada Inc.
2680 Skymark Avenue
3rd Floor
Mississauga, Ontario
L4W 5L6

(905) 629-4222
1-800-465-4334 (All Canada)
Telefax. (905) 629-8662

Comments Recieved - Rebecca Yu

Rebecca Yu, B.Sc. Phm.
Manager, External Relations
Procter & Gamble Pharmaceuticals Canada, Inc.
Post Office Box 355, Station "A"
Toronto, Ontario
Canada M5W 1C5
(416) 730-4711 phone
www.pgpharma.com

Comments Recieved - John H. Stewart

John H. Stewart
Executive Vice President
and General Manager
Purdue Pharma
575 Granite Court
Pickering, Ontario
L1W 3W8

Tel 905 420 6400
Fax 905 420 4193

Comments Recieved - Guy Lallemand

Guy Lallemand
Vice President - Government & Stakeholder Relations
Pfizer Canada Inc.
P.O. Box 800 / C.P. 800
Pointe-Claire/Dorval, (Québec) H9R 4V2
Tel/Tél. (514) 695-0500
Fax.Téléc. (514) 426-6835

Comments Recieved - Russell Williams

Russell Williams
President
Rx&D, Canada's Research Based Pharmaceutical Companies
55 Metcalfe Street, Suite 1220
Ottawa, Ontario
K1P 6L5
TEL: 613-236-0455
FAX: 613-236-6756
www.canadapharma.org

Comments Recieved - Jerome Silvestre

Jerome Silvestre
sanofi-aventis Canada Inc.
2150 St-Elzéar Blvd. West,
Laval, Québec,
Canada
H7L 4A8
Tel.: (514) 331-9220
Fax: (514) 334-8016
www.sanofi-aventis.ca

Comments Recieved - J. Mark Lievonen

J. Mark Lievonen
President, sanofi pasteur
Connaught Campus
1755 Steeles Avenue West
Toronto, Ontario M2R 3T4
TEL: 416-667-2701
www.sanofipasteur.ca

Comments Recieved - Deborah Brown

Deborah Brown
Regional Vice President and General Manager
Serono Canada Inc.
2695 North Sheridan Way, Suite 200
Mississauga, ON L5K 2N6
Tel: 905-919-0200
Fax: 905-919-0299

Comments Recieved - Claude Perron

Claude Perron
Vice-President and General Manager
Vice-président et directeur général
Shire BioChem Inc.
2250, Boul. Alfred-Nobel, bureau 500
Ville Saint-Laurent (Québec) H4S 2C9 Canada
Tel/Tél. 514 787 2300
Fax/Téléc. 514 787 2427
www.shire.com

Comments Recieved - Sean P. Webster

25 August 2006

Ms Sylvie Dupont
Secretary of the Board
Patented Medicines Prices Review Board
Box L40, Standard Life Centre
333 Laurier Avenue West, 14th Floor
Ottawa, ON
K1P 1C1

Via E-Mail - sdupont@pmprb-cepmb.gc.ca

Dear Ms Dupont,

RE: Requested feedback on specific elements of the Guidelines used to determine whether the prices of patented medicines are excessive, including ideas on possible options for change.

Further to the Patented Medicines Prices Review Board (PMPRB) "Discussion Guide for the Consultations on the Board's Excessive Price Guidelines" document released in May of this year, I would like to comment on the issues raised in the discussion guide on behalf of Solvay Pharma Inc.

Issue 1 - Is the current approach to the categorization of new patented medicines appropriate?

We feel that the current approach to the categorization of new patented medicines that the PMPRB has adopted is unnecessary. The PMPRB should determine a single definition of "excessive pricing" and apply it to all new patented medicines undergoing review. This would give all competitive companies an equal and fair playing field and provide transparency on product pricing.

Question 1: Are the new patented drug categories and their definitions appropriate?

We do not feel the current patented drug categories and their definitions are well defined. Unfortunately the categories do not adequately recognize new, state of the art medicines that offer improvements in clinical benefit and thus many new drug therapies have gone unrecognized by the PMPRB.

Question 2: Is it important to distinguish a medicine that offers "moderate therapeutic improvement" from a medicine that provides "little or no therapeutic improvements?" If yes, why is it important? If not, why not?

There is no need for an additional category. The concept of "moderate therapeutic improvement" is highly contentious at best.

Issue 2 - Is the current approach used to review the introductory prices of new patented medicines appropriate?

We do not feel the approach used to review the introductory prices of new patented medicines is appropriate. The PMPRB should establish guidelines that define the term "excessive pricing" for use in the Canadian Market. The idea of "excessive pricing" should not be an average or a median but a defined term that shows that the price of a drug exceeds the threshold that has been identified as being excessive.

Question 1: Are the price tests currently used to review the prices of new medicines in the various categories appropriate for that category? Why? Why not? If not, how could these tests be amended to improve their appropriateness?

The current tests used to review prices of new medicines are not appropriate. The price tests need to acknowledge innovation, the changing economic value of currency, and changes in inflation. As well, it is vital that a clear definition of "excessive pricing" be determined and used to evaluate pricing of new patented medicines.

Question 2: If you think that medicines that offer "moderate therapeutic improvement" should be distinguished from medicines that provide "little or no therapeutic improvement" what would the appropriate new price test be?

The PMPRB's mandate is to ensure the prices of patented medicines are not excessive and not to evaluate the cost effectiveness of medicines that some might define as providing moderate, little or no therapeutic improvements. A clear definition of excessive pricing needs to be established and used to evaluate all new patented medicine.

Question 3: For price review purposes, "comparable medicines "are medicines that are clinically equivalent. Do you have any suggestions as to principles or criteria that should be used in determining how to identify "comparable medicines" for the purpose of inclusion in the above price tests?

Comparable medicines should include medicines with:

  • an approved indication that is the same as the primary indication
  • evidence that the medicine is used in clinical practice to treat the same indication
  • seen as an alternative to new medicines in clinical practice

We strongly feel that an agreed upon definition of comparable medicine should be determined and used for future reviews.

Question 4: Under the current Guidelines, Board Staff compares the Canadian average transaction price of the new medicine to the prices of the same medicine sold in the seven countries listed in the Regulations. However, Section 85(1) of the Patent Act stated that the Board should take into consideration "the prices of other comparable medicines in other countries". Should the guidelines address this factor" If so how could this factor be incorporated into the price tests for new medicines?

We are in support of the Board considering the prices of comparable medicines in other countries especially if the initial price review determines a higher price point, a price that exceeds the defined threshold of what has been deemed excessive. As noted in 2.1 above, the price of a patented medicine would only be considered excessive if it exceeds the price in all other countries and the CPI adjusted Canadian prices of all other drugs in the therapeutic class.

Issue 3 - Should the Board's Guidelines address the direction in the Patent Act to consider "any market"?

Question 1: Given the price variations by provinces/territories and class of customer illustrated in the previous figures, is it appropriate for the Board to only consider an ATP calculated based on the total revenues from the sales for all provinces/territories and all classes of customer? Why? Why not?

There is currently little price discrepancy among provinces. The majority of drugs are up to 5% below the established Maximum Non-Excessive price (MNE). This provides concrete evidence that there is no need to review the ATP for any and or all situations, as doing this would only further burden an already time sensitive price review process.

Question 2: If the current ATP calculation is not appropriate, should the Board review the prices to the different classes of customers and/or the different provinces and territories for all DINs? Or should this level of review be done on a case by case basis, where there is significant variation in the prices charged?

Only in exceptional circumstances should a "case by case" review be done. The system currently in use is adequate and our preference is for price reviews to be done at the Canada total aggregate level.

Thank you for providing us an opportunity to comment on the proposed guidelines. Should you have any questions or comments please do not hesitate to contact me.

Yours sincerely,

Sean P. Webster
Vice President, Corporate Affairs

Comments Recieved - Amout Ploos van Amstel

Amout Ploos van Amstel
President and Managing Director
Wyeth Pharmaceuticals
50 Minthorn Boulevard
Markham, Ontario L3T 7Y2
905 470 3600

Comments Recieved - Margaret Akan

August 28th, 2006
Discussion Guide
For the
Consultations
On the
Board's Excessive Price Guidelines

ISSUE 1

Consumers should be consulted when making decisions on the availability of patented medicines. Consumers need to be given a voice and this should be done in a manner that is appropriate to the population you are dealing with.

People living with HIV/AIDS today do not have a voice in the many health and social conditions they are struggling with. They do not have access to drugs or treatments that others have readily available to society in general. Many live in poverty and do not access the healthcare system.

When the approach the PMPRB uses to categorize new medicines does not include the voice of those who don't access the medicines there is definitely something missing.

I know as a First Nation person that I have to settle for "no-name" brand of medicines versus a well named one that cost more money. This differs from pharmacy to pharmacy.

I also know that the type of drugs available is dependent on how much money you have; an example of this type of situation is someone living with HIV/AIDS not being able to access a type of medicine because the "Canada plan" for them does not allow it. They live in poverty and have to use the system for coverage for medicines.

Some patented medicines should take into consideration that the diseases change all the time, especially with HIV/AIDS and that allowing individuals to have access to drugs today could save their lives tomorrow or at least make living more comfortable.

ISSUE 2

As a consumer first, First Nations person and then an activist for people living below the poverty line, I am not sure of the process of introducing new prices to medicines. As an Aboriginal person, it is more than just a pill that you take for healing; it is a holistic approach that needs to be addressed.

I think that the medicines should be made available to all at the same price and not available to the rich. Consumers are consumers and they need to be consistent throughout this process.

This whole process as I read it is complex to the point of being not understandable.

ISSUE 3

Again as a consumer, I feel that the prices should be lower and the same across any market. Why should the rich be healthy and the poor be unhealthy?

I am not sure what this means but I definitely know that the board needs to address the different classes of customers and or the different provinces/territories.

Sincerely
Margaret Akan
Executive Director
All Nations Hope AIDS Network
1-877-210-7622

Comments Recieved - Anne Dooley

Anne Dooley
President
Canadian Arthritis Patient Alliance (CAPA)
Direct line: 306-374-6682
annemd@shaw.ca

Comments Recieved - Louise Binder

Louise Binder
louise.binder@sympatico.ca

Comments Recieved - British Columbia

British Columbia

Comments Recieved - Monique Collette

Monique Collette
Atlantic Canada Opportunities Agency
Agence de promotion économique du Canada atlantique
Head Office
P.O. Box 6051
Moncton, N.B.
Canada
E1C 9J8
(506) 851-2271

Comments Recieved - Dr. Katharina Kovacs Burns

RESPONSES TO DISCUSSION GUIDE QUESTIONS ON THE
PMPRB'S EXCESSIVE PRICE GUIDELINES

SUBMITTED BY
Dr. Katharina Kovacs Burns, MSc, MHSA, PhD
1581 Hector Rd.
Edmonton, Alberta T6R 2Z4
Email: kathykovacsburns@shaw.ca (home)

ISSUE 1: IS THE CURRENT APPROACH TO THE CATEGORIZATIION OF NEW PATENTED MEDICINES APPROPRIATE?

QUESTION 1: Are the new patented drug categories and their definitions appropriate?

Under optimal conditions and circumstances it must be very difficult to categorize new patented drug products for setting introductory prices. This raises many concerns, not so much in terms of what prices are established for these drugs by their category, but rather the safety and therapeutic value aspects as well as if the benefits outweigh the costs or at least make the drug worthwhile. However, the real issue is that new drugs have not yet been proven in the 'real world' effectiveness or therapeutic value, so the categorization is based on what information is obtained during the initial clinical trials and other reviews. The challenge is what appears to be a drug that initially could be classified as a category 2 or breakthrough drug might end up a year or so later causing adverse events or side effects that render it an unsafe or harmful drug. Very few patients really understand how drugs are categorized and priced, although they certainly are concerned if the drug is working or not working very well for treating their condition, and of course the price of drugs is always an issue if patients have to pay out of pocket or if they are not able to get access to the drug because of the cost/price.

It would seem that all new drugs should be placed on 'probation' when they are categorized, and monitored annually as to their effectiveness, efficacy and cost/benefit, to ensure the categorization is accurate. The real world analysis is probably the only way to assess the category a drug really belongs in.

QUESTION 2: Is it important to distinguish a medicine that offers 'moderate therapeutic improvement' from a medicine that provides 'little or no therapeutic improvement'? If yes, why is it important? If not, why not?

It is very important to patients particularly to have medicines that offer moderate therapeutic improvement distinguished from those that provide little or no therapeutic improvement. First of all, why would physicians prescribe or recommend drugs with very little therapeutic value or improvement for the patient? Why would these drugs even remain on the market? If a drug shows moderate therapeutic improvement, there is at least some improvement in the health of the patient compared to what the patient had been taking or doing prior to the drug.

QUESTION 3: If the answer to question 3 above is yes, on what basis would a new medicine that offers "moderate therapeutic improvement" be distinguished from a new medicine that provides "little or no therapeutic improvement"?

To distinguish new drugs as having moderate or very little to no therapeutic value or effect means that comparisons of drugs are being done and analyzed. The issue here seems to be more about those aspects or criteria that distinguish moderate from little or no therapeutic improvement. Again, as mentioned earlier, without the 'real world' application and monitoring of such drugs it will be very difficult to say from the preliminary clinical trials and information whether a drug demonstrates moderate or little to no therapeutic improvement over other drugs in use. The only other way would be to continue with more advanced clinical trials comparing drugs as to their therapeutic effectiveness. The usual placebo clinical trial will not show this comparison.

ISSUE 2: IS THE CURRENT APPROACH USED TO REVIEW THE INTRODUCTORY PRICES OF NEW PATENTED MEDICINES APPROPRIATE?

QUESTION 1: Are the price tests currently used to review the prices of new medicines in the various categories appropriate for that category? Why? Why not?
If not, how could these tests be amended to improve their appropriateness?

The price tests appear to be appropriate for reviewing the prices of new drugs/medicines in the first two categories. However, for category 3 drugs there is concern if drugs with very little or no therapeutic value are priced in the same way as those with moderate therapeutic value. Should there not be some way to distinguish the price between moderate therapeutic effective category 3 drugs from those with little or no therapeutic value? Why are these drugs in category 3 priced to the highest international price rather than the lowest price or the median international price for comparison? This latter change makes more sense overall for category 3 drugs. In fact, it makes more sense to use the median international price for those category 2 drugs with moderate therapeutic value, and the lowest price for those drugs with little or no therapeutic value.

QUESTION 2: If you think that medicines that offer "moderate therapeutic improvement" should be distinguished from medicines that provide "little or not therapeutic improvement" what would the appropriate new price test be?

As mentioned in Question 1, it makes more sense to use the median international price as the price test for medicines that offer moderate therapeutic improvement. In fact, this median should be considered the maximum by which to set the price of the category 2 drug that provides moderate therapeutic improvement. The new price test for medicines that provide "little or no therapeutic improvement" should be the lowest international price. This should also be the maximum by which these drugs are priced in Canada.

QUESTION 3: For price review purposes, "comparable medicines" are medicines that are clinically equivalent. Do you have any suggestions as to principles or criteria that should be used in determining how to identify "comparable medicines" for the purpose of inclusion in the above price tests?

As mentioned previously, the challenge is having the right or appropriate information to be able to determine if new drugs which are assessed in placebo clinical trials, can be compared with other drugs that are clinically equivalent. It still requires that the drugs are applied and monitored in 'real world' or life situations with patients who have taken comparable drugs to the new drug. Otherwise, there will need to be clinical trials in which drugs are compared and determined to be 'comparable medicines' or clinically equivalent. And these types of clinical trials also take a lot of time and resources to coordinate and conduct over an appropriate period of time to determine comparability. The issue for patients and others is the price of a supposedly comparable medicine, which after several years of practical application in the 'real world' turns out to provide little or no therapeutic improvement or value. Consideration for placing all new comparable or other drugs on probation with lower prices until such time as it can be indisputably determined what the fair price for the drug should be on the market.

QUESTION 4: Under the current Guidelines, Board Staff compares the Canadian average transaction price of the new medicine to the prices of the same medicine sold in the seven countries listed in the Regulations. However, Section 85(1) of the Patent Act states that the Board should take into consideration "the prices of other comparable medicines in other countries". Should the Guidelines address this factor?
If so, how could this factor be incorporated into the price tests for new medicines?

Yes the guidelines should address this factor and consider it for each of the price tests for new medicines. The average transaction price of new drugs in Canada must consider this factor along with other aspects. The end result or goal should be that the price tests and comparisons of prices in Canada with the other seven countries should be considered in the context of ensuring that Canadian prices are appropriately determined and set for Canadians. Canada does not have the same market or drug volume need/use that other many of the other countries listed have, which in essence places Canada in a disadvantage to compete in drug development, research and benchmarking for safety, effectiveness, cost/benefits, etc. The Board must ensure that Canadian prices stay in the same relative pricing range and not higher because Canada has a smaller market and less drug research and development.

ISSUE 3: SHOULD THE BOARD'S GUIDELINES ADDRESS THE DIRECTION IN THE PATENT ACT TO CONSIDER "ANY MARKET"?

QUESTION 1: Given the price variations by provinces/territories and classes of customer illustrated in the previous figures, is it appropriate for the Board to only consider an ATP calculated based on the total revenues from the sales for all provinces/territories and all classes of customer? Why? Why not?

It is not appropriate for the Board to only consider an ATP calculated based on the total revenues from sales for all provinces/territories and all classes of customer because this creates an inequity amongst provinces/territories and various classes of customer. There is value in assessing how to make the prices equitable across provinces/territories and all classes of customer to ensure that the average Canadian has access and can afford the drugs needed, whether in hospital or in community. Therefore, hospitals and pharmacies, as customers, should be given the same concessions to ensure equitable access by those who need the drugs no matter where they live in Canada (i.e. regardless of province or territory). Bulk purchase multi-year contracts should be made not only with hospitals but pharmacies and other groups as well, and through national programs rather than each provincial or territorial program. It would appear that if ATP calculated on total revenues from national sales would provide a more balanced and equitable approach for Canadians in all provinces/territories, regardless of class of customer.

QUESTION 2: if the current ATP calculation is not appropriate, should the Board review the prices to the different classes of customers and/or the different provinces and territories for all DINs? Or should this level of review be done on a case-by-case basis, where there is a significant variation in the prices charged?

The Board level of review should be done with a national focus for each DIN, and a focus on affordability by the average or below average Canadian across Canada. Prices do need to take into consideration the different customers and the provinces/territories but with the goal of achieving national equity of prices across them as opposed to creating different price structures for each province/territory or customer. The guideline should reflect a national approach to the pricing review of drugs with consideration of special circumstances as they arise for provinces/territories and customers. Example might be expensive breakthrough drugs for rare disorders.

Comments Recieved - Theresa Marie Underhill

Theresa Marie Underhill, M.Ed., MHSA
Chief Operating Office
Cancer Care Nova Scotia
1278 Tower Road, 5th floor Bethune Building
Halifax, Nova Scotia, Canada B3H 2Y9
Toll free: 1-866-599-2267
www.cancercare.ns.ca

Comments Recieved - Canadian Expert Drug Advisory Committee

Mike Tierney
Canadaian Agency for Drugs and Technologies in Health
Senior Director, Common Drug Review
600-865 Carling Avenue
Ottawa, On
K15 5S8
613-226-2553

Comments Recieved - Fred Holmes

Fred Holmes
Senior Director
Emergis Centre of Excellence

Comments Recieved - Ellen Aquilina

Ellen Aquilina
ESI Canada

Comments Recieved - Federal Health Partnership

Federal Health Partnership

Comments Recieved - David Garner

David Garner
President and CEO
Green Shield Canada
1 800 268 6613
www.greenshield.ca

Comments Recieved - Members of HDAP

Jean Gray, CM, MD, FRCPC
James McCormack, Pharm D
Mitchell Levine, MD, MSc, FRCPC
Members of Human Drug Advisory Panel (HDAP)

Comments Recieved - Lexchin, Dr. Joel - July 5, 2006

Consultations on the Board's Excessive Price Guidelines

Joel Lexchin MSc, MD, CCFP(EM), FCFP
121 Walmer Rd.
Toronto, Ontario, CANADA M5R 2X8
Tel: (416) 964-7186
Fax: (416) 923-9515
e mail: joel.lexchin@utoronto.ca

July 6, 2006

Thank you for the opportunity to take part in the PMPRB consultation process. Below please find my responses to the questions posed in the Discussion Guide.

ISSUE 1: IS THE CURRENT APPROACH TO THE CATEGORIZATION OF NEW PATENTED MEDICINES APPROPRIATE?

Question 1:

The PMPRB is at a relative disadvantage in trying to classify the therapeutic benefit of new drugs in that it is trying to evaluate them very early in their lifecycle, before there is full knowledge of either their benefits or their risks. This is especially true given that there is often little published information about new drugs when they first appear on the market (Lexchin 2002) and that safety information is significantly under-reported (Ioannidis and Lau 2001). Therefore, trying to draw relatively fine distinctions between the therapeutic value of new drugs is difficult and should not be undertaken.

Question 2:

First, as noted above, there is relatively little information available to make these types of distinctions at the time when the PMPRB initially evaluates the drug. Presumably making these distinctions would be for the purpose of awarding different maximum introductory prices to drugs that offer "moderate" advantages as compared to those that offer "little or no therapeutic improvement". There might be some merit in having different prices, in the sense that it could help to encourage companies to develop more of the former type of medications. However, this raises the question of whether the same pricing criteria should apply to the latter type of drugs. If drugs offer little or no new benefit compared to existing products then I do not see any justification for allowing them to be priced up to the maximum in their therapeutic class. In summary, if drugs offering moderate advantages are allowed to have higher prices, drugs that offer little or no therapeutic benefit should have their prices lowered.

Questions 3:

Distinguishing drugs with moderate therapeutic improvement would obviously be a clinical decision and would have to be based on a systematic review of the literature involving three aspects: safety, effectiveness and cost-effectiveness. Products would need to show an improvement in at least one of these areas while being at least equal to existing medications in the other two. In order to make this assessment there would have to be head-to-head trials carried out against the drug that is currently thought to be the most effective for the treatment of the particular disease in question. Placebo controlled trials are not enough to base a decision on. Furthermore, companies should have to disclose all unpublished trials so that there is no danger of wrongly assessing a drug because all information is not available.

ISSUE 2: IS THE CURRENT APPROACH USED TO REVIEW THE INTRODUCTORY PRICES OF NEW PATENTED MEDICINES APPROPRIATE?

Question 1

The current price test for Category 3 drugs is not appropriate. When generic equivalents come onto the market brand-name companies do not lower the prices on their products (Lexchin 2004). Therefore, there can be a very wide range of prices in the therapeutic class but the price of new brand-name drugs is not affected by the much lower generic prices. Furthermore, when new drugs that do not offer any improvements over existing products in the same 4th level ATC grouping enter the market these products are almost always within 10% of the price of the most expensive drug in the group (Lexchin 2006). It seems clear that brand-name manufacturers are not willing to engage in price competition even when their products are no better than existing ones. The maximum price for Category 3 drugs should be the median of the therapeutic class including the price of generics.

Question 2

As I indicated I, do not support trying to separate drugs offering "moderate therapeutic improvement" from those offering "little or no therapeutic improvement". Should the PMRPB chose to take this step then I would suggest that the former group be allowed to price to the maximum of the therapeutic group as at present but that the latter group be at the minimum of the therapeutic group.

Question 3

Decisions about what are comparable medicines in terms of clinical equivalence can only be made through the use of head-to-head randomized clinical trials. Other types of evidence, e.g., two different drugs that have been compared to placebo in separate trials, are much weaker and cannot provide definitive data. Having said that, when drugs are in the same 4th level ATC category, e.g., the proton pump inhibitors, it may be reasonable to decide that they are clinically equivalent. However, even in this instance there are arguments that clinical equivalence should not be assumed in the absence of solid scientific evidence (Furberg, Herrington, and Psaty 1999).

Question 4

The original group of seven countries was chosen because the countries had the level of research activity that Canada was hoping to stimulate through changes to the Patent Act. However, as can be seen from PMPRB publications, except for Italy Canadian R&D lags significantly behind that of the other countries. Therefore, the PMPRB should use pricing data from other countries that have similar R&D activity to that existing in Canada. These countries could include Australia, Belgium, Finland, Norway, Spain and The Netherlands (Patented Medicine Prices Review Board 2002).

ISSUE 3: SHOULD THE BOARD'S GUIDELINES ADDRESS THE DIRECTION IN THE PATENT ACT TO CONSIDER "ANY MARKET"?

Questions 1 & 2

The PMPRB should be guided in this area by a broad interpretation of its mandate, which is to ensure that patented drugs are affordable to Canadians. Affordability can be looked at from either a collective or an individual viewpoint. A collective basis would be whether a province or a hospital has the resources to pay for the drug while an individual basis is whether drugs are priced out of reach of a significant number of individual patients. There are obviously differences in the resources available to collectives (hospitals, provinces) but in general they tend to have greater resources and greater bargaining power than individual patients. Therefore I would suggest that the Board have guidelines for different classes of purchasers. I would not interfere with the prices that hospitals negotiate, especially since according to the figures in the Board's Discussion Guide hospital prices tend to be either at or below the MNE. However, since individuals purchase their drugs from pharmacies I believe that the Board needs to establish guidelines for prices to pharmacies. Here I would suggest that prices to pharmacies should be within 2 standard deviations of the MNE. Establishing this range for prices will help to ensure that individual patients in different parts of the country pay roughly similar amounts for their drugs.

References

  1. Furberg, Curt D., David M. Herrington, and Bruce M. Psaty. 1999. Are drugs within a class interchangeable? Lancet 354:1202-1204.
  2. Ioannidis, John P. A., and Joseph Lau. 2001. Completeness of safety reporting in randomized trials: an evaluation of 7 medical areas. JAMA 285:437-443.
  3. Lexchin, Joel. 2002. New drugs with novel therapeutic characteristics: have they been subject to randomized controlled trials? Canadian Family Physician 48:1487-1492.
  4. ---. 2004. The effect of generic competition on the price of brand-name drugs. Health Policy 68:47-54.
  5. ---. 2006. Do manufacturers of brand-name drugs engage in price competition? An analysis of introductory prices. CMAJ 174:1120-1121.
  6. Patented Medicine Prices Review Board. 2002. A comparison of pharmaceutical research and development spending in Canada and selected countries (2002). Ottawa: PMPRB.

Comments Recieved - Steve Morgan

Consultations on the Board's Excessive Price Guidelines

Steve Morgan, PhD
Assistant Professor, Health Care and Epidemiology; and Research Lead, Program in Pharmaceutical Policy Centre for Health Services and Policy Research University of British Columbia
429 - 2194 Health Sciences Mall
Vancouver, BC V6T 1Z3
Phone: 604-822-7012
Fax: 604-822-5690
Email: morgan@chspr.ubc.ca
www.chspr.ubc.ca

Issue 1, Question 1:
For the purpose of balancing regulatory objectives (rewarding innovation while controlling prices) with regulatory pragmatism, I believe that the reasonably parsimonious structure for the drug classifications of the PMPRB is appropriate.

Issue 1, Question 2:
Although I believe that the best possible mechanism to reward innovation while managing drug expenditures is to pay for products in proportion to relative value in terms of proven health outcomes, I do not believe that the PMPRB's excessive price guidelines should distinguish between moderate improvements and little or no improvements.

There are two reasons for this. The first, relatively simple, reason relates to the problems raised in issue 2 of this consultation process. The prices of many products currently treated as category 3 medicines are higher, relative to international benchmarks, than the prices that would be allowable for category 2 products (breakthroughs). It would appear that the MNE price limits for all categories of medicine should have a consistently applied international limit (as per the category 2 drugs) and then products in category 1 and 3 should have additional potential restrictions.
Consistent with the PMPRB's regulator tradition, restrictions should be kept clear, transparent, and relatively simple to operationalize.

Adding additional considerations for moderate but not substantial therapeutic improvements would complicate regulatory policy without necessarily protecting public interests. This is the second reason that I would recommend against a new categorization. The economic theory of innovation and competition in markets where patents are granted suggests that it is most efficient for products to compete on both price and quality dimensions. Products offering modest performance benefits over competitors would generally expect to earn market share at prices that are approximately equal to competitors because, if performance benefits materialize, their price per performance would be superior. Having a regulatory system that required such competition in price per performance for pharmaceutical products would, in my view, be efficiency enhancing. It would also place greater proportionate rewards in areas where substantial improvements are made. Of course the problems identified in issue 2 of this consultation process do raise concerns about whether we have these incentives lined up correctly at present. The remedy, however, is not to make a new category for price considerations but to better establish MNE prices among category 1 and
3 drugs.

Issue 1, Question 3:
Not applicable. I believe we should avoid the creation of a new category.

Issue 2, Question 1:
In my view, the price tests for the categories need to be modified slightly.
In particular, I believe that an IPC method of limiting NME prices for category 1 and 3 drugs needs to be based on the same IPC methods used for category 2 drugs. The median IPC price for any given patented product in Canada should be the price ceiling, regardless of classification. For category 1 and 3 drugs, addition price comparisons may be added, with the MNE price being the lesser of the IPC median or the RR price or TCC price.
This combination of price comparisons would encourage competition in price per performance for pharmaceutical products, which will contribute to efficiency in this sector while providing maximum rewards to products that offer substantial improvements over existing alternatives (thus contributing to long-term or dynamic efficiency in research and development activities).

Issue 2, Question 2:
As per answers to Issue 1 questions, I believe we should avoid the creation of a new category.

Issue 2, Question 3:
I would suggest that consideration be given to refining the comparator groups. The chemical sub-class established by the 4th level of the WHO ATC system not defined with equal detail across such classes. Some are highly specific; others are quite broad. It would be useful to revise some of the categories as necessary based on consultations with an expert committee.
While this adds to regulatory complexity, it seems reasonable that we use definitions of product sub-classes that are approximately as "broad" for all such classes.

Issue 2, Question 4:
It may be time for Canada to revise its list of comparator countries. In particular, consideration should be given to adding countries such as New Zealand and Australia. These countries have comparable health systems and economies; moreover, they have been leaders in the application of pharmacoeconomic considerations to drug coverage and price negotiations. As a result, benchmarking against these countries will imbue the international comparisons with further "rational" comparators.

Issue 3, Question 1:
Yes, I believe that some stratification of regions should be done. While the data presented in this discussion document do not indicate a clear directional bias in terms of cross-provincial prices, it seems reasonable to ensure that no one province be left paying a price that would exceed the national MNE price. Thus, there should be a test to determine whether prices exceed the national MNE price in any region. This should not impose too great a regulatory burden.

Issue 3, Question 2:
Yes, given the unique institutional circumstances of hospitals, I would recommend the possibility of defining MNE price for such institutions separately from MNE process for other purchasers. This could help to avoid situations where an implicit cross-subsidy is occurring from ambulatory to institutional payers.

Comments Recieved - W. Neil Palmer

Consultations on the Board's Excessive Price Guidelines

Palmer D'Angelo Consulting Inc.
220 Laurier Avenue West, Suite 350
Ottawa   Ontario   Canada  K1P 5Z9

August 25, 2006

Ms. Sylvie Dupont,
Secretary, PMPRB
Box L40, Standard Life Centre
333 Laurier Avenue West, Suite 1400
Ottawa, Ontario   K1P 1C1

Dear Ms. Dupont,

I am pleased to provide the following responses to the questions posed by the discussion guide.

Issue 1:  Is the current approach to the categorization of new patented medicines appropriate?

Question 1:  Are the new patented drug categories and their definitions appropriate?

The PMPRB's new medicine categories do not recognize incremental innovation.  This is an issue for pricing for individual products as well as for quantifying pharmaceutical innovation in the aggregate.  Although the categories may not be intended as anything more than a mechanism to facilitate the PMPRB's price review process, the categories are frequently misused as a measure of pharmaceutical innovation. Moreover, the Board's system of categories lends credence to the popular but uninformed notion that innovation is somehow binary: i.e., drugs are either "breakthroughs" or they offer no improvement ("me-too's"). (See for example Morgan S. et al, 2005)1.

In addition there is considerable disagreement between the PMPRB's system of categorization and other systems (e.g., the ASMR in France)2.  These differences highlight the concern that assessing therapeutic improvement is highly subjective and can be particularly challenging when those making the recommendations are not specialists in treating the relevant diseases.

Question 2:  Is it important to distinguish a medicine that offers "moderate therapeutic improvement" from a medicine that provides "little or no therapeutic improvement?" If yes, why is it important? If not, why not?

It is important that the PMPRB guidelines recognize all therapeutic advances including minor improvements. The iterative accumulation of several small improvements can result in a significant improvement in therapy that is never captured in the PMPRB's system of categories.  Moreover, it is important to consider improvements in technology (not just clinical outcomes) such as advances that improve patient compliance with therapy, the benefits of which often cannot be measured in randomized clinical trials.

Question 3:  If the answer to question 2 is yes, on what basis would a new medicine that offers "moderate therapeutic improvement" be distinguished from a new medicine that provides "little or no therapeutic improvement"?

Any product that addresses an unmet medical or patient need should be considered (at a minimum) to be a moderate improvement.  Obvious examples are cancer or HIV drugs that offer treatment options when existing therapies fail or are not appropriate.  Important technological advances should also be considered moderate improvements - for example innovative new dosage forms that improve drug delivery or patient compliance.

Issue 2:   Is the current approach used to review the introductory prices of new patented medicines appropriate?

Question 1: Are the price tests currently used to review the prices of new medicines in the various categories appropriate for that category? Why? Why not? If not, how could these tests be amended to improve their appropriateness?

The preamble to the Board's guidelines indicate that the guidelines are not a rigid set of decision making rules when in fact they are applied rigidly by Board Staff.  This unbending approach results in situations whereby products that are the lowest priced in a therapeutic class, or have a Canadian price that is the lowest in the world, are somehow considered to be "excessive" and become the subject of protracted investigations and lengthy and expensive hearings.  There are even cases where it is alleged that a drug is excessively priced even though a higher price for the identical product from a different manufacturer is considered to be not excessive. 

Board Staff should be empowered to negotiate prices with patentees that use the Guidelines as a starting point and not as a definitive price setting mechanism.  Negotiated prices would have to take into account the price review factors in section 85 of the Patent Act and would be approved by the Board in cases where circumstances warranted a significant departure from the Guidelines.  Price negotiations with government officials are an important component of pricing and reimbursement systems in some European countries.
 
The Board should focus and prioritize its compliance and enforcement activities toward those products for which there is the potential for the most harm to consumers (patients) and/or taxpayers (publicly funded drug plans) from excessive pricing. This raises the question of how the Board on the one hand can argue that a particular new drug is the same or "clinically equivalent" to others on the market (i.e., patients and physicians have a choice among several equal alternatives) and on the other assert that there is a patent monopoly that requires aggressive price regulation.  If in fact the new drug is no different from the others, competitive forces should prevail and price regulation is not required (or at best it should be a low priority).  The PMPRB should focus its efforts on those products for which there is a true monopoly and there is real potential for excessive pricing.

Question 2: If you think that medicines that offer "moderate therapeutic improvement" should be distinguished from medicines that provide "little or no therapeutic improvement" what would the appropriate new price test be?

The PMPRB guidelines should not be a barrier to innovation and improvement.  Any drug that offers improvement should be entitled to a price premium over inferior drugs.  To the extent that a premium is not valued by consumers or payers, it likely will not be purchased or reimbursed and the patentee will be forced to adjust its prices or lose market share (i.e. competitive market forces will prevail).

Question 3: For price review purposes, "comparable medicines" are medicines that are clinically equivalent. Do you have any suggestions as to principles or criteria that should be used in determining how to identify "comparable medicines" for the purpose of inclusion in the above price tests?

The PMPRB should abandon the phrase "clinically equivalent" and focus on a definition of comparable medicines that references other therapeutic agents with the same or comparable indications or clinical use as the new medicine.

Question 4: Under the current Guidelines, Board Staff compares the Canadian average transaction price of the new medicine to the prices of the same medicine sold in the seven countries listed in the Regulations. However, Section 85(1) of the Patent Act states that the Board should take into consideration "the prices of other comparable medicines in other countries". Should the Guidelines address this factor?  If so, how could this factor be incorporated into the price tests for new medicines?

In cases where a price premium exists for a new medicine relative to its comparators in the PMPRB reference countries, a premium should also be permitted for the Canadian price.

Issue 3:  Should the Board's Guidelines address the direction in the Patent Act to consider "any market"?

Question 1:  Given the price variations by provinces/territories and class of customer illustrated in the previous figures, is it appropriate for the Board to only consider an ATP calculated based on the total revenues from the sales for all provinces/territories and all classes of customer? Why? Why not?

Question 2:  If the current ATP calculation is not appropriate, should the Board review the prices to the different classes of customers and/or the different provinces and territories for all DINs?  Or should this level of review be done on a case-by-base basis, where there is a significant variation in the prices charged?

The PMPRB's price review focus should remain on the average transaction prices for the Canadian market as a whole.  As it does now, the PMPRB should only consider prices in submarkets when there is particular issue that warrants investigation.

We welcome the opportunity to provide our comments and ideas and look forward to the face-to-face meetings in November.

Yours truly

W. Neil Palmer
Principal Consultant
Palmer D'Angelo Consulting Inc.

1 Morgan S., et al, "Breakthrough drugs and growth in expenditure on prescription drugs in Canada", BMJ  2005;331:815-816 (8 October)

2 Palmer WN, Dawe MV, Assessing therapeutic improvement in Canada and France: A comparison of PMPRB and ASMR classifications. ISPOR Abstract (accepted for presentation October 29, 2006).

Comments Recieved - Pauline Ruel

Pauline Ruel
pauline.ruel@ssq.ca

Comments Recieved - John M. Maxted

John M. Maxted, MD MBA CCFP FCFP
Associate Executive Director, Health & Public Policy
The College of Family Physicians of Canada

Comments Recieved - Ms. Anne Tomalin

Consultations on the Board's Excessive Price Guidelines

Patented Medicine Prices Review Board

Consultations on the Board's Excessive Price Guidelines

Responses to Questions

August 24, 2006

A. Issue 1

Is the current approach to the categorization of new patented medicines appropriate?

1. Are the new patented drug categories and their definitions appropriate?

I do not believe that the current new patent drug categories and their related definitions are appropriate. Specifically, for the current Category 3 drug products, putting drugs that have moderate therapeutic advantage in the same category as drugs that have no therapeutic advantage is detrimental to the health care of Canadians and is detrimental to the pharmaceutical industry.

In terms of the health care of Canadians, this definition hinders the availability of needed drugs in Canada. I have specifically been involved with two drugs for which the company made a decision not to market the drug in Canada because an introductory price that was reasonable could not be attained. Both drugs were in therapeutic categories (different categories) where there had been little innovation for many years. The drug product that the company was proposing to market provided a "moderate" therapeutic benefit over existing products. As such, the introductory price was limited to the maximum of the price in the therapeutic category. The therapeutic category in both cases was essentially a commodity category, with prices in the range of $0.30 or less a day for the medication. In today's world $0.30 does not buy a chocolate bar or a package of gum. There is very little that anyone can buy today for $0.30. Yet, we propose that medications of value to Canadians should be available for this price, even when they provide a moderate improvement over existing therapy. For me, this is totally inappropriate. Provided below are some further details on the nature of the "moderate" improvement in the products mentioned.

  • The first product involved a hypnotic (a sleeping pill) that was a non-benzodiazepine hypnotic. Concern has been raised regarding benzodiazepine hypnotics in terms of whether they may be marginally physically addicting or perhaps psychologically addicting. Availability of non-benzodiazepine hypnotics provided a "moderate" (some might argue "breakthrough") improvement in the hypnotic arena. However, because "moderate" improvements were not recognized for pricing purposes as different from "no improvement", pricing was restricted to the prices of very old, highly genericized hypnotic agents available on the market in Canada. In this instance, the company chose to not market in Canada.
  • The second product involved a product used to cleanse the colon prior to colonoscopy. Currently products that are used to do this job in Canada are liquid. These liquids have a very salty taste and the liquid itself is somewhat viscous. Patients have to ingest large amounts of the liquid at half hour intervals the night before colonoscopy. By the fourth or fifth or sixth ingestion, many patients are gagging and having significant difficulty swallowing the liquid. A company was able to develop a tablet of a formulation that would work. Clinical studies showed that patients far preferred the tablet and were able to handle taking this dosage form much better than the solution, even though many tablets had to be swallowed. Colon cancer and the need for more widespread use of colonoscopies were being highlighted as a concern for Canada at the time. The new product, however, was only a "moderate" improvement over the existing product. As such, its pricing was restricted to the price of the nonprescription liquid product that had been used for many, many years. The company chose not to market the product in Canada.

In terms of the pharmaceutical industry, many steps forward in medicine are done in multiple little steps. What the lay press understands, using PMPRB definitions, is that the pharmaceutical industry hardly ever innovates, but just brings drugs on the market that they want to charge higher prices for, but that have no value. This is a very over-simplified interpretation of research in the pharmaceutical sector. It significantly undermines the valuable research done by many researchers in this country and in other countries to bring better medicines to market. Breaking Category 3 into drugs that have "moderate" improvement and drugs that have "no" improvement would still provide a sector for the "me-too" drugs. But having a sector for "moderate" improvement would provide recognition to the nature of valuable research and development in this sector.

2. Is it important to distinguish a medicine that offers "moderate therapeutic improvement" from a medicine that provides "little or no therapeutic improvement?" If yes, why is it important? If not, why not?

See response to Question 1.

3. If the answer to question 2 above is yes, on what basis would a new medicine that offers "moderate therapeutic improvement" be distinguished from a new medicine that provides "little or no therapeutic improvement"?

I believe that a medicine that provides "moderate therapeutic improvement" could be distinguished from a medicine that provides "little or no therapeutic improvement" on the basis of the following:

  1. Efficacy - Clinical trials demonstrate statistically and clinically significant improvement of the "improved" product over the "existing" product.
  2. Safety - Clinical trials demonstrate statistically and clinically significant improvement of the "improved" product over the "existing" product.
  3. Compliance - Clinical trials demonstrate statistically improved compliance that is linked to clinical improvement of the management of the disease by a panel of "experts" (could be government based). The reason that I would not ask that clinical studies demonstrate the clinical improvement is that the management of the disease (state of the art) might dictate preference for one product over another, but the rationale behind it might be difficult to prove without clinical trials of 25,000 individuals (e.g., development of resistance and use of particular antimicrobial agents).

B. Issue 2

Is the current approach used to review the introductory prices of new patented medicines appropriate?

1. Are the price tests currently used to review the prices of new medicines in the various categories appropriate for that category? Why? Why not?

If not, how could these tests be amended to improve their appropriateness.

I believe that the price tests currently used to review the prices of new medicines in the various categories are appropriate for that category, with the following exceptions:

  • The need for a new category is added that allows "moderate" improvement drugs to be priced like Category 2 drugs.
  • It should be clarified in "black and white" that prices charged for Special Access or Investigational drugs will NOT be included in the assessment of baseline pricing. Currently, I understand that these prices are usually not included, but that PMPRB has the discretion to include them. This is a total distraction for companies and difficult for companies with Orphan drugs or drugs requiring some payment to work their way through. PMPRB should not be the vehicle to discourage marketing through SAP or Investigational mechanisms. This should be done by HPFB.

I support the option for Category 2 drugs to have a choice of using the Therapeutic Class Comparison test or the International Price Comparison test.

Currently companies with breakthrough drugs (or drugs they believe may be breakthrough) do not go through the process of having them declared "breakthrough" if they can get the price they want as a Category 3 drug. Therefore, the analysis presented for Category 3 drugs, includes some drugs that likely could have been Category 2. Therefore any analysis of Category 3 is really a mixed analysis of Category 3 and potential Category 2 drugs. It is unfair to penalize Category 3 drugs in terms of forcing them to market below what is already accepted in Canada as the acceptable price for the Therapeutic Class Comparison.

It is inappropriate for PMPRB to try to control all pricing in Canada. Market forces will control prices through formulary acceptance, perceived value from the Common Drug Review, and the market itself. I do not support the need for tighter or deeper price controls from PMPRB, with the exception of the need for a new category of drugs to be defined and greater flexibility in their introductory price.

2. If you think that medicines that offer "moderate therapeutic improvement" should be distinguished from medicines that provide "little or no therapeutic improvement", what would the appropriate new price test be?

I would use the same pricing tests for "moderate therapeutic improvement" as are used for "breakthrough or significant therapeutic improvement".

3. For price review purposes, "comparable medicines" are medicines that are clinically equivalent.

Do you have any suggestions as to principles or criteria that should be used in determining how to identify "comparable medicines" for the purpose of inclusion in the above price tests?

Provided that the indication of the product is the same as the indication of the comparative product, I believe the current way of approaching things is appropriate. Methotrexate when used for arthritis should be compared to an arthritis set of drugs. Methotrexate when used for cancer should be compared to cancer drugs.

4. Under the current Guidelines, Board Staff compares the Canadian average transaction price of the new medicine to the prices of the same medicine sold in the seven countries listed in the Regulations. However, Section 85(1) of the Patent Act states that the Board should take into consideration "the prices of other comparable medicines in other countries". Should the Guidelines address this factor?

If so, how could this factor be incorporated into the price tests for new medicines?

I believe that this would be too complex to do, and that deeper pricing rules from PMPRB are not needed. International prices of medicines are controlled in the international markets by the market forces in those countries. The comparison is therefore already built into the International price of the product in question.

International prices are already difficult enough to deal with. We all know that the US listed price is hardly ever the real price. PMPRB is comparing a transaction price in Canada to prices that are not necessarily transaction prices in other countries. Trying to convolute this further would not be appropriate.

Issue 3

Should the Board's Guidelines address the direction in the Patent Act to consider "any market"?

1. Given the price variations by provinces/territories and classes of customer illustrated in the previous figures, is it appropriate for the Board to only consider an ATP calculated based on the total revenues from the sales for all provinces/territories and all classes of customers? Why? Why not?

Yes, it is appropriate for PMPRG to consider an ATP calculated based on the total revenues. If some markets are being charged prices over ATP, other markets are being charged prices under ATP. It averages out. Provinces can control, to some extent, whether they are charged prices higher than other provinces. Certainly Quebec requires that companies sign a declaration to the effect that they will not sell to the Quebec government at a price higher than other governments.

PMPRB should not be involved in price control so deeply that it controls the price of medicines to different segments of the market. Other market forces or routes of price control should be used to deal with market segments that are charged higher prices. As long as the ATP works out, then I as a Canadian am happy.

2. If the current ATP calculation is not appropriate, should the Board review the prices to the different classes of customers and/or the different provinces and territories for all DINs? Or should this level of review be done on a case-by-case basis, where there is a significant variation in the prices charged?

Not applicable since I do not believe that change is necessary.

One way to discourage significant variations in price would be to publicize the unfairness of it on an ad hoc basis. I would be content with PMPRB doing this.

Ms. Anne Tomalin
CanReg Inc.
4 Innovation Drive
Dundas, Ontario
L9H 7P3

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