Newsletter July 2007

Volume 11, Issue No. 3

Table Of Contents

1. Since our last issue
2. Comings and Goings
3. News from the Chairperson
4. Update on the Review of the Board’s Excessive Price Guidelines
5. Hearings – Update
6. Human Drug Advisory Panel (HDAP) 2008 Schedule
7. Voluntary Compliance Undertakings
8. NPDUIS - Update
9. Monitoring and Reporting of Non-Patented Prescription Drug Prices
10. Report on New Patented Drug – Gardasil, Merck Frosst Canada Ltd.
11. List of New Drugs Introduced since the publication of the April 2007 NEWSletter
12. Patented Medicine Prices Review Board – May 2007 Meeting
13. Upcoming Events

Since our last issue

Here are some of the key events that occurred since the end of April 2007.

• May 6-8: Sylvie Dupont attended to the Canadian Council of Administrative Tribunals (CCAT) Annual Conference in Vancouver.
  
  
• May 8-9: The Executive Staff attended the APEX Symposium in Ottawa.
  
  
• May 11: Ron Corvari and Christine McKennirey participated in the NPDUIS Steering Committee Meeting in Ottawa.
  
  
• May 16-17: The Board met to discuss the next steps in the review of its Excessive Price Guidelines and released its preliminary response to the issues and the views expressed in its May 31 Communiqué (available on our Web site under Consultations).
  
  
• May 18: The Board held its second quarterly meeting. A summary of the Minutes is available on page 9. Minutes of Board meetings are also available on our Web site under About the PMPRB; Summary of Board Meetings.
  
  
• May 19-23: The Guidelines for Conducting Pharmaceutical Budget Impact Analyses (BIA) for Submission to Public Drug Plans in Canada were released. Innovus, authors of the BIA Guidelines, presented a poster on the Guidelines at the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) 12th Annual International Meeting, held in Virginia, USA. Innovus made a second presentation of the poster at the Canadian Therapeutics Congress in Halifax, held May 27 to 30. The Guidelines are available on our Web site under Reporting; National Prescription Drug Utilization Information System (NPDUIS); Analytical Study Series.
  
  
• May 24: The Board approved a Voluntary Compliance Undertaking (VCU) in the matter of 3M Canada Company and the medicine Airomir and concluded its hearing initiated in 2006.
  
  
• May 31: The PMPRB presented its Annual Report for the year 2006 to the Minister of Health. The Board issued its Stakeholders´ Communiqué on the review of its Excessive Price Guidelines.
  
  
• June 2-5: Maria Gutschi gave a presentation – “Why do Vitamins need to B-Complex” – at the Annual General Meeting of the Canadian Pharmacists Association, in Ottawa.
  
  
• June 4: The Human Drug Advisory Panel (HDAP) held its meeting in Ottawa.
  
  
• June 5: Barbara Ouellet gave a speech at the Canadian Institute´s conference on Drug Pricing and Reimbursement in Canada, in Toronto. Her speech, Highlighting the Mandate of the PMPRB and Recent Developments in Price Regulation, is available on our Web site under Publications; Speech Series; 2007.
  
  
• June 6: The Board held a pre-hearing conference in the matter of sanofi-aventis Canada Inc. and its medicine Penlac Nail Lacquer. The hearing date will be announced shortly. Updates on the PMPRB Hearing Schedule are posted on our Web site under Regulatory; Hearings.
  
  
• June 7: The Board approved a VCU in the matter of Janssen-Ortho Inc. and the medicine Risperdal Consta and concluded its hearing initiated in 2006.
  
  
• June 11-12: The Board resumed its public hearing in the matter of Janssen-Ortho Inc. and its medicine Concerta. The Hearing Panel will hear closing arguments in this matter on August 29, 2007.
  
  
• June 12: Marie-Sophie Jobin attended the Health Council of Canada Pharmaceuticals Symposium – Safe and Sound – Optimizing Prescribing Behaviours, in Montréal.
  
  
• June 13: Marie-Sophie Jobin attended the “Réseau québécois de recherche sur l´usage des médicaments – Le médicament en prévention primaire : Écarts entre l´efficacité clinique et l´efficience”, in Montréal.
  
  
• June 18: The Board heard the parties´ closing arguments in the matter of Shire BioChem Inc. and its medicine Adderall XR.
  
  
• June 27: The Board heard Board Staff´s closing arguments in the matter of Teva Neuroscience G.P.-S.E.N.C. and its medicine Copaxone. Closing arguments will resume on August 13, 2007.
  
  
• June 28: The Board issued a Communiqué further to an article in its April 2007 NEWSletter following the release of the Federal Court decision in LEO Pharma.
  
  
• June 29: The PMPRB released its third quarterly report on Non-Patented Prescription Drug Prices (NPPDP) – Market for New Off-Patent Drugs.
  
  
• July 4: The PMPRB released its New Drug Pipeline Monitor under the provisions of the NPDUIS.
  
  
• July 17: The Board met with representatives of BIOTECanada.
  
  
• July 18: The PMPRB 2006 Annual Report was released.
  
  
• July 24: The Board issued a Notice of Hearing in the matter of Abbott Laboratories Limited and its medicine Zemplar. The hearing is scheduled to commence on December 10, 2007. A pre-hearing conference has also been scheduled for November 13.

Comings and Goings

• Rebecca Szilagyi has joined the NPDUIS group in the Policy and Economic Analysis Branch.
  
  
• Gary McDonald has joined the Policy and Economic Analysis Branch in the area of Non-Patented Prescription Drug Price (NPPDP) reporting.
  
  
• Carmen Osborne returned to the Compliance and Enforcement Branch from a one-year maternity leave. Welcome back!
  
  
• Larissa Lefebvre joined the Compliance and Enforcement Branch as a Statistical Research Assistant.
  
  
• Joanne Butler and Amanda Moir both returned to Health Canada after working for nearly a year on the review of the Board´s Excessive Price Guidelines with the Policy and Economic Analysis Branch.
  
  
• Hans Lefebvre returned to Defence Research and Development Canada after a one-year assignment with the Information Systems Group.

News from the Chairperson

PMPRB Annual Report for the year 2006

Our 2006 Annual Report was just released. Sales of patented drugs in Canada increased by 3.7% in 2006, to $12 billion, representing 68.1% of total sales of drugs in 2006.

Ninety nine (99) new patented drug products (DINs) for human use were reported to the PMPRB in 2006, of which 29 medicines, representing 43 DINs, were new active substances. A total of 1181 patented drug products for human use were under the PMPRB´s jurisdiction last year.

Patentees reported total R&D expenditures of $1.2 billion in 2006, while members of Rx&D reported R&D expenditures of $949 million over the same period. For all patentees, the R&D-tosales ratio continues its downward trend to 8.1% from 8.7% in 2005, as did the R&D-to-sales ratio for members of Rx&D – 8.5% compared to 8.8% in the previous year.

We continue to enhance our reporting by providing more in-depth analysis of the key pharmaceutical indices. A number of studies and reports were published under the National Prescription Drug Utilization Information System (NPDUIS) and under the Non-Patented Prescription Drug Prices (NPPDP) initiatives.

Our consultations with stakeholders on the review of the Board´s Excessive Price Guidelines were pursued. Working groups are being established and bilateral meetings with representatives of governments, consumers and the industry will be held in September. More detailed information on the review of our Guidelines is available on our Web site.

The PMPRB is increasingly being challenged to respond to new demands. Transparency and accessibility remain the central elements of the PMPRB to continue to protect consumer interests and to contribute to heath care.

Brien G. Benoit, MD

Update on the Review of the Board’s Excessive Price Guidelines

On May 31, 2007, the Board issued its Stakeholders´ Communiqué, outlining the next steps in the review of its Excessive Price Guidelines.

Further meetings have been scheduled for September, providing stakeholders an opportunity to raise any comments directly with Board Members in relation to the issues discussed in the Communiqué, along with any other concerns they may, or not, have raised in previous consultations. These meetings will build upon what the Board has heard to date about its Guidelines, through the comments it received on its May 2006 Discussion Guide, and the discussions in November.

In order to ensure transparency in regard to this and other bilateral meetings, and to enable the Board to have a record of the views of each set of stakeholders, the participants are expected, following the meeting, either individually or as a group, to make a written submission to the Board outlining the key concerns and messages raised at the meeting. These submissions, along with the names of participants for each meeting, will be posted on the PMPRB´s Web site for the information of all interested stakeholders.

Also announced in the Communiqué was the creation of three Working Groups. The Terms of Reference for each Working Group are posted on our Web site under Consultations.

The Excessive Price Guidelines are of fundamental importance to the work of the PMPRB. The continuing contribution of all stakeholders to this review process will be important in ensuring that any possible changes to the Guidelines are in the best interest of all Canadians. The Board wishes to thank all stakeholders that have provided comments to date.

Hearings – Update

PMPRB Hearing Schedule

Human Drug Advisory Panel (HDAP) 2008 Schedule

Voluntary Compliance Undertakings

Under the Compliance and Enforcement Policy, patentees are given an opportunity to submit a VCU when Board Staff concludes, following an investigation, that the price set forth by the patentee for a patented medicine sold in Canada appears to have exceeded the Board´s Excessive Price Guidelines (Guidelines).

Airomir

On May 14, 2007, the Board approved a VCU agreed to by 3M Canada Company (3M Canada) and Board Staff, for the payment in full of revenues alleged by Board Staff to have been excessive, totalling $485,498.58, derived from January 1, 2004 to December 29, 2006. By order of the Board, the proceeding that had been commenced by the issuance of a Notice of Hearing on February 20, 2006, was concluded. 3M Canada has met the terms of the VCU.

For purposes of the application of the Board´s Excessive Price Guidelines, Graceway is the Canadian patentee of Airomir as of December 29, 2006. Under the Patented Medicines Regulations, 1994, Graceway is required to file pricing and sales information with the PMPRB twice a year, at regular intervals, as well as file its R&D expenditures annually.

Risperdal Consta

On June 7, 2007, the Board approved a VCU agreed to by Janssen-Ortho Inc. and Board Staff to, among others, reduce the price of Risperdal Consta to a non-excessive level and to offset excess revenues in the amount of $4,386,172.99. By Order of the Board, the proceeding that was commenced with the issuance of a Notice of Hearing on January 30, 2006, was hereby concluded.

Janssen-Ortho Inc. has reduced the price of Risperdal Consta and offset excess revenues in the amount of $4.38M as per the VCU.

Forteo, Eli Lilly Canada Inc.

On June 28, 2007, the Chairperson accepted the VCU for Forteo submitted by Eli Lilly Canada Inc. (Lilly).

The VCU includes a reduction of the price of Forteo below the maximum non-excessive price for 2007 in order to offset excess revenues. In the event that all excess revenues have not been offset by December 31, 2007, Lilly shall make a payment to the federal government in the amount of the remainder of the excess revenues that have not been offset within 30 days of the filling of the July to December 2007 price and sales data.

The price of Forteo is to remain within the Board´s Guidelines in all future periods in which it remains under its jurisdiction.

NPDUIS - Update

A meeting of the National Prescription Drug Utilization Information System (NPDUIS) Steering Committee was held on May 10-11, 2007 in Ottawa. The PMPRB provided an update on recent and completed projects and sought input from the Steering Committee on new projects to be undertaken.

The Guidelines for Conducting Pharmaceutical Budget Impact Analyses for Submission to Public Drug Plans in Canada were released in May 2007 and are available on the PMPRB Web site. The BIA Guidelines have been developed to provide guidance regarding the methodology and reporting methods to be used when submitting BIAs to the Common Drug Review (CDR), administered by the Canadian Agency for Drugs and Technology in Health (CADTH), or to federal, provincial or territorial drug plans that participate in CDR.

Released in June 2007, the first edition of the New Drug Pipeline Monitor (NDPM) is also available on the PMPRB Web site. Ten drugs are highlighted in this issue and information on their therapeutic potential is provided. Future editions of the NDPM will continue to track the clinical development of these drugs and will highlight potential new drugs. As well, preliminary market analyses will be provided to inform decision makers of potential cost impacts of the new drugs.

• The Steering Committee endorsed several new NPDUIS projects: A pharmaceutical expenditure forecasting methodology and guidelines will be developed to provide guidance for short-term forecasting of drug plan expenditures.
  
  
• Defined Daily Dose (DDD) analyses will be expanded to better understand utilization trends and cost drivers for leading therapeutic groups.
  
  
• A previous costing analysis of Catastrophic Drug Coverage will be updated for the National Pharmaceuticals Strategy Task Group.

Monitoring and Reporting of Non-Patented Prescription Drug Prices

The PMPRB´s third quarterly report on Non- Patented Prescription Drug Prices (NPPDP) was published in June - Market for New Off-Patent Drugs.

This report examines brand name drug products that have gone off-patent between the years 2001 and 2003 and the degree and timing of entry of generic products. It was found that little generic entry occurred in Canada in the years immediately following patent expiration. Generic entry occurred for eight of the thirty-nine drugs whose patents expired in these years.

Where generic entry did occur, usually one or two manufacturers entered the market. While most markets for drugs coming off-patent were fairly small, surprisingly in no year did generics enter the largest of available markets. In fact, sales for five of the ten products coming off-patent in 2001, 2002, or 2003 where generic entry occurred had less than $100,000 in sales in the year prior to patent expiry. Three drugs had sales of less than $10,000. Sales exceeded $1 million for three drugs and ranged from $2.2 million to $2.5 million in the year before their patents expired, but none of these markets saw generic entry.

Whether or not generic entry took place, prices of branded drug usually increased after patent expiry. In only one case did the price of the branded product fall considerably and effectively compete with the generics for a share of the market. In contrast, where generic entry did occur, generics were introduced at considerably lower prices than those at which the brand products were last sold under patent protection and tended to be in a range consistent with the 70/90 generic pricing rules of public drug plans.

Overall, the branded price was almost always considerably higher than the average generic price in each year following generic entry, regardless of the year of patent expiry. However, generic entry did tend to moderate branded drug prices as the prices generally increased less for branded drugs that experienced generic competition than for those that did not.

While it is clear that considerable savings to drug plans occurred as a result of patent expiry and the entrance of generics to a number of markets, the impact was limited by the fact that no generics entered the largest off-patent markets. In addition, generic prices tended to be 50 to 65% of the brand price even over time, and the more expensive brands continued to enjoy sizeable market shares.

The fourth report, to be released this summer, will examine trends in prices of non-patented singlesource prescription drugs sold in Canada and abroad. Two reports were released in July and October 2006 respectively: Canadian and Foreign Price Trends examines domestic and international price and sales trends of non-patented prescription drugs. Trends in Canadian Sales and Market Structure analyzes annual growth rates in sales, sources of growth, market shares, sales concentration, and international price comparisons by level of concentration.

Report on New Patented Drug – Gardasil, Merck Frosst Canada Ltd.

Application of the Guidelines

Summary

The introductory price of Gardasil was found to be within the Guidelines because the price in Canada did not exceed the median of the prices of the same drug in those countries listed in the Patented Medicines Regulations, 1994 (Regulations) in which Gardasil was sold.

Scientific Review

Gardasil is a new active substance and the PMPRB´s Human Drug Advisory Panel (HDAP) recommended that Gardasil be classified as a category 2 new medicine. It is a breakthrough medicine as it is the first drug product sold in Canada that addresses effectively both the prevention of infections with HPV types 6, 11, 16 and 18 and the associated precancerous cervical and external genital lesions.

The HDAP did not identify any comparators for Gardasil. There is no drug therapy or vaccine indicated or used for the prevention of HPV and its associated precancerous lesions.

Price Review

Under the Guidelines, the introductory price of a new category 2 drug product will be presumed to be excessive if it exceeds the prices of all comparable drug products, based on a Therapeutic Class Comparison (TCC) test, and the median of the international prices identified in an International Price Comparison (IPC) test. See the PMPRB´s Compendium of Guidelines, Policies and Procedures for a more complete description of the Guidelines.

It was not possible to conduct a TCC test as the HDAP did not identify any comparator drug products. At introduction, the price of Gardasil was within the Guidelines as it did not exceed the median of the international prices identified in an IPC test.

Introductory Period (August to December 2006)

Source: Publicly available prices as per the Patented Medicines Regulations, 1994

List of New Drugs Introduced since the publication of the April 2007 NEWSletter

As of June 30, 2007, there were 18 new DINs for human use (representing 12 medicines) reported to the PMPRB for the year 2007. Of these 18 DINs, 12 DINs (representing 6 medicines) are new active substances. The following table presents the new active substances reported to the PMPRB during the period January to June 2007.

Patented Medicine Prices Review Board – May 2007 Meeting

At its meeting, the Board:

• Approved:
  • The PMPRB Annual Report for the year 2006 and the Communications Plan

• Was briefed on:
  • The PMPRB´s contribution to the National Pharmaceuticals Strategy, and
  • The publications under the NPDUIS and the NPPDP (as reported in this issue of the NEWSletter)

The date of the next Board meeting will be announced shortly.

Upcoming Events

Upcoming Events are available on our Web site under Consultations; Events.

August

13- Hearing – Closing arguments in Copaxone
22- Board meeting with Rx&D
29- Hearing – Closing arguments in Concerta

September

10- HDAP Teleconference
10-11-12- Bilateral Meetings on the review of the Board´s Excessive Price Guidelines

October

31-Release of the October NEWSletter Quadracel-Pentacel pre-hearing conference

November

13- Zemplar pre-hearing conference
28-29-30- Hearing – Quadracel-Pentacel

December

5- HDAP Teleconference
10- Hearing – Zemplar
12-13- Board Meeting