July 2010 NEWSletter

Volume 14, Issue 3

Since our last issue...

Our recent key events....

May 6:

Barbara Ouellet delivered a presentation, A Modern Regulator for a Changing Industry, at the Drug Patents in Canada conference in Toronto.

May 10:

The HDAP held its quarterly meeting.

May 11:

Greg McComb presented the results of an NPDUIS study, Public Drug Plan Professional Fees: A Cost-Driver Analysis, at the 2010 Annual Conference of the Canadian Association for Health Services and Policy Research (CAHSPR) in Toronto.

May 13:

The Board held its quarterly meeting.

May 26–28:

Mary Catherine Lindberg and Barbara Ouellet participated in the Northwind Professional Institute's 2010 Life Sciences Invitational Forum held in Cambridge, Ontario.

May 27:

The NPDUIS Steering Committee held a teleconference call in which PMPRB Staff provided a status update on current research projects and announced the launch of a secure network to provide Steering Committee members with access to NPDUIS-related information.

June 15:

Barbara Ouellet delivered a presentation, A Responsive Regulator in a Time of Change, at The Canadian Institute's 4th Annual Drug Pricing & Reimbursement in Toronto.

June 16:

The 2009 PMPRB Annual Report was tabled in Parliament. Mary Catherine Lindberg announced the appointment of a new Executive Director, Michelle Boudreau, who will be joining the PMPRB on August 30, 2010.

June 18:

The Board issued a Notice and Comment seeking comments on its proposal to approve a Voluntary Compliance Undertaking in respect to the price of the patented medicine FASLODEX, on or before September 17, 2010.

July 22:

The NPDUIS Steering Committee held a teleconference call in which PMPRB Staff provided a status update on current research projects and discussed plans for a fall meeting in Ottawa.

A Message from the Vice-Chairperson

As I take on new responsibilities delegated to me by the departure of Dr. Brien Benoit as Chair, I would like to take a moment to thank Dr. Benoit for his many lasting contributions to the PMPRB. His dedication and hard work during our lengthy stakeholder consultations over the new Guidelines have given the Board a solid foundation to build on. His term saw considerable changes in the industry, but under his leadership, the Board has been able to set a course that benefits the industry, the Board, and Canadians as a whole.

I would also like to acknowledge the energy and dedication of Barbara Ouellet, who retired as Executive Director in June after a long and successful career in the public service, including five years at the PMPRB. Her successor, Michelle Boudreau, joins the PMPRB with a long list of accomplishments at Health Canada and an impressive background that includes intellectual property law and pharmacy. We are delighted to welcome her aboard.

The tabling of the PMPRB's Annual Report in Parliament on June 16, 2010, was an opportunity to remind Members of Parliament and all Canadians about the important role of the PMPRB in ensuring that Canadians do not pay excessive prices for patented medicines. The success of this organization in meeting the mandate that Parliament has given it is clear.

As the PMPRB moves forward in the fulfillment of its mandate, the Board remains committed to predictability, fairness, and transparency.

Mary Catherine Lindberg

Comings and Goings

A few new employees have joined us since the last NEWSletter. Tom Kloppenburg and Carol McKinley are the newest members of the Board Secretariat and Communications Branch. Mark Leger recently joined the Corporate Services Branch as the new Manager of Information Management.

National Public Service Week

National Public Service Week (NPSW) is an opportunity to celebrate the work and achievements of the individuals who make up the Public Service of Canada. It is a special occasion to recognize public servants and the important role we play in Canadian society. This year, from June 13 to 19, the NPSW celebrated the theme “Together, shaping Canada's future.”

The PMPRB celebrated NPSW by distributing small mementos to all employees. On June 14, we held a delicious lunch. Everyone enjoyed the meal and the opportunity to mingle informally with their colleagues.

The Board thanks everyone for their hard work and commitment to the PMPRB throughout the year and offers its best wishes of success in the coming months.

New Executive Director

The Board is very pleased to welcome Michelle Boudreau to the position of Executive Director of the PMPRB. Ms. Boudreau will officially begin her term on August 30, 2010.

Michelle Boudreau comes to the PMPRB from Health Canada where she was Director General of the Natural Health Products Directorate since September 2008. She has extensive experience in the development of government policy. She worked on legislative and regulatory changes in the area of copyright policy at Canadian Heritage and in the development of patent and biotechnology policy at Industry Canada. Ms. Boudreau was legal counsel with the Health Canada Legal Services Unit and Director of the Compliance and Enforcement Division within the Health Products and Food Branch Inspectorate. She also worked as Executive Advisor to the Deputy Minister of Health.

Ms. Boudreau holds a Bachelor of Science in Pharmacy from Dalhousie University and a Bachelor of Laws from the University of Ottawa.

2009 Annual Report

The PMPRB Annual Report for the year ending December 31, 2009, was tabled by the Minister of Health with the Clerks of the House of Commons and Senate on June 16, 2010.

The report provides detailed information on sales and price trends of patented drugs sold in Canada, including international comparisons, patentees' compliance with the Board's price Guidelines, regulatory activities, and spending on pharmaceutical R&D spending.

In 2009, sales of patented drugs in Canada increased by 2.8% to $13.3 billion, representing 62.4% of all drug sales, a slight decrease from 2008. Prices of patented drugs (as measured by the Patented Medicines Price Index) rose on average by 0.3% in 2009, while the Consumer Price Index was also 0.3% during the same period. Canadian prices ranked third of the seven comparator countries, lower than the U.S. and Germany.

Patentees reported 81 new patented drug products to the PMPRB in 2009, including 22 new active substances. A total of 1,177 patented drug products for human use were under the PMPRB's jurisdiction in 2009. As of the date of the release of the 2009 Annual Report, investigations were ongoing into the prices of 90 patented drugs.

While the vast majority of prices remained within the Board's Guidelines, the Board approved, to the end of May 2010, 17 Voluntary Compliance Undertakings worth more than $43 million in order to reduce prices and reimburse excess revenues. The Board also completed five price hearings and issued two Notices of Hearing. Decisions are pending in three matters, and four proceedings are ongoing.

Spending on pharmaceutical R&D continued to decline in 2009. Patentees reported spending $1.2 billion on R&D, a drop of 2.9% over 2008. Members of Rx&D (Canada's Research-Based Pharmaceutical Companies) accounted for 89.1% of all reported R&D expenditures. The ratio of R&D investment to sales also declined to 7.5% from 8.1% in 2008, while the

May 13, 2010 Board Meeting

The Board met on May 13, 2010, to approve the 2009 Annual Report. Board Members thanked Dr. Benoit for his hard work and leadership as his term as Chairman came to an end. The Board's next meeting is scheduled for September 16, 2010.

Voluntary Compliance Undertakings

A Voluntary Compliance Undertaking (VCU) is a written undertaking by a patentee to adjust its price to conform to the Board's Guidelines. Under the Guidelines, 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 drug product sold in Canada appears to have exceeded the Guidelines. A VCU can also be submitted by a patentee after a Notice of Hearing is issued.

In the last quarter, four VCUs were accepted for: Busulfex, Dicetel, Levemir and Adenoscan.

Busulfex, Otsuka America Pharmaceutical Inc.

On June 15, 2010, the Vice-Chairperson approved the VCU submitted by Otsuka America Pharmaceutical Inc. for the medicine Busulfex. In order to comply with the PMPRB Guidelines, Otsuka agreed to offset excess revenues received during the period of March 8, 2008, to December 31, 2009, by making a payment to the Government of Canada in the amount of $22,092.48.

Dicetel, Solvary Pharma

On May 13, 2010, the Chairman approved the VCU submitted by Solvay Pharma Inc. for the medicine Dicetel. Under the terms of the VCU, Solvay Pharma offset cumulative excess revenues received from January 1, 2008, to December 31, 2009, by making a payment to the Government of Canada in the amount of $31,287.32. Solvay will make an additional payment to the Government of Canada for any excess revenues received from January 1, 2010, to the date of the acceptance of this VCU as calculated by Board Staff, or before August 30, 2010.

Levemir, Novo Nordisk

On May 8, 2010, the Chairman approved the VCU submitted by Novo Nordisk Canada Inc. Under the terms of the VCU, Novo Nordisk offset cumulative excess revenues received from January 3, 2006, to December 31, 2009, by making a payment to the Government of Canada in the amount of $6,035,903.54. Novo Nordisk Canada also made an additional payment to the Government of Canada for excess revenues received from January 1 to March 31, 2010, based on its filing of price and sales data for the said period in the amount of $432,336.79.

Adenoscan, Astellas Pharma Canada Inc.

On May 8, 2010, the Chairman of the Board approved the VCU submitted by Astellas Parma Canada Inc. for the medicine Adenoscan. Under the terms of the VCU, Astellas offset the cumulative excess revenues received from 1996 to August 4, 2009, in the amount of $34,545.32 by making a payment to the Government of Canada.

The prices of these drugs will remain under the Board's jurisdiction for the duration of their respective patents.

Hearings – Update

The PMPRB's regulatory mandate is to ensure that prices at which patentees sell their patented medicines in Canada are not excessive.

In the event that the price of a patented medicine appears to be excessive, the Board can hold a public hearing and, if it finds that the price is excessive, it may issue an order to reduce the price and to offset revenues received as a result of excessive prices. Board decisions are subject to judicial review in the Federal Court of Canada.

Status of Board Proceedings

Redetermination of the Copaxone Matter

The Board issued a Notice of Hearing in the matter of Copaxone on May 8, 2006. After having heard the matter, the Hearing Panel issued its decision and reasons on February 25, 2008, and its Order on May 12, 2008. The Respondent filed an application for judicial review with the Federal Court. In its decision of November 12, 2009, the Federal Court set aside the Board's decisions and returned the matter to the Board for redetermination, preferably by a different panel.

Accordingly, the matter was remitted and a second panel was struck to hear the matter. Counsel to Teva and Board Staff were so informed on February 4, 2010.

On April 9, 2010, Teva submitted a Voluntary Compliance Undertaking (VCU) for consideration by the Chairperson. Board Staff objected to having the Chairperson consider the VCU and argued that the (second) Panel should consider the VCU. Given this dispute, the Panel was not made privy to the content of the VCU and directed that the parties make written submissions on the issue.

After considering the written submissions, the Panel determined that the Chairperson would consider the VCU. Parties were then asked to file written submissions in support of their positions on the VCU. On May 18, 2010, the term of the Chairperson expired, and since a new Chairperson had not yet been appointed, subsection 93(3) of the Patent Act provides that the Vice-Chairperson has all the powers and functions of the Chairperson during the vacancy, and as such, the Vice-Chairperson considered the appropriateness of the VCU.

On June 24, 2010, the Vice-Chairperson declined the VCU. The redetermination of this case is scheduled to be held October 4 and 5, 2010.

Supplementary Order in the Matter of Shire Canada Inc. and the Medicine Adderall XR

On August 27, 2008, the Hearing Panel issued an Order for the price reduction of Adderall XR and the offset of excess revenues accrued by Shire Canada from the sale of the medicine.

Shire complied with the Board Order by reducing the price of Adderall XR and offsetting excess revenues received for the period of September 12, 2002, to December 31, 2007, by making a payment of $5,622,863.63 to the Government of Canada.

As for excess revenues accrued for the period of January 2008 to September 15, 2008, the date on which the price reduction of Adderall XR came into effect, Shire was ordered to pay Her Majesty in Right of Canada a further amount equal to the amount of the excess revenues estimated by the Board to have been derived by Shire from the sale of Adderall XR in its 5, 10, 15, 20, 25 and 30 mg strengths at excessive prices and to make the payment within 30 days of receipt of a notification from the Board of its estimate of excess revenues based on the information filed with the Board.

Shire subsequently requested that the amount it owed for the period from January 2008 to September 12, 2008, when the price reductions came into effect for the 5, 10, 15 and 20 mg strengths, be reduced to reflect credits that it provided for stock of said strengths sold before September 12, 2008, at the price which was found to be excessive, even though these credits were given after September 12, 2008.

Board Staff calculated the amount of excess revenue owing, net of the credits, for the period January 1, 2008, to December 31, 2008. Furthermore, Board Staff and Shire reached an agreement with regard to further calculations of excesspricing and requested that same be reflected in a Supplementary Order.

As a result, the Panel issued a Supplementary Order on May 10, 2010, requiring Shire to pay the total sum of $544,931.22 to the Government of Canada, with which Shire complied.

Matter Before the Supreme Court of Canada

On April 22, 2010, Celgene Corporation was granted leave to appeal to the Supreme Court of Canada in the Thalomid matter. After a hearing in August 2007, the Board issued its decision in January 2008 asserting its jurisdiction over the price of Thalomid. That decision was appealed to the Federal Court and then to the Federal Court of Appeal, which upheld the Board decision. Celgene Corporation was granted leave to appeal to the Supreme Court of Canada. The hearing has been set for November 10, 2010.

Notice and Comment on the Price of the Medicine FASLODEX

On June 18, 2010, the Board issued a Notice and Comment on the price of the patented medicine FASLODEX. The purpose of a Notice and Comment is to provide Ministers of Health in the provinces and territories of Canada and other interested persons with an opportunity to make submissions on the appropriateness of accepting a Voluntary Compliance Undertaking with respect to the price proposed by a patentee for a specific patented medicine.

Interested parties have until September 17, 2010, to submit their comments to the Board. For more details, including contact information for filing a submission, see the PMPRB Web site at What's New.

New Patented Medicines Reported to the PMPRB

New drug products first sold in 2010 will be reviewed based on the Guidelines implemented on January 1, 2010. As of June 30, 2010, a total of 28 new drug products (DINs) were reported to the PMPRB (representing 22 medicines). Information on these patented drug products can be found on the PMPRB Web site at Regulatory/Patented Medicines/New Medicines Introduced in/2010.

Human Drug Advisory Panel Process and 2011 Schedule

The Human Drug Advisory Panel (HDAP) provides expertise and advice to Board Staff in conducting the scientific review. The HDAP performs the following functions:

• reviews and evaluates scientific information;
• considers advice from other experts (when deemed necessary);
• recommends the level of therapeutic improvement of the new patented drug product, and identifies drug products for comparison purposes and dosage regimens where possible; and
• identifies significant uncertainties in the evidence that may affect the analysis on which its recommendations are based.

The HDAP is composed of six members with recognized expertise in drug therapy and experience in clinical research methodology, statistical analysis and the evaluation of new drug products. The members are Dr. Fred Aoki, Dr. Jean Gray, Dr. Jacques LeLorier, Dr. Mitchell Levine, Dr. Muhammad Mamdani and Dr. Adil Virani.

For further information on the HDAP and the scientific review process, please refer to Part C, Scientific Review Process,

The HDAP meets four times a year. The dates of the meetings for 2011 are as follows: February 7, May 16, September 8 and November 7.

To provide for fairness to the patentee, to ensure that a drug product will in fact be scheduled for discussion at a meeting and to expedite the process, Board Staff requires that a patentee file a product monograph or information similar to that contained in a product monograph before the scheduled meetings.

Over the past couple of years, the deadline for filing submissions has been no later than three months prior to the particular HDAP meeting. However, due to the fact that the majority of patentees and consultants filing on behalf of patentees have been filing on the last day, the deadline for submission of the product monograph or information similar to that contained in a product monograph has been advanced by two weeks to permit sufficient time to process all of the submissions for a particular meeting.

The patentee will be advised of the date of the HDAP meeting at which its submission will be considered.

A patentee wishing to make a submission with respect to the level of therapeutic improvement, the selection of drug products, and dosage regimens to be used for comparison purposes, must make its submission no later than 10 weeks prior to the particular HDAP meeting. For more information on what should be included in a submission, please refer to Schedule 1 of the Compendium, Submissions by Patentees on Level of Therapeutic Improvement.

Although the actual submission on the level of therapeutic improvement is due no later than 10 weeks prior to the particular HDAP meeting, patentees are requested to indicate whether they intend to make such a submission and indicate the level of therapeutic improvement to be addressed in the submission at the same time as the product monograph or information similar to that contained in a product monograph is filed.

The following table provides the submission deadlines for the HDAP meetings in 2011.

Report on New Patented Drugs – Pristiq

Under its transparency initiative, the PMPRB publishes the results of the reviews of new patented drug products conducted by Board Staff for purposes of applying the Board's pre-2010 Guidelines for all new active substances introduced in Canada after January 1, 2002.

Brand Name: Pristiq

Generic Name: (desvenlafaxine succinate)

DIN: 02321092 (50 mg tablet), 02321106 (100 mg tablet)

Patentee: Wyeth Pharmaceuticals

Indication – as per product monograph: For the symptomatic relief of major depressive disorder.

Date of Issuance of First Patent Pertaining to the Medicine: October 17, 2006

Notice of Compliance: February 4, 2009

Date of First Sale: March 5, 2009 (DIN 02321092), March 6, 2009 (DIN 02321106)

ATC Class: N06AX23, Nervous system; psychoanaleptics; antidepressants; other antidepressants.

Application of the Guidelines

Summary

The introductory prices of Pristiq were found to be within the pre-2010 Guidelines because the cost of therapy did not exceed the cost of therapy of existing drug products in the therapeutic class comparison and did not exceed the range of prices of the same drug products in the comparator countries listed in the Patented Medicines Regulations (Regulations) in which Pristiq was sold.

Scientific Review

Pristiq is a new active substance and the PMPRB's Human Drug Advisory Panel (HDAP) recommended that Pristiq be classified as a category 3 new medicine (provides moderate, little or no therapeutic advantage over comparable existing drug products).

The Therapeutic Class Comparison (TCC) test of the pre-2010 Guidelines provides that the price of a category 3 new drug product cannot exceed the prices of other drugs that treat the same disease or condition. Comparators are generally selected from among existing drug products in the same 4th level of the World Health Organization (WHO) Anatomical Therapeutic Chemical (ATC) classification system that are clinically equivalent in addressing the approved indication. See the PMPRB's Compendium of Guidelines, Policies and Procedures “up to 2009” for a more complete description of the Guidelines and the policies on TCCs.

The HDAP recommended venlafaxine (Effexor XR), trazodone (Desyrel), mirtazapine (Remeron RD), buproprion (Wellbutrin) and duloxetine (Cymbalta) as the appropriate comparators to Pristiq. They all share the same 4th level ATC class and the same indication as Pristiq. There were no comparative trial data to support the inclusion of drug products outside the 4th level ATC.

The pre-2010 Guidelines provide that the dosage recommended for comparison purposes will normally not be higher than the maximum of the usual recommended dosage. The recommended comparable dosage regimens for Pristiq and the comparable drug products were based on the respective product monographs and supported by clinical literature.

Price Review

Under the pre-2010 Guidelines, the introductory price of a category 3 new drug product will be presumed to be excessive if it exceeds the price of all the comparable drug products based on the TCC test or if it exceeds the range of prices of the same drug product sold in the seven countries listed in the Regulations.

The introductory prices of Pristiq were within the pre-2010 Guidelines as the cost per treatment did not exceed the cost per treatment of the comparable drug products as shown in the following table.

Introductory Period (March to June 2009) – Pristiq 50 mg per tablet and 100 mg per tablet

Sources:
1 PPS Pharma, 2010
2 Association québécoise des pharmaciens propriétaires, 2009

In 2009, both strengths of Pristiq were sold in one country listed in the Regulations, namely, the United States. In compliance with the Guidelines, the prices of Pristiq in Canada did not exceed the prices of the same drug product in this country.

Upcoming Events

September

September 9 (to be confirmed): NPDUIS Steering Committee teleconference call

September 15: HDAP meeting

September 16: Board meeting

October

October 4–5: Redetermination Hearing in the matter of Teva Neuroscience and the medicine Copaxone Market Access Canada Summit, Toronto

October 6–8: Market Access World USA conference, Washington, D.C.

October 7: Sedgwick County Health Care Roundtable Seminar, Wichita, Kansas

October 27: Risk Sharing Americas 2010

October 30: October NEWSletter

November

November 1: CIHI's NPDUIS Database Advisory Group meeting

November 2: NPDUIS Steering Committee meeting in Ottawa

November 4–5: 9th Annual Conference on Market Access, Toronto

November 4–5: 9th Annual Forum on Pharma Patents, Toronto

November 4–5: DIA Annual Canadian Meeting, Ottawa

November 17: HDAP meeting

November 23–24: Gestion des risques associés à la conformité réglementaire dans le domaine pharmaceutique, Montréal

December

December 2–3: Canadian Pharmaceutical Pricing and Reimbursement Conference, Toronto

December 6–8: Hearing in the matter of Sandoz Canada Inc.

December 9: Board meeting