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

1.0 Product Summary

1.1. Gonal F (follitropin alfa) is indicated for the stimulation of multiple follicular development in ovulatory patients undergoing Assisted Reproductive Technologies (ART) such as in vitro fertilization. Gonal F is also indicated for the stimulation of follicular development in patients with hypothalamic-pituitary dysfunction who present either oligomenorrhoea or amenorrhoea.

1.2. Canadian Patent 1340649 pertaining to Gonal F was granted to Industria Farmaceutica Serono S.P.A (Italy) on July 13, 1999, and will expire on July 13, 2016. Canadian Patents 2335340 and 2518903 pertaining to Gonal F were granted to Ares Trading S.A. (Switzerland) on March 5, 2013, and February 5, 2013, and will expire on July 15, 2019, and April 2, 2024, respectively.

1.3. Health Canada issued a Notice of Compliance (NOC) for Gonal F 300 IU pen,
Gonal F 450 IU pen and Gonal F 900 IU pen on August 19, 2005. Sales in Canada commenced September 6, 2005.

1.4. EMD Inc. is the Canadian subsidiary of Ares Trading S.A (hereafter the patentee) for purposes of the Patent Act and the Patented Medicines Prices Review Board (PMPRB).

2.0 Background to Reporting of Pricing Information to the PMPRB

2.1 In December 2012, EMD Inc. advised Board Staff that it became aware of the existence of Canadian Patent 1340649 and subsequently filed Amended Form 1 Medicine Information Sheets and Form 2 price and sales data from January 1999 to December 2013.

3.0 Application of the Excessive Price Guidelines

3.1 In September 2005 the introductory prices of Gonal F 300 IU pen, Gonal F 450 IU pen and Gonal F 900 IU pen exceeded the Guidelines but did not trigger the investigation criteria.

3.2 In 2010, the price of Gonal F 300 unit pen exceeded the Guidelines triggering the investigation criteria based on the CPI-Adjustment Methodology. In particular, the 2010 average transaction price of Gonal F 300 unit pen was 4.7% above the National-Non Excessive Average Price (N-NEAP) resulting in excess revenues above $50,000. As of December 31, 2013, cumulative excess revenues were $1,159,170.01.

3.3 In 2011, the price of Gonal F 450 unit pen exceeded the Guidelines triggering the investigation criteria based on the CPI-Adjustment Methodology. In particular, the 2011 average transaction price of Gonal F 450 unit pen was 3.9% above the N-NEAP resulting in excess revenues above $50,000. As of December 31, 2013, cumulative excess revenues were $456,117.61.

3.4 In 2011, the price of Gonal F 900 unit pen exceeded the Guidelines triggering the investigation criteria based on the CPI-Adjustment Methodology. In particular, the 2011 average transaction price of Gonal F 900 unit pen was 0.6% above the N-NEAP resulting in excess revenues above $50,000. As of December 31, 2013, cumulative excess revenues were $51,714.86.

3.5 As of December 31, 2013, combined cumulative excess revenues for all three strengths of Gonal F pens are $1,667,002.48.

4.0 Position of Patentee

4.1 This Voluntary Compliance Undertaking (VCU) constitutes no admission by EMD Inc. that the prices of Gonal F pens are or were excessive for purposes of the Patent Act.

5.0 Terms of the Voluntary Compliance Undertaking

In order to comply with the Guidelines, EMD Inc. agrees to undertake the following:

5.1 To agree that the N-NEAPs for Gonal F are as follows:

5.2 To ensure the 2014 average transaction prices of the Gonal F 300 IU pen, Gonal F 450 IU pen and Gonal F 900 IU pen do not exceed the 2014 N-NEAPs outlined above.

5.3 To offset cumulative excess revenues received by EMD Inc. as of December 31, 2013, by making a payment to Her Majesty in right of Canada in the amount of $1,667,002.48 within 30 days of the acceptance of this VCU.

5.4 To offset any additional excess revenues received from January 1, 2014 to June 30, 2014, as calculated by Board Staff, within 30 days of the filing of the January to June 2014 price and sales data.

5.5 To ensure that the prices of Gonal F remain within the Guidelines in all future periods in which Gonal F is under the PMPRB's jurisdiction.

Original signed by: Rehan Verjee
Position: President & Managing Director
Patentee: EMD Inc.
Date: June 5, 2014