Frequently Asked Questions, Consumers

Table of Contents

Who do I contact for information on drug pricing?

The patentees' prices of patented medicines are regulated by the Patented Medicine Prices Review Board to ensure that they are not excessive. Patented medicines include prescription drugs and non-prescription drugs. The price of non-patented drugs and non-patented generic drugs are not regulated.

Prices of drugs that are not patented are not directly regulated. You may want to write to the Minister of Health or contact your provincial or territorial department of health to obtain more information on the drugs that are covered under the public drug plan.

Who do I contact to complain about the price of a drug product?

In the case of a patented drug product, you will want to contact the PMPRB. We will verify that the medicine is indeed patented and under the PMPRB's jurisdiction and we will look into the matter for you. In the case of a substantiated complaint, the PMPRB may start an investigation.

In the case of non-patented medicines you may want to write to the Minister of Health or contact your provincial or territorial department of health to obtain more information on the drugs that are covered under the public drug plan.

What is the Patented Medicine Prices Review Board (PMPRB)?

Created in 1987 under the Patent Act as an independent quasi-judicial tribunal, the PMPRB limits the prices set by patentees for all patented medicines, new and existing, sold in Canada, under prescription or over the counter, to ensure they are not excessive.

What are the role and mandate of the Patented Medicine Prices Review Board?

As an independent quasi-judicial body, the PMPRB carries out its mandate independently of other organizations such as Health Canada, which approves drugs for safety and efficacy, and public drug plans, which approve the listing of drugs on their respective formularies for reimbursement purposes.

The PMPRB has a dual role:

Regulatory: To ensure that prices charged by patentees for patented medicines sold in Canada are not excessive.

Reporting: To report on pharmaceutical trends of all medicines and on the R&D spending by pharmaceutical patentees.

What is a patented medicine?

A patented medicine is a drug protected by a patent which provides exclusive rights to the patent holder to use the invention for the duration of the patent.

What is a patent?

A patent is an instrument issued by the Commissioner of Patents in the form of letters patent for an invention that provides its holder with a monopoly limited in time. It gives the patentee the exclusive right to make, sell, or otherwise exploit the invention for the duration of the patent.

What is a non-patented medicine?

A non-patented medicine is a drug that is not protected by a patent, either because the medicine was never patented or the patent expired. Non-patented medicines include generic drugs and some brand name drugs.

What is a generic drug?

A drug which is the same as a brand name drug and is allowed to be produced and marketed after the brand name drug's patent has expired.

What is the difference between prescription drugs, over the counter drugs and non-prescription drugs?

Prescription drugs are usually prescribed by a physician, dispensed by a pharmacist and received either in hospital or in the community. A prescription drug may or may not be patented.

Over the counter (OTC) drugs or non-prescription drugs are legally available without a prescription but may be prescribed. Usually paid for directly by the consumer but, when prescribed, OTC medicines are sometimes covered by public and private drug plans. An over the counter drug may or may not be patented.

What type of medicine does the PMPRB regulate?

The PMPRB regulates the patentees' prices of patented medicines sold in Canada to ensure that they are not excessive. The regulation of the medicine is the responsibility of Health Canada under the Food and Drugs Act and Regulations.

The PMPRB reviews the "factory-gate" price, i.e., the price at which the patentee sells the patented medicine to wholesalers, hospitals and pharmacies and others. The PMPRB does not have jurisdiction over prices charged by wholesalers or retailers nor over pharmacists' professional fees.

The PMPRB regulates the price of each patented drug product, including each strength of each dosage form of a patented medicine. This is normally the level at which Health Canada assigns a Drug Identification Number.

The PMPRB's jurisdiction includes patented medicines marketed or distributed under voluntary licenses.

Does the PMPRB regulate prices of generic drugs?

The PMPRB has no authority to regulate the prices of non-patented drugs, including non-patented generic drugs.

Who ensures the safety of drugs in Canada?

Health Canada assesses new medicines to ensure that they conform with the Food and Drugs Act and Regulations. Formal authorization to market or distribute a medicine is granted through a Notice of Compliance.

What controls exist to ensure that the prices Canadians pay for drugs are reasonable?

In Canada, the prices of patented medicines only are subject to direct price controls.

To determine if the price of a patented drug sold in Canada is excessive, the PMPRB applies factors set out in the Patent Act and in its price guidelines (See Compendium of Policies, Guidelines and Procedures).

In summary:

  • Most new patented drug prices are limited so that the cost of therapy is in the range of the cost of therapy for existing drugs sold in Canada used to treat the same disease;
  • Prices of moderate and substantial improvement drugs and breakthrough drugs are also restricted by a variety of tests;
  • Existing patented drug prices cannot increase by more than the Consumer Price Index (CPI);
  • In addition, the Canadian prices of patented medicines can never be the highest in the world.

Public drug plans also play a role in drug pricing through the listing of drugs on their respective formularies for purposes of reimbursement.

What factors affect the cost of prescription medicines?

Many factors influence the total cost of drugs:

  • prices of patented drugs
  • prices of non-patented drugs
  • prices of generic drugs
  • retail and wholesale mark-ups
  • pharmacists' professional fees
  • changes in the composition of total population, e.g. proportion of older persons
  • changes in prescribing habits of physicians
  • changes in the utilization of drugs, i.e. number of drugs used per patient
  • trends towards using newer drug therapy instead of other treatments.

How do drug prices in Canada compare to prices in other countries?

The prices of patented medicines in Canada remain at the median of international prices as defined by our comparator countries : France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the USA

How does the PMPRB review the pricing information for all patented medicines sold in Canada?

The PMPRB reviews pricing information on an on-going basis to ensure that the prices comply with the Patent Act and does so for the duration of the patent.

Following the scientific review, the PMPRB reviews the price of the drug to determine if it is within the Guidelines, based on the factors established in the Patent Act (See Compendium of Policies, Guidelines and Procedures).

In summary:

  • Most new patented drug prices are limited so that the cost of therapy is in the range of the cost of therapy for existing drugs sold in Canada used to treat the same disease;
  • Prices of moderate and substantial improvement drugs and breakthrough drugs are also restricted by a variety of tests;
  • Existing patented drug prices cannot increase by more than the Consumer Price Index (CPI);
  • In addition, the Canadian prices of patented medicines can never be the highest in the world.

When Board Staff finds that the price of a patented drug appears to exceed the Guidelines, and where the criteria for commencing an investigation are met, Board Staff will conduct an investigation to determine the facts.

An investigation may result in one of the following situation:

  • the closure of the file, where it is concluded that the price was within the Guidelines;
  • a Voluntary Compliance Undertaking (VCU) by the manufacturer to reduce the price and take other measures to comply with the Guidelines; or
  • a public hearing to determine if the price is excessive and, if so, the issuance of a remedial order by the Board.

Does the PMPRB have any kind of power or authority to reduce prices?

If, after a public hearing, the Board finds that a price is excessive, it may order the patentee to reduce the price and take measures to offset any excess revenues it may have received. Those excess revenues are transferred in the federal government Consolidated Revenue Fund.

What happens to the excess revenues?

Under the Patent Act, the Minister of Health can make arrangements with his provincial counterparts to distribute the money. The PMPRB has no authority with respect to the distribution of funds collected under a VCU or Board Order.

Can the PMPRB delay the sale of a drug in Canada?

The PMPRB does not have the authority to delay the sale of a drug. The PMPRB's review of the price of a given drug is not required before a patented medicine is sold in Canada.

The PMPRB does not have the authority to prevent the sale of a patented medicine based on its price nor to remove it from the market.

If the PMPRB finds that the price is outside the Guidelines, it can eventually order a price reduction.

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