CPI-Adjustment Factors for 2009

The Patent Act specifies the factors to be used by the PMPRB in determining whether the price of a patented drug product sold in Canada is excessive. One of these factors is the Consumer Price Index (CPI). The Excessive Price Guidelines limit price increases to changes in the CPI over a three-year period.

To allow patentees to set prices in advance, the Board´s CPI-Adjustment Methodology provides for the calculation of the CPI-Adjustment factors based on forecast changes in the CPI. The Board informs patentees on an annual basis of the CPI-adjustment factors for future pricing periods.

The CPI-adjustment factors for 2009 are as follows:

The Base CPI is the average of the monthly CPI figures, as published by Statistics Canada, for the benchmark year.

The 2009 Forecast CPI is 138.30 and is based on the actual CPI figures for 2007 (132.67), as published by Statistics Canada and the latest available inflation projections (2.2% for 2008 and 2.0% for 2009) from the federal Department of Finance.

Table 1

Calculations: Latest actual available Base-CPI (DEC 2007) = 132.67

Forecast CPI for 2008 = 132.67 x 1.022 = 135.59

Forecast CPI for 2009 = 135.59 x 1.020 = 138.30

Cap for 2009 = 1.5 x 2.0% = 3.0%