CPI-Adjustment Factors Based on Inflation Forecasts

The Patent Act (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 PMPRB's CPI-Adjustment Methodology provides for the calculation of the CPI-Adjustment factors based on forecast changes in the CPI. The PMPRB informs patentees on an annual basis of the CPI-adjustment factors for the future pricing period.

The CPI-adjustment factors for 2008 are as follows:

CPI-Adjustment Factors for All Patented Drug Products
(CPI 1992 = 100)

Benchmark Year
(1) 2005 (2) 2006 (3) 2007
Base-CPI 127.34 129.90 NA
2008 Forecast CPI 134.62 134.62 134.62
2008 CPI-Adjustment Factor 1.057 1.036 1.020

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

The 2008 Forecast CPI (134.62) is based on the actual CPI figures for 2006 (129.90), as published by Statistics Canada, and the latest available inflation projections (1.6% for 2007 and 2.0% for 2008) from the federal Department of Finance.


Forecast for 2007 = 129.90 X 1.016 = 131.98
Forecast for 2008 = 131.98 X 1.02 = 134.62

Cap for 2008 = 3.0% (1.5 x 2.0%)

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