CPI-Adjustment Factors for 2006

CPI-Adjustment Factors for 2006 The Patent Act specifies the factors to be considered by the PMPRB in determining whether the price of a patented drug product sold in Canada is excessive. One of these factors is changes in 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 next year's pricing period.

The CPI-adjustment factors for 2006 are as follows:

2006 CPI-Adjustment Factors for All Patented Drug Products (CPI 1992=100)

Benchmark Year
(1) 2003 (2) 2004 (3) 2005
Base-CPI 122.32 124.56 n/a
2006 Forecast CPI 129.47 129.47 129.47
2006 CPI-Adjustment Factor 1.058 1.039 1.020

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

The 2006 Forecast CPI is 129.47 (1992=100) and is based on the actual CPI figures for 2004 (124.56), as published by Statistics Canada, and the latest available inflation projections (1.9% for 2005 and 2.0% for 2006) from the federal Department of Finance.

Cap for 2006 = 3.0% (1.5 x 2.0).

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