The Chairperson of the PMPRB accepted a VCU for the drug product One-Alpha (LEO Pharma)

VCU accepted on May 6, 2004

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

1 Product Summary

1.1 One-Alpha (alfacalcidol) is a patented medicine sold in Canada by Leo Pharma Inc. (Leo Pharma).

1.2 One-Alpha is indicated for the management of hypocalcemia, secondary hyperparathyroidism and osteodystrophy in patients with chronic renal failure. One-Alpha is classified in the WHO ATC index 2001 as a member of the 4th level ATC class A11CC-Vitamin D and Vitamin D Analogues. One-Alpha is supplied in intravenous form containing 0.002 mg/mL of alphacalcidol (DIN 02242502).

1.3 Canadian Patent 1,221,707 pertaining to One-Alpha was granted to Charles E. Frosst & Co., Canada on May 12, 1987 and will expire on May 12, 2004. Leo Pharma Inc. is the patentee for purposes of the Patented Medicine Prices Review Board (PMPRB).

1.4 Health Canada issued a Notice of Compliance for One-Alpha on July 31, 2000. Leo Pharma began selling One-Alpha on January 1, 2001.

2 Application of the Excessive Price Guidelines

2.1 Board Staff has conducted a review of the price of One-Alpha in accordance with the PMPRB's Excessive Price Guidelines. One-Alpha injectable was classified as a category 3 medicine as it represented a new dosage form of an existing medicine. Prior to the introduction of the parenteral formulation, One-Alpha was available in oral capsule and in drops. A Therapeutic Class Comparison (TCC) test was conducted by Board Staff using a sole comparator, Calcijex (Calcitriol).

2.2 By applying the PMPRB's Excessive Price Guidelines, Board Staff concluded that the price of One-Alpha of $15.0000 per ml exceeded the maximum non-excessive (MNE) price in 2001 of $12.5000 per ml by 20%. Although the price was lowered in 2002 and 2003, it continued to exceed the Excessive Price Guidelines by less than 5%. As a result, Board Staff has calculated that Leo Pharma received excess revenues of $23,049.10 during the period January 1, 2001 to December 31, 2003.

3 Terms of the Voluntary Compliance Undertaking

3.1 This Voluntary Compliance Undertaking (VCU) constitutes no admission by Leo Pharma that the price of One-Alpha is or was excessive for purposes of the Patent Act.

3.2 In order to comply with the Excessive Price Guidelines and policies of the PMPRB, Leo Pharma undertakes as follows:

3.2.1 To reduce the average selling price of One-Alpha within 30 days of acceptance of this VCU so that the average price for 2004 does not exceed the 2004 MNE price of $13.3750 per ml.

3.2.2 To offset excess revenues received by Leo Pharma during the period of January 1, 2001 to December 31, 2003 by making a payment to Her Majesty the Queen in right of Canada within 30 days of the acceptance of this undertaking in the amount of $23,049.10.

3.2.3 To ensure that the price of One-Alpha remains within the Guidelines in all future periods in which it remains under the Board's jurisdiction.

Leo Pharma Inc.

Signature: Dr. Ken Jones

Title: President and CEO

Date: April 22, 2004