PMPRB Notice and Comment April 2012

Proposed Changes to the Compendium of Policies, Guidelines and Procedures - for Comment by May 14, 2012

Introduction and Commitment to a Regulatory Framework that is Relevant, Responsive and Appropriate

The PMRPB implemented its revised Compendium of Policies, Guidelines and Procedures (the Guidelines) on January 1, 2010, following an extensive policy review and consultation with stakeholders. As part of the Board's ongoing commitment that its framework continue to have a positive impact for consumers, while recognizing the value that innovative medicines offer to patients, the Board has enhanced its engagement policy with all stakeholders. It is the Board's intention that:

• the Guidelines be responsive, in an appropriate timeframe, to changes in the environment it regulates;
• the regulatory burden be reduced, where possible; and,
• the PMPRB continue to use its limited resources efficiently.

The January 2011 NEWSletter identified sections within the Guidelines that would either not be implemented or would be further assessed by Board Staff. As part of the Board's commitment to adjust and amend the Guidelines, as required, the Board seeks stakeholder comments on the proposed changes to sections below:

Issue #1: Thresholds for Opening an Investigation

Proposal: For existing drug products, eliminate the 5% investigation trigger at the national level.

Board Position: The criterion to commence an investigation for existing drug products when the National Average Transaction Price (N-ATP) exceeds the Non-Excessive Average Price (NEAP) by 5% will trigger a large number of investigations where cumulative excess revenues are less than $50,000. In 2010, for example, application of this criterion would have triggered 46 investigations, of which there were 21 cases where cumulative excess revenues were less than $25,000. The Board believes that in order to avoid a large number of investigations involving amounts of excess revenue less than the de minimus amount of $50,000, a more efficient use of Board resources is to investigate these drug products when excess revenues eventually trigger the criterion of cumulative excess revenues greater than $50,000.

Issue #2: Offset de minimus Excess Revenues

Proposal: Replace 3-year period to offset de minimus excess revenues through a Voluntary Compliance Undertaking (VCU) with requirement to offset in a timely manner.

Board Position: Investigations are not triggered or commenced for drug products that have a de minimus excess revenue balance. However, if there is no VCU agreed to by the patentee, then the available option currently is to proceed to a public hearing. In 2010, for example, there were 10 cases where de minimus excess revenues were carried for six consecutive six-month periods, for which no VCUs were submitted, where the average outstanding amount of potential excess revenues was approximately $10,500. The Board believes that a more efficient use of Board resources is to require patentees to offset excess revenues less than the de minimus amount in a timely manner, while providing transparency respecting potential accumulation of excess revenues by reporting these drugs as “does not trigger” an investigation (Note: compliance status is available on the Board's website and in the Board's annual report).

For a summary of changes to the Guidelines arising from these two policy decisions, please see Side-by-Side Comparison of Current and Proposed Text In the Compendium of Policies, Guidelines and Procedures