Newsletter April 2006
Volume 10, Issue No. 2
Table Of Contents
- Since our last issue…
- Comings and Goings
- News from the Vice-Chairperson – 2006 Public Consultations on the Board’s Excessive Price Guidelines
- Of Particular Interest to Patentees
- CPI-Adjustment Factors for 2007
- Notices of Hearing issued since the January 2006 NEWSletter
- NPDUIS- General Update
- Monitoring and Reporting on Non-Patented Prescription Drug Prices
- List of New Drugs introduced since the publication of the January 2006 NEWSletter
- Report on New Patented Drug – Zelnorm
- Patented Medicine Prices Review Board – February 22, 2006 Meeting
- Upcoming Events
Here are some of the key events that occurred since the end of January 2006.
- February 9-10: Anthony Boardman, Barbara Ouellet and Paul De Civita attended the Centre for Health Services and Policy Research – 18th Annual Health Policy Conference, Towards a National Pharmaceuticals Strategy – Lessons from Abroad, in Vancouver.
- February 15: Human Drug Advisory Panel (HDAP) held it´s first meeting of the year in Ottawa.
- February 20: Barbara Ouellet gave a presentation at the Drug Safety Summit 2006 – Examining the Flip Side of Drug Safety – Affordability, in Toronto.
- February 22: The Board held its first meeting of the new year. A summary of the Minutes is available on page 9.
- March 8: Dr. Benoit and Barbara Ouellet met with the Honourable Tony Clement, Minister of Health.
- March 8-April 24: The Board held a pre-hearing conference in the matter of Shire BioChem Inc. and the price of the medicine Adderall XR. The hearing in this matter commenced on April 24. More information on Board hearings is available on our Web site.
- March 28: Barbara Ouellet, Paul De Civita and Sylvie Dupont participated to the OECD Project Team meeting, Pharmaceutical Pricing Policies and Innovation, in Ottawa.
March 30: Barbara Ouellet delivered the Keynote Address – Pharmaceutical Pricing Environment and Regulation, at the North American Pharma Summit, in Toronto.
- April 3-4: Catherine Lombardo, Compliance Manager, and Marcin Szumski and Maria Gutschi, Scientific Officers, attended the CCOHTA Symposium, From Evidence to Policy to Practice – Addressing the Challenge of Integrating, in Ottawa.
- April 4: Barbara Ouellet, Paul De Civita and Sylvie Dupont met with representatives of the U.S. Embassy.
- April 21: The Board held a pre-hearing conference in the matter of Janssen-Ortho Inc. and the price of the medicine Risperdal Consta. More information is available on page 5.
- Ms. Ria Mykoo has accepted a specified period appointment as Legal Counsel with the PMPRB.
- Andrew MacDonald has accepted an indeterminate position with the PMPRB.
- We bid farewell to Monica Aziz, Economic Analyst with the Policy and Economics Analysis Branch, as she has joined Health Canada. Best wishes for success from all of us!
News from the Vice-Chairperson
About a year ago, the Board embarked on a public consultation with the release of its Discussion Paper on Drug Price Increases for Patented Medicines. Of interest to a wide range of our stakeholders, several complex issues were raised, including the appropriateness and relevance of the Board´s current Excessive Price Guidelines (Guidelines).
Following a more in-depth analysis of our stakeholders´comments, subsequent discussions with key groups, and the current state of pharmaceutical pricing in Canada, we are of the opinion that a more comprehensive review of the Guidelines as they pertain to introductory prices is in order.
The Guidelines stem from the Board´s Compliance Policy. The Policy was established by the PMPRB to provide maximum effectiveness in achieving the public policy objectives set out by Parliament, which was to ensure that prices of patented medicines were not excessive, thereby protecting consumers and contributing to Canadian healthcare. The Guidelines were issued in 1988 to facilitate voluntary compliance and reduce uncertainty for patentees. Developed by the Board in consultation with stakeholders, they outline the approach Board Staff uses to determine whether the price of a patented medicine is excessive. The Guidelines were last revised in 1994.
Dr. Brien G. Benoit,
Vice-Chairperson of the PMPRB
We wish to engage our stakeholders in face-to-face dialogues to better understand the issues with the current Guidelines and to explore potential options for change. Consultation events are planned for five Canadian cities in November 2006. To give focus to the dialogue at the meetings, a discussion guide is under development. This guide will be sent to invited participants in May, and made available on our Web site, for written submissions by late August. Outcomes from these consultations and submissions will be used to formulate options as to whether, and how, certain elements of the Guidelines should be revised.
We want to build on the past consultations, and elicit discussion on the appropriateness of the current categorization of new patented medicines and the introductory price tests, as well as on the significance of price variations across different markets in Canada.
We will continue to provide further details on the progress of this consultation initiative in the next issues of the NEWSletter.
Brien G. Benoit
Consultation on Guidelines – Timetable
|Release of the Discussion Guide
|Written Submissions Due
Under the Patent Act, if the Chairperson is absent or incapacitated, or if the office of Chairperson is vacant, the Vice-Chairperson has all the powers and functions of the Chairperson during the absence, incapacity or vacancy.
Filing Requirements – Timeliness of Filing
In previous issues of the NEWSletter, we published articles on the obligations of patentees to comply with the reporting requirements under the Patent Act (Act) and the Patented Medicines Regulations, 1994 (Regulations).
In terms of the Form 2 information consisting of the price and sales data for the medicine(s) sold, the information for the July to December 2005 reporting period was due on January 30, 2006.
Although ordinarily most patentees ultimately comply with the filing requirements, there is an issue regarding a number of patentees´ failure to file complete information within the time frames as specified in the Regulations.
As of January 31, 2006, 36% of reporting patentees had not filed their semi-annual report on price and sales information as specified by the Regulations.
Late and incomplete filing by patentees is an important issue as it may delay the price review and it requires time consuming follow-up requests for the information by Board Staff. It is a patentee´s responsibility to ensure that its complete information is filed within the statutory time frame.
As reported in our April 2005 NEWSletter, we have changed our practice regarding patentees who are in failure to file the Form 2 and Form 3 information.
Patentees who had failed to file the required information would be advised in writing and provided a further opportunity to provide the information. Where the information was not provided within the further period, Board Staff would request that the Board issue an order requiring the patentee to file the specified information. (See page 4 for article on Board Orders.)
Starting with the regulatory filing period January to June 2006, the failure to file procedure will further change for patentees who completely fail to file any of the Form 2 (Block 4) information or any of the Form 2 (Block 5) information. In 2007, this change will also apply to a complete failure to file Form 3 information by March 31. These patentees will no longer be provided a further opportunity to provide the required information; instead Board Staff will immediately request that the Board issue an Order requiring the patentee to file the specified information.
The procedure for other cases of failure to file partial information will remain unchanged. Patentees will be advised in writing and provided a further opportunity to provide the information. Where the information is not forthcoming within the further period, Board Staff will request that the Board issue an Order requiring the patentee to file the specified information.
Form 2: Information on the Identity and Prices of the Medicine
Block 4: Sales of the medicine by the patentee or former patentee in final dosage form in Canada
Block 5: Ex-factory prices for Canada and other countries
Form 3: Revenues and Research and Development Expenditures Provided Pursuant to SubSection 88(1) of the Patent Act
Form 1: Medicine Identification Sheet
Form 1 – When does it need to be filed?
When is it necessary to file an amendment?
The Patented Medicines Regulations, 1994 (Regulations) set out many of the obligations of patentees in terms of filing requirements.
Subsection 3(1) of the Regulations sets out the information that a patentee is required to file regarding the identity of the medicine. Form 1, which is included in the Patentees´ Guide to Reporting, is the form that patentees are to use to file information on the identity of the medicine. The information required includes the generic name and brand name of the medicine, the date on which the Notice of Compliance (NOC) was issued (if any), the Drug Information Number (DIN), the patent number of each invention pertaining to the medicine, and the name and address of the patentee.
Subsection 3(3) provides that the Form 1 shall be provided the earlier of:
- 30 days after the date on which the first NOC is issued in respect of the medicine, and
- 30 days after the date on which the medicine is first offered for sale in Canada.
Subsection 3(4) provides that the Form 1 information shall be up-to-date and any modification of that information shall be reported within 30 days after the modification.
Patentees are reminded of their obligation to file the Form 1 in a timely manner.
Patentees who fail to file the Form 1 will be advised in writing and provided a further opportunity to provide the information. Where the information is not provided within the further period, Board Staff will request that the Board issue an Order requiring the patentee to file the specified information.
Amendment to Form 1
Patentees are also reminded that they are required to file an amended Form 1 when there are any changes to the information that is required to be filed regarding the identity of the medicine, such as change of name of patentee, change of address or issuance of a new patent which pertains to the medicine.
Failure to File – Board Orders
The Board issued two Board Orders to patentees who failed to file pricing and sales information for the July to December 2005 period. Novartis Consumer Health Canada Inc. and Gilead Sciences Inc. had failed to provide information as required pursuant to subsection 80(1) of the Patent Act (Act), and subsections 4(1), (2) and (3) of the Patented Medicines Regulations, 1994. Abbott Laboratories Limited failed to file its R&D data for the year 2005, as prescribed under subsection 88 (1) of the Act, by March 1, 2006, but no Order was issued as the company filed the required information within the further time period provided in Board Staff´s letter.
The Board is pleased to report that all three patentees ultimately met their obligations and filed their regulatory data.
As mentioned previously in the NEWSletter, it is a patentee´s statutory responsibility to ensure complete information is filed within the statutory time frame.
Patentees are required to file price and sales data for their medicine(s) sold (Form 2) for the January to June 2006 period by July 31, 2006.
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 (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 period.
The CPI-adjustment factors for 2007 are as follows:
2007 CPI-Adjustment Factors for All Patented Drug Products
|2007 Forecast CPI
|2007 CPI-Adjustment Factor
The Base CPI is the average of the monthly CPI figures, as published by Statistics Canada, for the benchmark year.
The 2007 Forecast CPI is 132.75 (1992=100) and is based on the actual CPI figures for 2005 (127.34), as published by Statistics Canada, and the latest available inflation projections (2.3% for 2006 and 1.9% for 2007) from the federal Department of Finance.
Calculations: Latest actual available
(Dec. 2005) = 127.34
Forecast for 2006 = 127.34 x 1.023 = 130.27
Forecast for 2007 = 130.27 x 1.019 = 132.75
Cap for 2007 = 1.5 x 1.9% = 2.9%
Risperdal Consta, Janssen-Ortho Inc.
The Board will hold a public hearing, commencing on June 7, 2006, in the matter of Janssen-Ortho Inc. (Janssen-Ortho) and the price of the medicine Risperdal Consta. A pre-hearing conference was held on April 21, 2006.
The purpose of this hearing is to determine whether, under sections 83 and 85 of the Patent Act, Janssen-Ortho is selling or has sold the medicine known as Risperdal Consta in any market in Canada at a price that, in the Board´s opinion, is or was excessive; and, if so, what Order, if any, should be made.
The Board will hold a public hearing in the matter of 3M Canada Company (3M Canada), and the price of the medicine Airomir to start on July 10, 2006. A pre-hearing conference is scheduled for May 19, 2006.
The purpose of this hearing is to determine whether, under sections 83 and 85 of the Patent Act, 3M Canada is selling or has sold Airomir in any market in Canada at a price that, in the Board´s opinion, is or was excessive; and, if so, what Order, if any, should be made.
The PMPRB´s regulatory mandate is to protect consumer interests by ensuring that manufacturers´ prices of patented medicines are not excessive. In the event that the price of a patented medicine appears to be excessive, the Board can hold a public hearing and, if it finds that the price is excessive, it may issue an Order to reduce the price and to offset the excess revenues.
Risperdal Consta is a new formulation of an existing compound (risperidone) indicated for the management of the manifestations of schizophrenia and related psychotic disorders.
Airomir is used for the treatment of asthma, chronic bronchitis, and other breathing disorders.
All requests for information should be addressed to the Secretary of the Board:
Secretary of the Patented Medicine Prices Review Board
Standard Life Centre, 333 Laurier Avenue West, Suite 1400, Ottawa ON K1P 1C1
Toll-free number: 1-877-861-2350 Direct line: (613) 954-8299
Fax: (613) 952-7626 E-mail: firstname.lastname@example.org
NPDUIS – Update
The PMPRB has undertaken a number of projects under the National Prescription Drug Utilization Information System (NPDUIS). Following is a status update on each of the projects currently in progress.
The Pharmaceutical Trends Overview Report, 1997-1998 to 2003-2004 is approved for publication. The report will soon be available on the PMPRB Web site. Key findings of the report are provided below.
Phase one of the Program Expenditure Forecasting Methodology is near completion and currently in the approval process. While phase one focused on a macro-level methodology to forecast expenditures of publicly funded drug plans, phase two will develop a pharmaceutical sectorspecific methodology.
The following two NPDUIS projects are in progress:
- Budget Impact Analysis Guidelines Development
- New Drug Pipeline Monitoring
For these two projects, the PMPRB has put contracts in place to engage experts in the field to complement capabilities internal to the PMPRB.
Pharmaceutical Trends Overview Report, 1997-1998 to 2003-2004
Public drug plan members of the NPDUIS Steering Committee identified the need for research regarding public drug plan pricing, utilization and overall expenditures. In response, the PMPRB has produced the Pharmaceutical Trends Overview Report (PTOR) that will be produced on an annual basis with updated data.
The PTOR was based on aggregate DIN level data from six provinces (Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia) and the Pharmacy Program of Non-Insured Health Benefits, Health Canada.
Increases in public drug expenditures are largely due to increase in utilization – not price. As well, a higher portion of drug expenditures is spent on brand name drugs which are for the most part, growing at a faster rate than generic drug expenditures.
When drug expenditures are examined by therapeutic group, the top therapeutic groups that consistently contribute to the increase in drug expenditures in all jurisdictions included the following:
- Drugs for acid-related disorders, i.e., proton pump inhibitors
- Serum lipid reducing agents, i.e., “statin” group of drugs
- Psychoanaleptics, i.e., antidepressants and anti-dementia drugs
- Agents acting on the renin-angiotensin system, i.e., ACE inhibitors.
Drug expenditures within a therapeutic group are also affected by a “shifting” of utilization amongst individual drugs. Depending on the therapeutic group, there can be a shift toward higher priced individual drugs or vice versa.
PMPRB Annual Report for the year 2005
We will be submitting our 2005 Annual Report to the Minister of Health on May 31, 2006 with a view to having it tabled before Parliament in June.
Readers will be informed of its publication via our Web site under What´s New @ PMPRB. Highlights will also be published in our July NEWSletter.
We invite readers to peruse our 2005 Annual Report and send us their comments and/or questions.
To address the challenges to Canada´s health care system arising from pharmaceuticals, in September 2004, First Ministers committed to the development and implementation of a National Pharmaceuticals Strategy (NPS) as part of an overall 10-year plan to strengthen health care.
In establishing the NPS, the First Ministers agreed that “no Canadian should suffer undue financial hardship in accessing needed drug therapies” and that “affordable access to drugs is fundamental to equitable health outcomes for all our citizens”. An important element of the NPS involves achieving international parity on the prices of non-patented drugs.
In November 2005, the PMPRB received direction from the federal Minister of Health, on behalf of himself and his provincial/territorial colleagues, to monitor and report on the prices of non-patented prescription drugs. In the context of this function, the PMPRB will publish quarterly reports according to the Terms of Reference agreed to by federal/provincial/territorial governments.
The Terms of Reference, Outline of Methodology and Table of Contents for the Spring report have been finalized and are available on our Web site. Also, we have received the IMS Health MIDAS dataset, which will be the primary data source used for the reports.
We intend to maintain transparency throughout the process, including providing opportunities for the pharmaceutical industry, governments and stakeholders to review and provide input into the work. For example, in follow-up to earlier meetings in December 2005 and March 2006 with the F/P/T NPS co-chairs, the PMPRB met with representatives of Rx&D in March and of the Canadian Generic Pharmaceutical Association (CGPA) in April. Also, expert reviewers have been and will be engaged at selected steps in the process.
Data programming and other preparatory work for the first quarterly report is underway. Statistical analysis and text composition will follow. The first report is scheduled for publication in late spring of 2006.
The recently added responsibilities of monitoring and reporting on Non-Patented Prescription Drug Prices have not changed our reporting mandate but enhanced it.
Twelve new DINs for human use (representing ten medicines) were added to the list of New Patented Medicines reported to the PMPRB for the period ending March 2006. Of the ten new medicines, only one is a new active substance, representing one DIN.
The following table presents the one new active substance reported to the PMPRB during the period January to March 2006.
As of March 31, 2006
|Vaniqa 150 mg/g
||Barrier Therapeutics Canada Inc.
Brand Name: Zelnorm
Generic Name: (tegaserod hydrogen maleate)
DIN: 02245566 6 mg tablet
Patentee: Novartis Pharma Canada Inc.
Indication - as per product monograph: For the symptomatic treatment of irritable bowel syndrome with constipation (IBS-C) in female patients whose main symptoms are constipation and abdominal pain and/or discomfort.
Notice of Compliance: March 12, 2002
Date of First Sale: June 4, 2002
Date of Issuance of First Patent(s) Pertaining to the Medicine: March 15, 2005
ATC Class: A03AE02
Alimentary Tract and Metabolism, Drugs for Functional Gastrointestinal Disorders, Drugs for Functional Bowel Disorders, Drugs Acting on Serotonin Receptors
Application of the Guidelines
The introductory price of Zelnorm was found to be within the Guidelines because the price in Canada did not exceed the median of the prices of the same drug in those countries listed in the Patented Medicines Regulations (Regulations) in which it was sold.
The PMPRB's Human Drug Advisory Panel (HDAP) recommended that Zelnorm be reviewed as a category 3 new medicine (provides moderate, little or no therapeutic advantage over comparable medicines).
The Therapeutic Class Comparison (TCC) test of the Guidelines provides that the price of a category 3 new drug product cannot exceed the prices of other drugs that treat the same disease or condition. Comparators are generally selected from among existing drug products in the same 4th level of the Anatomical Therapeutic Chemical (ATC) System that are clinically equivalent in addressing the approved indication. See the PMPRB's Compendium of Guidelines, Policies and Procedures for a more complete description of the Guidelines and the policies on TCCs.
The HDAP identified Dicetel (pinaverium bromide), Modulon (trimebutine maleate), Levsin (hyoscyamine sulfate) and Bentylol (dicyclomine HCl) as appropriate comparators as they treat a variety of symptoms related to irritable bowel syndrome with constipation. However, as these agents are dosed on an as needed (prn) basis versus the daily compulsory dosing of Zelnorm, the HDAP could not identify a comparable dosage regimen.
Under the Guidelines, the introductory price of a new category 3 drug product will be presumed to be excessive if it exceeds the prices of all of the comparable drug products in the TCC test, or if it exceeds the prices of the same medicine in the seven countries listed in the Regulations. The Guidelines further state that when it is inappropriate or impossible to conduct a TCC test, Board Staff will give primary weight to the median of the international prices identified in an International Price Comparison (IPC) test. See the PMPRB's Compendium of Guidelines, Policies and Procedures for a more complete description of the Guidelines.
As the HDAP did not recommend a comparable dosage regimen in this case, in accordance with the Guidelines, primary weight was given to the median of the international prices.
Introductory period (July to December 2002)
||Price per tablet (CDN$)
Canada: PPS July 2002
Switzerland: Medwin Web site, December 2002
United States: Federal Supply Schedule (FSS), December 2002
The Guidelines provide that when a medicine is sold in fewer than five countries at the time of its introduction, the introductory price will be treated as the interim benchmark price. The interim benchmark price may be reviewed at the end of three years or when the medicine is sold in at least five countries, whichever comes first. At introduction, Zelnorm was sold in two countries. Zelnorm continued to be sold in two countries at the end of three years and the price continued to be within the Guidelines.
Where comparators and dosage regimens are referred to in the Summary Reports, they have been selected by the PMPRB Staff and the HDAP for the purpose of carrying out the PMPRB´s regulatory mandate, which is to review the prices of patented medicines sold in Canada to ensure that such prices are not excessive. The publication of these reports is also part of the PMPRB´s commitment to make its price review process more transparent.
The information contained in the PMPRB´s Summary Reports should not be relied upon for any purpose other than its stated purpose and is not to be interpreted as an endorsement, recommendation or approval of any drug nor is it intended to be relied upon as a substitute for seeking appropriate advice from a qualified health care practitioner.
At its meeting, the Board
- was briefed on ongoing initiatives:
- National Pharmaceuticals Strategy (PMPRB is an observer);
- Monitoring and Reporting on Non-Patented Prescription Drug Prices under NPS; and
- approved the next steps for the upcoming consultations on the Board´s Excessive Price Guidelines (Guidelines).
The next Board meeting is scheduled for May 17 -18, 2006. For additional information, please contact the Secretary of the Board at: 1-877-861-2350, or (613) 954-8299, or at email@example.com.
- May 4
McGill University Health Care – 37th Annual Course in Drug Therapy, Montréal
- May 11-12
Meeting of the Advisory Committee on Pharmaceuticals
- May 16
Pharmacy Outcomes Conference, Montréal
- May 17-18
Board Meeting, Ottawa
- May 18
Pharmacy Outcome Conference, Mississauga
- May 19
Pre-hearing Conference – 3M Canada Company and the medicine Airomir, Ottawa
- May 23
Release of Discussion Guide on the Board´s Excessive Price Guidelines
- May 29
- June 7-9 & 27-28
Public Hearing - Janssen-Ortho Inc. and the medicine Risperdal Consta, Ottawa
- June 11-13
Canadian Council of Administrative Tribunals, Ottawa
- July 10-14
Public Hearing - 3M Canada Company and the medicine Airomir, Ottawa
- August 21
- August 25
Deadline for submissions on Discussion Guide
- September 20-21
Board Meeting, Ottawa
- November 20
- December 13-14
Board Meeting, Ottawa