The Patented Medicine Prices Review Board Procurity Conference

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The Patented Medicine Prices Review
BoardProcurity Conference

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• Barbara Ouellet, Executive Director
• PMPRB
• November 26, 2008
• Scottsdale, Arizona

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Overview

• The PMPRB
• Mandate
• Stakeholders
• Regulatory Mandate and the Excessive Price
  Guidelines
• Reporting Mandate

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The PMPRB

• Arms-length agency in the Federal Health
  Portfolio
• No involvement in Federal policy-making
• Created in 1987 as consumer protection pillar
  of drug patent law reform
• Quasi-judicial tribunal
• Remedial orders provided for in the Patent Act
  carry the force of the Federal Court
• Structure and Budget
• 5 part-time Board members
• Governor-in-Council Appointees
• Selected based on area of expertise, regional
  representation, official language proficiency
• 62 employees
• Budget 11.5 million

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Mandate of the PMPRB

• Regulatory To ensure that prices charged by
  manufacturers for patented medicines are not
  excessive, thereby protecting consumers and
  contribute to Canadian health care
• Reporting To report on pharmaceutical trends
  and on the RD spending by pharmaceutical
  patentees, thereby contributing to informed
  decisions and policy making

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Stakeholders

• Provincial and Territorial Ministers of Health
• Consumers
• Consumers Association of Canada
• Seniors groups
• Pharmaceutical industry
• RxD Canadas Research Based Pharmaceutical
  Companies
• BIOTECanada
• CGPA Canadian Generic Pharmaceutical
  Association
• Health associations
• Canadian Pharmacists Association
• Canadian Society of Hospital Pharmacists
• Canadian Health Coalition
• Canadian Healthcare Association
• Disease groups patient advocacy groups

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• Regulatory Mandate

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Parameters

• The PMPRB ensures introductory prices, and price
  increases, for patented drugs sold in Canada not
  excessive
• Does not set prices for patented drug products
• FPT drug plans negotiate actual formulary listing
  prices
• Price does not need PMPRB approval before
  patented drug is sold in Canada
• But, patentee encouraged to seek advisory
  assistance on price compliance with Excessive
  Price Guidelines (Guidelines) prior to first
  sale, and prior to any price increase

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• Excessive Price Guidelines

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Conducting the Scientific Review

• Purpose To determine
• the primary indication/use of the new medicine,
  and dosage regime
• the category into which it fits
• whether there are any therapeutically comparable
  medicines, and their respective comparable dosage
  regimes

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Categorization

• Category 1
• Line extension comparable dosage form of an
  existing medicine
• Category 2
• First drug product available in Canada that
  treats effectively a particular illness or
  addresses effectively a particular indication
  (breakthrough) OR
• Substantial improvement in therapeutic effect
  (such as increased efficiency or major reductions
  in dangerous adverse reactions) or significant
  savings to the Canadian health care system
• Category 3
• Non-comparable dosage form of an existing
  medicine or new chemical entity - Moderate,
  little or no therapeutic advantage over existing
  medicines

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Different Introductory Price Tests for each
Category

• Category 1 Drug Products
• Reasonable Relationship Test (RR) compares
  price of new drug to prices of existing drugs
  with comparable dosage forms
• Category 2 Drug Products - Higher of
• Therapeutic Class Comparison (TCC) test up to
  highest price of therapeutic comparators or
• International Price Comparison (IPC) test up to
  median of prices of the new drug in the seven
  comparator countries (France, Germany, Italy,
  Sweden, Switzerland, U.K., U.S.)
• Category 3 Drug products
• Therapeutic Class Comparison (TCC)
• A drug may be excluded if its price considered
  excessive
• For all products Canadian price cannot be the
  highest in the world

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Existing Drugs (not new to the market)

• Consumer Price Increase (CPI) adjustment
  methodology
• Lower of
• Price three years ago adjusted for cumulative
  change in the CPI or
• One year cap equal to 1.5 times the forecast
  change in the annual CPI
• Again, Canadian price can never be the highest
  among comparator countries
• Even if allowed by CPI methodology
• In periods of high inflation (over 10), limit
  is 5 more than the forecast change in CPI

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Possible Outcomes of Investigations

• Price not excessive and investigation closed
• Price excessive under the Guidelines
• Patentee given opportunity to provide a Voluntary
  Compliance Undertaken (VCU) (i.e., to comply with
  the MNE and agree to repay excess revenues)
• Requires approval of Board Chairperson
• OR
• Board Staff refers the matter to the Chairperson
• Decides whether it is in the public interest to
  issue a Notice of Hearing
• Note Even if hearing called, Board Staff still
  available to negotiate VCU on a parallel track
  with the Hearing process

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Review of the Boards Excessive Price Guidelines

• Consultations with stakeholders over the last 3
  years
• Key changes in draft revised Guidelines issued on
  August 20, 2008
• 4 new categories of therapeutic improvement
  (breakthrough substantial improvement moderate
  improvement slight or no improvement)
• Revised price tests to correspond to 4 v 3
  categories
•  Any market  reviews
• Deviation from CPI limit if price increase is due
  to end of a benefit

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Enforcement Activities

• 10 Voluntary Compliance Undertakings since 2006
• Airomir AndroGel Denavir Dovobet (following
  the September 2007 Board Order) Forteo Lantus
  OctreoScan Risperdal Consta) Vaniqa Zemplar
• Combination of price reductions and reimbursement
  of excessive revenues totalling over 10M
• Since 1993, 49 VCUs have been approved
• Price reduction price reduction of other
  patented medicines payments of excess revenues
  totalling 37M
• VCU concluded proceedings initiated in 2006

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Hearings

• 15 Notices of Hearing issued since 2006
• 7 completed Adderall XR Airomir Copaxone
  Dovobet Risperdal Consta Thalomid Zemplar
• 9 hearings ongoing Apotex (failure to file)
  Apo-Salvent Concerta (decision pending)
  Nicoderm (initiated in 1999) Penlac (resumes
  December 8) Quadracel-Pentacel (resumes November
  25) ratiopharm Inc. (failure to file)
  ratio-Salbutamol Strattera (resumes January 27,
  2009)
• Hearings terminated as a result of a voluntary
  compliance undertaking (VCU)

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• Reporting Mandate

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Highlights 2007

• Sales of patented drugs up 3 to 12.3 billion
• 64 new drugs (or DINs)
• 20 NASs (34 DINs)
• 9 VCUs approved 3 Notices of Hearing issued (2
  in 2007
• 1, to date, in 2008)
• PMPI decreased by 0.1 mainly attributable to
  hospitals
• Canadian prices at 1.01 of the MIP
• RD-to-sales ratio up to 8.3 (all patentees) and
  8.9
• (RxD members)

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Utilization of Patented Drugs

• Utilization of patented drugs grew by 3.5, the
  smallest rate of growth since 1994
• The primary drivers of the overall utilization
  growth include drugs related to
• Antineoplastics and immunomodulating agents
• Respiratory system
• They accounted for 2/3rd of the overall
  utilization growth in the PMQI

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RD Expenditure in 2007

• Patentees reported total RD expenditures of
  1.32 B in 2007, an increase of 9.5 from 2006
• The RD-to-sales ratio increased
• All patentees 8.3 - up from 8.1 in 2006
• RxD members 8.9 from 8.5

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National Prescription Drug Utilization
Information System (NPDUIS)

• Pursuant to section 90 of the Patent Act
• In partnership with the Canadian Institute for
  Health Information (data custodian and some
  analyses)
• Responsive to priorities of F/P/T drug plans
  (Steering Committee)
• Recent publications to-date
• Guidelines for conducting pharmaceutical budget
  impact analyses
• New Drug Pipeline
• Pharmaceutical Trends Overview

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• pmprb_at_pmprb-cepmb.gc.ca