Patented Medicine Prices Review Board Regulatory Affairs and
Patented Medicine Prices Review Board Regulatory Affairs and Outreach Branch Regular DIP Methodology – a refresher Ottawa, May 16, 2013
Overview § Preparing for a successful Regular DIP Application s s Benefits Block 5 Canadian price list § Invoking the Regular DIP Methodology s s Administrative forms Application-Related Issues and Solutions § Understanding what happens after successfully invoking the Regular DIP s 2 s CPI Methodology Dealing with future increases
Preparing for a successful DIP application 3
Benefits at Introduction Q: How to apply the DIP Methodology when benefits exist at introduction? A: Report customers with and without benefits as separate lines in the Form 2 Block 4 at introduction and as long as benefits are given. The ATP excluding the benefits will be used to calculate the IBP*. 4
Benefits at Introduction Example : customers with and without benefits within the same class 2010: Drug product X introduced to Canadian market on September 1 DIN 1234567; strength/unit 1 MG/TAB; dosage form S 1; pack size 10; 1000 packages sold only to hospitals, in Ontario Price to some hospitals: $20. 00/tablet Price to other hospitals: $15. 00/tablet (contract). MAPP is $20. 00$/tablet N-ATP is $17. 50/tablet H-ATP is $17. 50/tablet § 5 2012: Contract ends. Same quantities sold as in 2010 but price is now $20. 00 to all hospitals. N-ATP is now $20/tablet
Benefits at Introduction Form 2 Block 4 September-December 2010 N-ATP = $17. 50 ; H 1 -ATP (class without benefits) = $20. 00; H 2 -ATP (class with benefits) = $15. 00 Form 2 Block 4 January-June and July-December 2012 N-ATP = $20. 00; H 1 -ATP = $20. 00; H 2 -ATP = $20. 00 6 When invoking the Regular DIP Methodology, the H 1 ATP in 2010 (class without benefits) will be used to calculate the IBP* in 2012
Block 5 Canadian list price Are you selling above your list price? Patentees are reminded to ensure that the reported Block 5 and Block 4 data are accurate. An ATP cannot be higher than the list price. 7
Block 5 Canadian list price Block 5 prices as originally filed No more benefits in 2012 – investigation Regular DIP Methodology not successful; ATP>IBP* 2007 Form 2 Bl 5 Canada 8 2009 $20. 000 $20. 600 0 % Bl 5 increase 3. 0% % annual CPI 2. 4% 2010 $20. 600 0 2011 2012 $20. 600 $20. 900 0 0 1. 4% 0. 3% 1. 8% 2. 9% 1. 5% IBP/IBP* $20. 000 $20. 480 $20. 766 0 4 N-ATP $20. 000 $19. 000 $18. 000 0 $17. 000 $21. 000 0 0 MAPP/N-NEAP $20. 000 $20. 480 $19. 095 0 0 0 $18. 486 0 $17. 748 $17. 391 0 0
Block 5 Canadian list price Prices reported in Part B (copies of list prices provided) No more benefits in 2012 – investigation Regular DIP Methodology successful; ATP<IBP* 2007 Prices reported in Part B (and 2008 2009 2010 2011 2012 $20. 000 $20. 600 $20. 900 $21. 200 0 0 0 substantiated) 9 % Bl 5 increase 3. 0% % annual CPI 2. 4% 0. 3% 1. 8% 1. 5% 1. 4% 2. 9% 1. 5% IBP/IBP* $20. 000 $20. 480 $20. 787 $21. 078 0 0 2 2 N-ATP $20. 000 $19. 000 $18. 000 $17. 000 $21. 000 0 0 0 N-NEAP $20. 000 $20. 480 $19. 095 $18. 486 $17. 748 $17. 391 0 0 0
Invoking the Regular DIP Methodology 10
Application forms 11
Application forms 12
Application forms Part A: as described previously § Part B § 13
Regular DIP application § Patented drug product has been sold to various customers since April 1, 2007. Its price became under investigation in 2012. Patentee believes that Regular DIP Methodology can be applied. § Only one List Price $20. 00/tab in 2007, 2008 and 2009 $21. 00/tab in 2010, 2011 and 2012 14 § Price increase was effective as of April 1 st 2010 § Maximum selling price was list price
Regular DIP application PART A Drug product information, background and description of benefit to be provided as required in the Form PART B Price Increase Chart 2007 List Price (price/unit) 20. 00 2008 20. 00 2009 20. 00 Effective Date of List Price increase 21. 00 2011 2012 21. 00 5. 00% % List Price Increase Maximum Selling Price/Unit 2010 20. 00 21. 00 1 -Apr-10 Copies of the List Price to be provided for each year reported in the Price Increase Chart 15
Regular DIP application § Patented drug product has been sold to various customers since April 1, 2007. Its price became under investigation in 2012. Patentee believes that Regular DIP Methodology can be applied. § Two List Prices: Wholesaler $20. 00/tab in 2007, 2008 and 2009 $21. 00/tab in 2010, 2011 and 2012 Quebec $15. 00/tab in 2007, 2008 and 2009 $15. 60/tab in 2010, 2011 and 2012 16 § Price increases were effective as of April 1 st 2010 § Maximum selling price was list price:
Regular DIP application PART A Drug product information, background and description of benefit to be provided as required in the Form PART B Price Increase Chart 2007 List Price (price/unit) 20. 00 2008 20. 00 2009 20. 00 List Price (price/unit) 2007 15. 00 2008 15. 00 2009 15. 00 Effective Date of List Price increase 21. 00 2010 15. 60 2011 15. 60 15. 00 15. 60 1 -Apr-10 Copies of the List Price to be provided for each year reported in the Price Increase Chart 17 2012 4. 00% % List Price Increase Maximum Selling Price/Unit 2012 1 -Apr-10 Effective Date of List Price increase Quebec 21. 00 2011 5. 00% % List Price Increase Maximum Selling Price/Unit 2010
Regular DIP Methodology: Calculation of IBP* To calculate the IBP*, Board Staff applies the lower of the 1) CPI Methodology and 2) The Block 5 increases *Subject to the Highest International Price However there are two “Quick tips”. 18
Regular DIP Methodology: Calculation of IBP* Quick Tip 1: Block 5 Canada price increase vs. annual (one year) CPI Use lower of : § annual (one year) CPI and § % increase of Form 2 Block 5 Canada price 2007 Form 2 Bl 5 Canada $20. 000 $20. 600 0 0 % Bl 5 increase 3. 0% % annual CPI 2. 4% IBP/IBP* 19 2008 $20. 000 $20. 480 0 0
Regular DIP Methodology: Calculation of IBP* Quick Tip 2: No increase in Form 2 Block 5 Canada price for at least 3 years Use lower of: § Cap § % increase in Form 2 Block 5 2007 Form 2 Bl 5 Canada 2008 2009 $20. 000 0 2010 2011 $20. 000 0 $20. 000 $20. 500 0 0 % Bl 5 increase Cap IBP/IBP* 20 2012 2. 5% 3. 6% 0. 5% $20. 000 0 2. 7% 4. 4% 2. 3% $20. 000 0 $20. 000 $20. 460 0 0
Regular DIP Methodology: Calculation of IBP* When Form 2 Block 5 Canada price increases every year, CPI-Adjustment Methodology considered. 2007 Form 2 Bl 5 Canada 2009 $20. 000 $20. 561 0 0 5 2010 2011 2012 $20. 870 0 $21. 287 $21. 606 5 8 % Bl 5 increase 2. 5% 0. 3% 1. 8% 2. 0% 1. 5% % annual CPI 2. 4% 0. 3% 1. 8% 2. 9% 1. 5% % Cap 3. 6% 0. 5% 2. 7% 4. 4% 2. 3% % CPI Adj. Factor 2. 4% 2. 7% 4. 5% 5. 1% 6. 3% IBP/IBP* $20. 000 $20. 480 $20. 541 0 0 4 $20. 900 0 $21. 318 $21. 637 0 8 N-ATP $20. 000 $19. 500 $19. 000 0 $18. 500 0 $18. 000 $21. 500 0 0 2010 CPI 20. 0000 X 1. 045 = 20. 9000 $20. 480 $19. 597 $19. 513 $19. 314 $18. 414 CAP = 21. 09600 0 0 20. 54145 X 1. 027 0 0 % Bl 5 increase 20. 5414 X 1. 018 = 20. 9111 N-NEAP 21 2008
Regular DIP Methodology: Calculation of IBP* Block 5 Canada price decrease 2007 Form 2 Bl 5 Canada 2008 $20. 000 $19. 500 0 0 % Bl 5 increase % annual CPI IBP/IBP* 22 2. 4% $20. 000 $19. 500 0 0
DIN previously sold Q: In cases involving the acquisition of a patented drug product prior to January 1, 2010, what is the appropriate Introductory Benchmark Price (IBP) where a patentee acquires a DIN(s) that had been previously sold by another patentee? 23 A: The IBP for the product sold by the second patentee would be equal to the IBP for the product sold by the first patentee provided the second patentee receives this information from the first patentee.
Understanding what happens after successfully invoking the Regular DIP 24
What happens after successfully invoking the Regular DIP Methodology? A: Change the year in which the Regular DIP is applied to year 1 for the purposes of the CPI-Adjustment Methodology. YR 1 - DIP successfully applied and N-NEAP = NATP § Excess revenue = 0 YR 2 - N-NEAP = YR 1 N-NEAP/N-ATP + CPI methodology 25
Regular DIP Methodology Regular DIP applied in 2010 (Year 1) 2007 List Price Canada 26 $20. 00 00 2008 $20. 50 00 2009 2010 – 2011 – Yr. 1 Yr. 2 $20. 50 00 $20. 5000 1. 5% % list price increase 2. 5% % annual CPI 2. 4% 0. 3% 1. 8% Cap 3. 6% 0. 5% 2. 7% IBP/IBP* $20. 00 00 $20. 480 0 N-ATP $20. 00 00 $19. 00 00 $18. 00 00 $20. 050 0 N-NEAP $20. 00 00 $19. 45 60 $18. 48 60 $20. 050 0 $20. 4800 $20. 3508
Regular DIP Methodology: Scenario 1 – Year 2 N-ATP < Year 2 N-NEAP 2007 List Price Canada 27 $20. 00 00 2008 $20. 50 00 2009 2010 – 2011 – Yr. 1 Yr. 2 $20. 50 00 $20. 5000 1. 5% % list price increase 2. 5% % annual CPI 2. 4% 0. 3% 1. 8% Cap 3. 6% 0. 5% 2. 7% IBP/IBP* $20. 00 00 $20. 480 0 $20. 4800 N-ATP $20. 00 00 $19. 00 00 $18. 00 00 $20. 050 0 $20. 2500 N-NEAP $20. 00 00 $19. 45 60 $18. 48 60 $20. 050 0 $20. 3508
Regular DIP Methodology: Scenario 2 – Year 2 N-ATP > Year 2 N-NEAP, But < IBP* 2007 List Price Canada 28 $20. 00 00 2008 $20. 50 00 2009 2010 – 2011 – Yr. 1 Yr. 2 $20. 50 00 $20. 5000 1. 5% % list price increase 2. 5% % annual CPI 2. 4% 0. 3% 1. 8% Cap 3. 6% 0. 5% 2. 7% IBP/IBP* $20. 00 00 $20. 480 0 $20. 4800 N-ATP $20. 00 00 $19. 00 00 $18. 00 00 $20. 050 0 $20. 4500 N-NEAP $20. 00 00 $19. 45 60 $18. 48 60 $20. 050 0 $20. 3508
Regular DIP Methodology: Scenario 2 Post Regular DIP application in Year 2 Scenario 2 – Year 2 N-ATP > Year 2 N-NEAP, But < IBP* 2007 List Price Canada 29 $20. 00 00 2008 $20. 50 00 2009 2010 – 2011 – Yr. 1 $20. 50 00 $20. 5000 1. 5% % list price increase 2. 5% % annual CPI 2. 4% 0. 3% 1. 8% Cap 3. 6% 0. 5% 2. 7% IBP/IBP* $20. 00 00 $20. 480 0 $20. 4800 N-ATP $20. 00 00 $19. 00 00 $18. 00 00 $20. 050 0 $20. 4500 N-NEAP $20. 00 00 $19. 45 60 $18. 48 60 $20. 050 0 $20. 4500
Regular DIP Methodology: Scenario 3 – Year 2 N-ATP > N-NEAP, and > IBP* - no list price increase in Year 2 2007 List Price Canada 30 $20. 00 00 2008 $20. 50 00 2009 2010 – 2011 – Yr. 1 Yr. 2 $20. 50 00 $20. 5000 1. 5% % list price increase 2. 5% % annual CPI 2. 4% 0. 3% 1. 8% Cap 3. 6% 0. 5% 2. 7% IBP/IBP* $20. 00 00 $20. 480 0 $20. 4800 N-ATP $20. 00 00 $19. 00 00 $18. 00 00 $20. 050 0 $20. 7500 N-NEAP $20. 00 00 $19. 45 60 $18. 48 60 $20. 050 0 $20. 3508
Regular DIP Methodology: Scenario 4 – Year 2 N-ATP > N-NEAP and > IBP However - list price increase in Year 2 2007 List Price Canada 31 $20. 00 00 2008 $20. 50 00 2009 $20. 50 00 2010 – 2011 – Yr. 1 Yr. 2 $20. 500 0 $20. 8075 % list price increase 2. 5% % annual CPI 2. 4% 0. 3% 1. 8% 1. 5% Cap 3. 6% 0. 5% 2. 7% 2. 25% 1. 5% IBP/IBP* $20. 00 00 $20. 480 0 N-ATP $20. 00 00 $19. 00 00 $18. 00 00 $20. 050 0 $20. 7500 N-NEAP $20. 00 00 $19. 45 60 $18. 48 60 $20. 050 0 $20. 3508
Regular DIP Methodology: Scenario 4 – Year 2 N-ATP > N-NEAP and > IBP*, However - list price increase in Year 2 2007 List Price Canada 32 $20. 00 00 2008 $20. 50 00 2009 $20. 50 00 2010 – 2011 – Yr. 1 $20. 500 0 $20. 8075 % list price increase 2. 5% % annual CPI 2. 4% 0. 3% 1. 8% 1. 5% Cap 3. 6% 0. 5% 2. 7% 2. 25% 1. 5% IBP/IBP* $20. 00 00 $20. 480 0 $20. 7872 N-ATP $20. 00 00 $19. 00 00 $18. 00 00 $20. 050 0 $20. 7500 N-NEAP $20. 00 00 $19. 45 60 $18. 48 60 $20. 050 0 $20. 7500
Considerations and General Reminders § DIP has to be applied for – the forms must be filled out § Pay attention and consider changes to CPI § Product must be sold at list price – Block 4 sale § Pay attention to your Block 5 data and your MAPP at introduction § HIPC is always a factor § Your SRO (Senior Regulatory Officer assigned to your company) is always available for discussion on specific issues 33
QUESTIONS ? 34
- Slides: 34