Patented Medicines Prices Review Board PMPRB to Canadian
Patented Medicines Prices Review Board (PMPRB) to Canadian Association of Healthcare Reimbursement Healthcare and Biopharmaceuticals in Canada: Federal Perspective and Beyond Michelle Boudreau, Executive Director Ottawa Convention Centre September 25, 2012
Outline ____________________ § Market trends § Getting to know the PMPRB § How does it really work? § Concluding Remarks 2
Market trends - Canada Compared to the World ____________________ § In 2005 and 2010, Canadian drug sales accounted for _____ 2. 4% and 2. 7%, respectively, of the global market § Small, but a growing market 3
Market trends - Canada Compared to the World ____________________ § Growth in drug sales outpacing comparator _____ countries 4
Market trends - Canada Compared to the World ____________________ § Canadian prices comparatively higher than a _____ number of OECD countries 2, 50 Avg Bilateral Foreign-to-Canadian Price Ratios: Top 300 selling oral solids in Canada 2, 00 1, 50 1, 00 0, 50 A US n pa Ja M ex ico y N an rm Ge CA k De nm ar nd itz er la en Sw ed Sw um lgi Be a st ri Au n ai Sp ce an Fr lia ra st Au UK ly Ita S. Ko r ea 0, 00 IMS Health Data, 2010 5
Market trends - share of total prescriptions* by segment, 2005/06 to 2010/11 ____________________ 6
Getting to know the PMPRB - key quotes and court pronouncements ____________________ “…changes (to Bill C-22) will also ensure consumer protection by creating a drug prices review board to monitor drug prices. . . ” 7 § The Honourable Harvie Andre made this comment upon introducing Bill C-22 for second reading on November 20, 1986. § The protection of consumer interests was one of the “Five Pillars” of public policy addressed by amendments to the Patent Act creating the PMPRB.
Getting to know the PMPRB - key quotes and court pronouncements ____________________ § “…The Board’s interpretation of its mandate under the relevant provisions was consistent with its consumer protection purpose and should not be disturbed. ” § 8 Supreme Court of Canada’s decision in the Celgene/Thalomid matter, January 2011
Getting to know the PMPRB - key quotes and court pronouncements ____________________ “…the merest slender thread” - ICN Pharmaceuticals Inc. [1997] (Virazole) § Defines three-part test for PMPRB’s Jurisdiction – – – § patentee of an invention must pertain to the medicine sale of the medicine in Canada Defines ‘patent pertains’ concept a rational connection between the invention and the medicine – the merest slender thread – no need to go beyond the face of a patent to establish the required nexus – no requirement that the patent be used – * Jurisdiction - all patents whether used or capable of being used 9
How does it really work - price regulation ____________________ Jurisdiction § Regulates prices patentees charge (i. e. factory-gate price) for patented drugs, to wholesalers, hospitals or pharmacies Factors to be considered by Board in determining a non-excessive price § Patent Act and Patented Medicines Regulations – class tests and reference-based framework § § § 10 Prices of other medicines in same therapeutic class sold in Canada Prices of medicines sold in comparator countries* Changes in CPI *7 comparator countries: France, Germany, Italy, Sweden, Switzerland, UK and the US
How does it really work - price tests ____________________ § Blend of therapeutic improvement & international _____ referencing § Recognize incremental pharmaceutical innovation § At introduction, price premium aligned with therapeutic improvement: § Four levels of therapeutic improvement: Breakthrough – Median of International Price Comparison (MIPC) 2) Substantial Improvement – Higher of top of Therapeutic Class Comparison (TCC) and the MIPC 3) Moderate Improvement – Higher of mid-point between top of TCC test and the MIP, and top of TCC (primary & secondary factors apply here) 4) Slight/No Improvement – Top of TCC 1) 11 § After introduction, monitor Average Transaction Price (ATP) subject to CPI based price increases and cannot be greater than HIPC
How does it really work - price tests ____________________ § Price tests are applied in accordance with § therapeutic improvement Based on specific circumstances, price ceilings at intro may be set differently § For example, in 2011, within the “slight or no improvement category” (70% of new drugs) the highest international price (HIPC) test set the Maximum Average Potential Price (MAPP) 30% of the time because the TCC was higher than HIPC, or a TCC could not be conducted § therapeutic class comparison set the MAPP 40% of the time § 12
How does it really work - Biologics ____________________ § Biologics treated like any other drug § Some biologics represent a breakthrough (eg. Enbrel in 2000) and get the MIPC § Others may fall under moderate or no improvement therapeutic categories (eg. Humira, Cimzia, Simponi) § Looking at vaccines, Gardasil was a breakthrough in 2006, but Cervarix was categorized as slight or no improvement in 2010 13
How does it really work - MAPP compared with public price ____________________ Drug Cat Intro. MIP Intro HIPC Pivotal Test MAPP Intro Benc h Price (ATP) Publicly availabl e price Brand-X SNI 1. 15 2. 95 TCC 2. 45 0. 68 0. 69 Brand-Y SNI 1. 40 1. 85 TCC 1. 52 1. 50 Generic- SNI A 0. 85 1. 50 TCC* 0. 65 0. 42 0. 33 * Brand price sets the MAPP – brand price $0. 65 14
Average Ratio of 2011 Price to Introductory Price, by Year of Introduction ____________________ 1, 12 1, 06 1, 07 1, 06 1, 04 1, 03 1, 02 1, 01 1, 00 0, 99 0, 98 Ratio 0, 97 0, 94 0, 93 0, 92 0, 87 0, 82 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: PMPRB 15 2006 2007 2008 2009 2010
Concluding Remarks ____________________ § Very dynamic market with many factors at play § On average, Canadian prices are lower than prices in certain EU countries and lower than US prices § Recognizing innovation and ensuring a non-excessive price is a delicate balance § Highly compliant industry § Continue to promote compliance § Commitment to Guidelines that are responsive to a changing environment 16
Thank you. Merci. michelle. boudreau@pmprbcepmb. gc. ca www. pmprb-cepmb. gc. ca Twitter: @PMPRB_CEPMB 17
Annex – additional information, stats and NPDUIS overview 18
Market trends - Canadian Public Drug Plan* Spending on Rx Drugs, Rates of Growth and Annual Totals, 2005/06 to 2010/11 * Does not include all drug plans. The totals include drug cost, retail/wholesale mark-ups as well as dispensing fees. 19
PMPRB Price Tests - How Does it Really Work? ____________________ § Of the 109 New Drug Products introduced in 2011: _____ 20 § 12% under investigation § 69% were of slight or no improvement § 25% of moderate improvement § 5% of substantial improvement 1% breakthrough
PMPRB Price Tests - International Referencing § Reference pricing at introduction and for existing drugs ____________________ based on 7 comparator countries - France, Germany, Italy, _____ Sweden, Switzerland, UK, and US § Policy changes in these countries could impact prices in Canada § Over last three years, Germany has most often been the highest referenced price for PMPRB price tests, followed by US § Frequency in settingmeasures Highest International Price countries may lead Recent cost containment by reference 8 7 Comparison test at introduction to lower prices in Canada (e. g. , Germany) 7 6 6 5 4 4 33 3 2 2 2009 2 11 1 1 2010 A US UK nd la itz er Sw Sw ed en ly Ita y an rm Ge Fr an ce 0 21 2008
Regulatory Statistics High level of compliance - On average, 93 -95% overall compliance 2011 2010 New Drug Products Introduced 109 68 Number of Investigations 69 87 Between 2000 and 2009, average of 86 new patented drug products/year § Of the 109 new drug products introduced in 2011: § 79% within Guidelines § 13% under investigation § 8% outside of Guidelines but do not trigger an investigation 22
Regulatory Statistics: Voluntary Compliance Undertakings and Board Orders – 2008 -2012 ____________________ Year # VCUs # Board Payments of Excess Revenues 2008 6 1 $25. 5 M 2009 10 1 $37. 3 M 2010 12 3 $13. 2 M 2011 9 1 $0. 9 M 2012 6 1 $12. 1 M (May 31) 23 Orders
NPDUIS ____________________ § National Prescription Drug Utilization Information System § § 24 Established in 2011, in partnership with the Canadian Institute on Health Information (CIHI), at the request of F/P/T Ministers of Health Provides critical analyses of price, utilization, and cost trends to support drug plan policy decision-making for participating jurisdictions Steering Committee composed of F/P/T representatives provides PMPRB with advice regarding research needs and priorities Since December 2010, eight publications have been released
Some Recent and Forthcoming Studies ____________________ § Generic Drugs in Canada: International Price Comparisons and Potential Cost Savings § The Impact of Generic Entry on the Utilization of the Ingredient § Public Drug Plan Dispensing Fees: A Cost-Driver Analysis 2001/02 to 2007/08 § Wholesale Up-charge Policies of Canada’s Public Drug Plans 25 And Soon to Come… § New Drug Pipeline Monitor – Fourth Edition § Diabetes Test Strips: Actual Utilization vs. Recommendations
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