Patented Medicines Regulations Unveiled

Over two years ago, the federal government announced that the rules governing the pricing of pharmaceuticals in Canada were changing. Now, after a lengthy public consultation process with interested Canadians and stakeholders, including the pharmaceutical industry, the Government of Canada has announced the final amendments to the Patented Medicines Regulations aimed at saving “Canadians billions over the next decade.”

The Patented Medicine Prices Review Board (PMPRB) has introduced the following amendments:

  • In setting drug prices, a “basket” of 11 other countries (no longer including the US and Switzerland), that are similar to Canada’s population, economy and approach to health care, will be used to compare prices.
  • In establishing a price ceiling for a drug in Canada, the PMPRB will now have access to the actual market price of the medicines. In the past, they only had the list or “sticker” price of the drug which was an inflated price.

“We’ll have a better idea of how reasonable our price list is comparative to what [drug manufacturers] are selling their drugs for.”

Federal Health Minister, Ginette Petitpas Taylor

  • The PMPRB will also use economics-based price regulation factors (e.g., comparing the value of one pharmaceutical drug or drug therapy to another), intended to price drugs based on “demonstrably better health outcomes” and “Canada’s willingness and ability-to-pay for drugs”.

Will the modernization of the pricing framework reduce the price of prescription drugs in Canada?

Advocates for patients with either very rare diseases or those participating in early phase clinical trials fear that drug companies will lose their incentive to continue developing innovative and novel medicines under a “value for money” model. This sentiment is echoed by Innovative Medicines Canada, who suggest that the new amendments could limit access to new medications “by delaying or even discouraging the launch of new drugs.”

We asked if the modernization of the pricing framework would lead to reduced prices in June of 2017 and feel that it still remains a relevant question. Our hope is that our clients, most of whom are plan sponsors, will get a much-needed advantage with more affordable drug prices. The debate remains complex.



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