PMPRB Update: Canadian Government Announces No Longer Seeking to Implement Price Regulating Factors or Requirement to Report Net Prices

PMPRB Update: Canadian Government Announces No Longer Seeking to Implement Price Regulating Factors or Requirement to Report Net Prices

Yesterday the Canadian government announced that it would no longer seek to implement certain controversial amendments to the Patented Medicines Regulations.[1] A statement from the Minister of Health said that Health Canada will not move forward with the implementation of the changes related to economic factors regulating drug prices, nor with the requirement to report net prices.

Canada’s decision to abandon these amendments follows the recent decision of the Quebec Court of Appeal in Merck Canada Inc. vs. Attorney General of Canada2022 QCCA 240, in which the court found that amendments that would add new economic factors to consider when determining whether the price of a drug is excessive (namely pharmacoeconomic value, market size in Canada, GDP and GDP per capita in Canada), and a requirement to file net information of all price adjustments were unconstitutional. See our recent article on this decision for more information.

Health Canada has announced that it will move forward with the implementation of the new basket of comparator countries (Australia, United Kingdom, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, Spain and Sweden ) and that it will reduce reporting requirements for those medicines least exposed to the risk of excessive prices (for example, vaccines and biosimilars). These changes will take effect July 1, 2022.

What does this mean for the pharmaceutical industry in Canada?

In a short time this year, there have been a number of significant victories for the pharmaceutical industry in Canada. As we pointed out previouslyCanadian courts of appeal have sent strong signals that general price control and consumer protection are outside the PMPRB’s jurisdiction and are not part of the balance struck in the patent law between encouraging research and development of patented medicines in Canada and protecting against patent abuse.

In light of yesterday’s announcement, it is likely that the PMPRB’s long-awaited updated guidelines will come into effect in July 2022.