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Reforming Canada's Patented Medicine Prices Review Board [PMPRB]


Release Date: 02/26/2016
Staff Reference: Stephen Frank

February 26, 2016

Ms. Caroline Pitfield
Director of Policy
Office of the Minister of Health
70 Columbine Dr, Tunney's Pasture
Ottawa, Ontario
K1A 0K9

Dear Ms. Pitfield

Thanks again for taking the time to meet with us last week. We very much appreciated the Minister's insights and look forward to working closely with you in the coming years.

One area where the Minister indicated an interest in learning more from us relates to our views around reforming the PMPRB. In particular, the Minister asked if we could outline our views on changes that could happen in the short and medium terms. The following are our thoughts on this matter.

Short-term Changes

  • We believe there are a number of operational changes that the PMPRB should make in the short term that will provide meaningful benefits to private payers. We believe most of these could be implemented without regulatory or legislative change.
  • A significant concern for us is the current one-time review approach that the PMPRB takes for drugs. In practice, this means that as a drug's indications (use) grows beyond what was outlined when the drug first came to market, there is no ability to revisit the price ceiling for that drug. We know that some drugs have seen their market expand 10 fold without any follow-on review. As such, we strongly support a change in PMPRB practice such that therapeutic class price levels are reviewed periodically (e.g., every 5 years) or if increased indications result in a material change in volume (e.g., a 100 per cent increase) to ensure they reflect any material changes in the market since the prior review.
  • Secondly, we note that the list of international comparator countries used by the PMPRB when setting prices is generally made up of the higher cost countries globally. If the PMPRB continues to rely on reference pricing in the short term, we believe the PMPRB's list of comparator countries needs to be expanded to make it more representative of the entire OECD.
  • Finally, given that the PMPRB has in some ways become the private insurer price regulator (and less relevant for public plans who now work together to negotiate lower pricing through the pan-Canadian Pharmaceutical Alliance), we believe that the governance of the PMPRB needs to include individuals with an understanding of the private payer market in Canada. As such, we believe that the at least one of the Board GIC appointees should have private insurer background to ensure that private payers' perspectives are considered in the overall operations of the PMPRB going forward.
Medium-term Changes

Over the medium term, we believe a fundamental review of the PMPRB is warranted. This review should cover both the PMPRB's mandate and its operational processes. In particular, we believe that:

  • The mandate of the PMPRB should be changed such that its goal is clearly one of consumer protection. Its goal should be to achieve the lowest possible prices for Canadians, leveraging an economic and market driven process with international referencing being only one of many inputs to this process.
  • The PMPRB should review and regulate the pricing for subsequent entry biologics going forward.
  • The PMPRB should examine ways to be more aggressive in using value-based pricing approaches to setting prices and it should be more formally integrated with CADTH in order to streamline the pharmaco-economic reviews of new drugs coming to Canada.
As discussed, we believe there is an opportunity for the PMPRB to play an important role in helping to reduce the price of prescription drugs in Canada. I would be pleased to provide further information on any of the above or to discuss this further with you, if you would find it helpful.

Sincerely

Original signed by

Stephen Frank
Vice President, Policy Development and Health