Update on PMPRB Activities

This bulletin provides an update on recent activities at the PMPRB, including those outlined in the January 2007 NEWSletter: the Board's public consultations on the excessive price guidelines; proposed amendments to the filing regulations; updates on the status of the ongoing public hearings, and some comments on filing requirements. The January 2007 NEWSletter was released on the PMPRB web site February 16.

Consultations on the Excessive Price Guidelines

The Board commenced public consultations on the guidelines with release of a Discussion Paper in May 2006 and it received over 40 written submissions over the summer. The consultations moved into high gear in November 2006 with five public sessions, attended by "close to 140 people," across Canada. Summary reports on those meetings are to be published on the PMPRB web site in the near future.

The consultation process has evolved since May. The public meetings did not address the specific questions about the price tests for new patented drugs raised in the Discussion Paper, but focussed instead on questions related to the categorization system, how the guidelines should define "any market in Canada," and the issue of re-benchmarking, i.e. adjusting the maximum price of a drug. The January NEWSletter reports that at their regular meeting in December, Board members shared their perspectives on what they heard in the public meetings and "discussed several other Guideline-related topics, including introductory price tests, which were not covered in the sessions."

As for next steps, the Board reports that it will "finalize and approve a work plan for the next phase of analysis" at its next meeting on March 1.

Amendments to the PMPRB Filing Requirements

Over a year ago, on December 31, 2005, the PMPRB published proposed changes to the Patented Medicines Regulations in the Canada Gazette. Among other things, these proposals would shorten the time period for patentees to file price information with the Board, in particular, information on the introductory price of new patented products. The purpose of the proposed changes was to give consumers "quicker access to non-excessive patented medicines" and to keep pace with the Common Drug Review.

Interested parties had until January 30, 2006 to make submissions and the Board does not appear to contemplate any further consultations. It continues to report that a revised regulatory package is in the final stages of approval and that patentees will be informed of the changes to the filing requirements when they come into effect.

Update on PMPRB Hearings

The PMPRB initiated an unprecedented number of public hearings in 2006, six in total. All of those cases are ongoing along with one case initiated in 2004. A detailed schedule of hearing dates through the first half of 2007 is available on the PMPRB's web site. In his message, PMPRB Chair Dr. Brien Benoit made these comments about the Board's policy of voluntary compliance and the recent upsurge in enforcement activity:

The Board continues to hope that the transparency of the price review process, as facilitated by the Guidelines, will encourage voluntary compliance on the part of patentees. Nevertheless, six Notices of Hearing were issued in 2006 and the proceedings are ongoing.

Among the major recent developments in the ongoing cases:

• Adderall XR, Shire BioChem Inc. and Concerta, Janssen-Ortho Inc. On December 18, 2006, the Board issued an Order rejecting Shire's motion to the effect that the Board's jurisdiction only began after the issuance of the relevant patent and did not extend back in time to cover the patent pending period. At the same time the Board issued an Order dismissing Janssen-Ortho's objection to the assertion of Board jurisdiction over the patent pending period in the Concerta Hearing. On January 16, 2007, both Shire and Janssen-Ortho filed applications for judicial review of the Board's Orders with respect to the patent pending period in the Federal Court. No date has been set for a hearing by the Federal Court. In the meantime, the Board has been proceeding with its separate hearings into the prices of Adderall XR and Concerta. The next scheduled dates for these are March 2 and March 21 respectively.
• Airomir, 3M Canada Company A hearing scheduled for the fall was postponed, and a new hearing schedule is to be announced.
• Risperdal Consta, Janssen-Ortho Inc. The hearing on this matter continued in November and is scheduled to resume February 28.
• Strattera, Eli Lilly Canada Inc. The Board issued a Notice of Hearing on December 15, 2006. Strattera is the third drug in the therapeutic class, drugs to treat Attention Deficit Hyperactivity Disorder (ADHD), which is the subject of a hearing. On February 22, 2007, the Board will hear a motion by Lilly to adjourn this matter pending determinations in the Adderall XR and Concerta cases which were commenced earlier in 2006.
• Dovobet, Leo Pharma Inc. Following proceedings commenced in November 2004, the Board issued a decision on April 19, 2006 that the price of Dovobet was excessive and that, by way of remedy, the price should be lowered to a non-excessive level and Leo should make a payment to the Government of Canada to offset excess revenues it had received. The Board was not able to quantify the price reduction and offset at the time and asked Leo and Board Staff to make further submissions. The Board heard those submissions on December 1, 2006 and is expected to issue its order and reasons in a few weeks. An application for judicial review of the Board's decision in April 2006 was heard in the Federal Court on February 12, 2007 and judgment has been reserved.

Filing Requirements

The PMPRB has also reminded reporting patentees of the current filing requirements under the Act, and changes in the Board's practice in enforcing deadlines. Price information for the period July 1 to December 31, 2006 was to be filed by January 30, 2007 and information on R&D expenditures in 2006 is due by March 1, 2007. In the event a patentee is in a complete failure to file situation, the Board will be asked to issue an Order requiring the patentee do so; in the event of a partial failure to file, the patentee will be given seven days before the Board is asked to issue an Order. Under the Act, failure to comply with the reporting requirements and a Board Order is punishable by fines up to $25,000 per day and even jail terms.

In an email advisory, the PMPRB also reminded patentees that in submitting price information, the regulations require the reporting of "net revenue" or average price "after any reduction given as a promotion or in the form of rebates, discounts, refunds, free goods, free services, gifts or any other benefits of a like nature" and advised that this language means that any such reduction must be included in the calculation of the average transaction price (ATP). The advisory did not, however, reference the Board's policy, as set out in its April 2000 NEWSletter, concerning rebates and discounts provided under special programs and incentives, such as compassionate release programs and expenditure limitation agreements with public payers, and the potential to either include them or exclude them in the calculation of the ATP for price review purposes. As such, this recent communique raises the question as to whether this signals a shift in policy at the Board.

The latest issue of the PMPRB NEWSletter can be accessed at:
http://www.pmprb-cepmb.gc.ca/english/view.asp?x=271&id=80