PMPRB Releases Revised Draft Excessive Price Guidelines
By: Adrienne Blanchard

On March 26, 2009, the Patented Medicine Prices Review Board (PMPRB), Canada's federal price control body, released a revised draft Excessive Price Guidelines document for comment. This marks is the latest in a series of consultation documents released by the PMPRB over the past few years as it has embarked on its plan to overhaul the Guidelines.

The last proposals were published for comment in August of 2008. There are some significant changes to the proposed Guidelines in this version, most notably:

• information submitted by patentees as the publicly available prices for a given drug product will be subject to publication by the PMPRB.
  
  
• changes in terminology - instead of the "maximum non-excessive price" that is now used, the Guidelines would refer to the "non-excessive average price" which reflects the manner in which the price of a product is determined (ie., it is an average price, not an absolute maximum price). The term "introductory maximum non-excessive price" would be replaced by the "maximum average potential price" setting the upper threshold for the introductory average price in all "markets".
  
  
• a new "moderate" level of therapeutic improvement, allowing for a higher price than currently exists for such products. Under the current guidelines, no price premium is allowed if a product presents moderate, little, or no improvement over existing medications in the same therapeutic class. Primary and secondary factors are proposed for consideration of categorization; although secondary factors (e.g. compliance, patient convenience) can result in the level of therapeutic improvement being assessed up to the level of moderate they will not suffice to move the level from "moderate" to "substantial improvement".
  
  
• changes to the introductory price tests, particularly for new strengths of an existing product (the "reasonable relationship" test); modified guidelines for certain patented generic drug products, with the result that the price of these products will be considered only in reference to the product to which they are "bioequivalent".
  
  
• development of an international therapeutic class comparison test (ITCC). The concept of a new test was addressed in the August 2008 draft guidelines. The products that will be included in the price test will include generics in international markets (if they are marketed by the same company that sells the generic product in Canada), and any other products that are part of the domestic TCC test.
  
  
• more clarity and definition of the changes proposed to the price review process. Initially the introductory price in each market (wholesaler, pharmacy, hospital, and other, as well as each province/territory) will be reviewed as against a new "maximum average potential price". Prices of products, once marketed, will only be reviewed at the level of class of customer and/or province if the national average transaction price appears excessive or in the case of a complaint. The national average will continue to be examined.
  
  
• re-setting the non-excessive average price once a product is marketed under an NOC (where it was previously sold under the Special Access Programme) might be possible, but the proposed Guidelines only provide the potential to do so where additional costs are incurred in bringing a product to the market in Canada.
  
  
• allowing some flexibility in price by recognizing benefits offered to customers, to ensure that when special benefit programs end, a price may rebound to the pre-benefit, non-excessive price level.
  
  
• new content is proposed to address how patentees may offset any excess revenues that are deemed to be owing. The proposed Guidelines state that the while Board may allow a patentee to offset any excess revenues through a reduction in the price of the medicine, the average price of a patented drug product will only be considered to have been reduced if it is below the previous year's non-excessive average price; not taking an allowable price increase will not be able to be used to offset excess revenues.

Comments will be received until April 27, 2009.

A copy of the revised draft Excessive Price Guidelines may be found at:
http://www.pmprb-cepmb.gc.ca/cmfiles/Notice_and_Comment-Draft_Revised_Guidelines-Mar2609.pdf