Feds announce final changes to Canadian drug pricing regulations

On Friday, the federal government announced the final amendments to the Patented Medicine Prices Review Board regulations, estimating the reforms will save Canadians about $13 billion in the next decade and lay the foundation for national pharmacare.

The amendments, which were put forward by the government in a consultation in May 2017, include an update of the reference countries Canada uses to compare its prices internationally, so that prices are judged against countries that actually look like Canada in terms of population, economy and approach to health care.

Read: Proposed PMPRB changes could limit Canada’s access to new drugs: report

Secondly, the changes will provide the PMPRB with the actual market price of medicines in Canada — rather than inflated list or “sticker” price — to more accurately assess whether a price is reasonable when setting a price ceiling. The amendments will also allow the PMPRB to consider whether the price of a drug actually reflects the value it has for patients.

The government said it’s implementing these measures to lay the groundwork for national pharmacare.

“With these amendments, the PMPRB now has the tools and information needed to meaningfully protect Canadian consumers from excessive prices today and into the future,” said Dr. Mitchell Levine, chairperson of the PMPRB, in a statement. “We would like to thank the minister of health for placing her confidence in our ability to deliver on the government’s commitment to make prescription drugs more affordable and accessible for all Canadians.”

Read: Feds propose regulatory changes to reduce costs of prescription drugs

The PMPRB intends to consult on new draft guidelines this fall once its board has had an opportunity to examine the final version of the regulatory amendments. It will also ensure the consultation schedule gives stakeholders ample time to prepare for the amendments to come in on July 1, 2020.

In a statement, the Canadian Life and Health Insurance Association said the regulations are a crucial step to lowering prescription drug costs for all Canadians. “The changes announced today will mean lower costs for prescription medicines whether they are provided by governments or through workplace plans offered by employers to 25 million Canadians,” said Stephen Frank, president and chief executive officer of the CLHIA. “This modernization is good news for all Canadians who are currently paying some of the highest drug prices in the world.”

Brad Fedorchuk, executive vice-president of group customer at Canada Life, said the insurer also supports the reforms. “The life and health insurance industry has been vocal in support of these changes, and Canada Life applauds this step. Once the government formally implements these reforms, benefits plan sponsors and their members will also see reduced costs, helping to keep workplace benefits plans affordable for private drug plan coverage. This is a win for Canadians.”

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However, Innovative Medicines Canada warned the amendments will limit Canadian patients’ access to new innovative medicines and discourage investment in Canada’s life sciences sector for years to come.

“We have just received the amended regulations and will require time to analyze them fully,” said Pamela Fralick, president of IMC, in a press release. “However, given what we have heard to date, our fear is that patients will be worse off.

“These regulatory changes have jeopardized our industry’s incentive to invest in innovation in Canada,” added Fralick. “The regulations will also impact global decision-making with respect to the launch of clinical trials in Canada, which are high-value health research activities that enable Canadian patients to benefit from early access to new and promising medicines free of charge.”

Read: How the pan-Canadian Pharmaceutical Alliance works