The Federal Court has upheld reforms to the Patented Medicines Pricing Review Board that updated the board’s reference countries for drug pricing and required it to review three new economic factors when determining whether patented medicines are excessively priced.
The court ruled against an argument by Innovative Medicines Canada and 16 pharmaceutical companies in their application for judicial review that the changes fell outside the scope of the Patent Act, which governs the PMPRB.
“I find the purpose of the amendments related to the new mandatory factors . . . and the [reference countries] under section 6 . . . [are] sufficiently connected to and consistent with the purpose of the patented medicines regime in the context of the Patent Act: protecting consumers from the abuse of excessive pricing,” wrote Judge Michael Manson in his decision.
The reforms will update Canada’s reference countries for comparing its prices internationally. They’ll remove Switzerland and the U.S. — the only two countries in the world with higher patented drug prices than Canada — and add Australia, Belgium, Japan, the Netherlands, Norway and Spain, which all have lower drug prices.
They also make it mandatory for the board to consider the pharmacoeconomic value of a patented drug, the size of the market for it in Canada and the country’s gross domestic product and GDP per capita when determining whether its price is excessive.
However, Manson did rule that a section of the amendments that would require patentees to report the market price of the medicine in Canada and other markets, including any possible rebates, instead of the inflated sticker price, falls outside of the scope of the act.
In mid-June, the PMPRB released a new draft of its guidelines and launched a 30-day written consultation period. The amendments, which were initially slated to come into effect on July 1, have been delayed to Jan. 1, 2021.
In an emailed statement, the PMPRB said it was reviewing the impact of the decision but “does not believe any substantive changes to the June 2020 draft guidelines are required as a result.”
In a statement posted to its website, Innovative Medicines Canada said it’s reviewing the decision in consultation with its members. “We remain deeply concerned about the negative impact the amended patented medicines regulations will have on Canadians’ access to affordable, innovative medicines and on the country’s ability to attract investment to our life-sciences sector. The innovative medicines industry has demonstrated its vital role in the health and well-being of Canadians through the COVID-19 crisis and we must foster a regulatory environment that encourages it to grow and thrive.”
In another case making its way through the courts, five major pharmaceutical companies filed a constitutional challenge to the PMPRB changes in August 2019, arguing that the federal government doesn’t have the constitutional authority to regulate the pricing of medicines or manage health-care systems as those issues fall within provincial jurisdiction.