PMPRB closes all open drug-pricing investigations before implementing new guidelines on Jan. 1

The Patented Medicine Prices Review Board has closed any outstanding investigations into excessive pricing in order to start “fresh” when updated guidelines are implemented in the new year, says its director general. Guillaume Couillard said that the decision was made by the drug pricing tribunal's board of directors, which is separate from the team of bureaucrats that he leads. “All the legacy investigations from the interim guidance or the 2010 guidelines are now closed, and all drugs that are under our jurisdiction will be reviewed under the guidelines starting Jan. 1,” he said. Couillard disclosed this information during an interview with The Hill Times on Dec. 16 about the Patented Medicine Prices Review Board’s (PMPRB) 2024 annual report. The bureaucrat was asked about the reason behind the soaring number of investigations. The 2024 report states that 430 patented medicines—39.7 per cent—of the total 1,084 patented drugs registered with the PMPRB were being probed. That is a slight jump over the 389 patented medicines—36.7 per cent—of the 1,060 total medicines that were subject to investigation in 2023. But those numbers are significantly higher than the proportion of medicines investigated between 2018 and 2022, which ranged from 9.3 per cent of total medicines in 2018 to 18.4 per cent in 2022. (The Hill Times chose to compare statistics across annual reports since 2018 to understand patterns preceding the implementation of new regulatory measures or decisions made during the COVID-19 pandemic.) The implementation of new guidelines on Jan. 1, 2026, is the final step in a contentious process that began in 2017 to change how the PMPRB monitors drug prices. Canada had four federal health ministers between when the former Liberal government said it would change regulations and when the regulations were in effect in 2022: now-former MP Jane Philpott, left, and current Liberal MPs Ginette Petitpas Taylor, Patty Hajdu, and Jean-Yves Duclos. The Hill Times photographs Couillard attributed the high number of investigations in 2023 and 2024 to the approach outlined in 2022's temporary guidelines implemented, as the PMPRB developed permanent guidance to outline the steps it would take to monitor the prices of patented medicines to ensure that they are not excessive. He also said that investigations don’t determine whether a drug’s price is in excess. Instead, the data that's gathered helps staff decide whether to recommend a hearing before the PMPRB’s board where the actual declaration on excessive pricing is made. Although the PMPRB has closed open investigations, Couillard said that “there's nothing preventing us to go back in time and look at what happened before” when conducting future drug pricing reviews. Changes to PMPRB lead to new processes, legal interventions The new guidance became necessary as the federal government under then-prime minister Justin Trudeau amended the Patented Medicines Prices Regulations to provide new factors for monitoring drug prices. Court challenges by the pharmaceutical industry over those changes also impacted the development of the guidance as the legal decisions included interpretations of the PMPRB’s mandate as defined under the Patent Act. For example, a 2022 decision by the Quebec Court of Appeal acknowledged the PMPRB’s mandated role in ensuring that the prices of patented medicines are not excessive, but also said that Ottawa’s changes to the regulations—most of which were struck down—were meant to control the affordability of a drug price, which exceeds the PMPRB’s power, according to analysis by Torys LLP. After four legal challenges between 2019 and 2022, the only factor to survive—which has been in place since 2022—is a change to the list of countries whose patented drug prices are used in comparison to see how Canadian prices measure up. The list now includes 11 countries, as opposed to the previous list of seven. No longer on the list is the United States, where drug prices are significantly higher. The 2024 report says that U.S. patented drug prices were 264-per-cent higher than those in Canada. Canadian prices now fifth-highest in OECD nations Although contentious and subject to many delays, the Trudeau government’s decision to change how drug prices are monitored was in response to the fact that Canada for many years was typically considered to have the third-highest drug prices among member countries of the Organisation for Economic Co-operation and Development. The PMPRB’s 2024 report shows that Canada is now in fifth place behind the U.S., Mexico, Switzerland, and Italy. The report states that the year-over-year price increase for patented medicines in this country in 2024 was one per cent, which was due to a small number of patented medicines: “Approximately one-fifth of medicines (157 out of 864) increased in price, while approximately three-quarters had no year-over-year price change, a pattern that has remained consistent over the past two decades.” A total of 1,137 patented medicines were reported to the PMPRB last year, including 53 new medicines. This is the lowest annual figure over the seven years of reports reviewed by The Hill Times. The highest number of new medicines reported to the PMPRB was 108 in 2018. This chart compares the patented drug prices of OECD member nations against Canadian prices. The United States, Mexico, Switzerland, and Italy have prices higher than those in Canada. Spain is relatively on par, while the remaining countries' prices are all lower. Data courtesy of the Patented Medicine Prices Review Board's Annual Report 2024 When asked to comment on the decline in new medicines, Couillard noted that the PMPRB’s job in producing the annual report—as mandated by the Government of Canada—is to provide “a picture” of patent drug data. The report is not expected to explain the data, but he also said it’s important to remember that the number of new medicines fluctuates year over year. Recent court decisions influencing PMPRB’s approach to data collection The Hill Times noticed another change, which was the exclusion of data in the 2023 and 2024 reports indicating new drugs' therapeutic impacts. Reports between 2018 and 2021 referred to a human-drug advisory panel that was responsible for evaluating medicines for therapeutic improvement. The 2022 report included data from previous years, but did not cite any information for that year due to the regulatory changes that were underfoot in the PMPRB’s review process. Reports between 2018 and 2022 cited four levels of therapeutic impact: breakthrough (a drug considered to be the first one sold in Canada to effectively treat an illness); substantial improvement; moderate Improvement; and slight or no improvement. The classification using the last three levels was based on comparing a drug with other medicines sold in this country that treat the same disease. Between 2018 and 2021, the reports found that the vast majority of new medicines introduced in Canada and subject to the PMPRB’s review offered “slight/no improvement.” For example, the 2021 report states that of the 23 studied new medicines, 22 were considered to provide “slight/no improvement” though it does not say how many provided “slight” improvements or none at all. One medicine was considered to provide “moderate improvement.” No drugs were classified as resulting in “substantial improvement,” or as a “breakthrough.” Couillard said that while the human-drug advisory panel is still in place, that data will no longer be included in future reports. He attributed the change to a move to the 2026 guidelines and the recent court decisions clarifying the PMPRB’s role. PMPRB is ‘wrong audience’ for complaints about how R&D is defined, says director general The report also outlines the level of total research and development (R&D) investments by the patented medicines firms that report to the PMPRB. The 2024 report states that the ratio of R&D spending as compared to companies’ sales revenues has increased slightly to 4.1 per cent from 3.7 per cent in 2023. That is much lower than the peak of 11.7 per cent in 1995. Actual spending on R&D in 2024 was $1.29-billion, which is 21-per-cent higher than the $1.07-billion spent in 2023. The report notes that its definition of R&D is based on work that would have been applicable for a Scientific Research and Experimental Development investment tax credit. The patented medicines industry has long complained about this definition. A 2023 release from Innovative Medicines Canada states that the definition excludes “industry partnerships with hospitals and universities and investments in biotechnology startups … which collectively carry out a significant portion of life sciences R&D in Canada today.” That same release states that data from Statistics Canada shows that the industry has an R&D-to-sales ratio of between 7.7 per cent and 10 per cent. Couillard said the PMPRB has also heard this criticism but that his organization is the “wrong audience.” “We’re not in charge of our own act and regulation. It's the minister of health and so it's the government with a big ‘G’ that's in charge of changing our regulation. So yes, we heard it. It's not something that is within our power to change. It's up to the government,” he said. tsanci@hilltimes.com The Hill Times

PMPRB closes all open drug-pricing investigations before implementing new guidelines on Jan. 1

But that doesn’t mean the drug pricing tribunal can’t look at past years’ data to inform future reviews of drug prices, says director general Guillaume Couillard.

Building Canada’s Digital Future: Why High-Performing, Trusted, and Energy-Efficient Networks Matter More Than Ever

News

Get free news updates

Opinion

Submit a guest opinion article

resources

Follow us

Advertise

subscribe

get help

Get free news updates

Submit a guest opinion article

PMPRB closes all open drug-pricing investigations before implementing new guidelines on Jan. 1

But that doesn’t mean the drug pricing tribunal can’t look at past years’ data to inform future reviews of drug prices, says director general Guillaume Couillard.

Become a Political Insider