2024-25 Operating context

In July of 2022, long-awaited amendments to the Patented Medicines Regulations (“Regulations) came into force. The main change brought into effect by these amendments is to the group of countries that rights holders must file pricing information about with the PMPRB. The new group is composed of countries that, in the aggregate, have much lower priced patented medicines than the old group. Whereas the policy intent behind the composition of the old group was to have information about international prices  in  countries that attract significant investment in pharmaceutical research and development (R&D), on the assumption that Canada would enjoy come to attract similar levels of R&D investment if its pricing was in line with the international prices, the policy intent behind the new group is to have Canadian prices more closely aligned with median prices in member countries of the Organization for Economic Development (OECD), in the hope of ensuring that Canadian prices are more closely aligned with the prices in those countries. Changes to the PMPRB’s pricing Guidelines are necessary in order to give effect to this new policy on a day-to-day administrative basis and to realize the Board’s longstanding commitment to modernize and simply its regulatory framework.

As the Board works to advance new Guidelines in collaboration and consultation with relevant groups across the country, it is mindful of the evolving nature of the jurisprudence on excessive pricing in Canada and of its continuing duty to use its powers in a responsible and efficient manner. The regulatory landscape and policy environment for pharmaceuticals is rapidly shifting in Canada and on a global scale. National security, political imperatives, and supply chain disruptions intensified by the COVID-19 pandemic have become confounding factors in the formulation and prioritization of pharmaceutical policy, and have prompted new efforts from the Canadian government to build up domestic biopharmaceutical manufacturing capacity by attracting R&D investment in Canada.

At the same time, high inflation rates and budgetary constraints have given rise to a recent government-wide directive to reduce spending within departments over the next three years. Although the PMPRB is exempt from the direct budgetary requirements of this directive as the organizational budget is below the $25 million threshold, the Board’s mandate to ensure that prices of patented medicines in Canada are not excessive is invaluable to the larger project of achieving affordable access to medicines for Canadians, which will impact budgets for payers across the country. This mandate is part of the larger scope of the government’s portfolio of pharmaceutical policy.

The Board enters 2024-25 with a new Vice-Chairperson and two recently appointed new members. Together with a new Chairperson appointed in January 2023 and the anticipated appointment of a new Executive Director in calendar year 2024, the PMPRB has undergone a significant change in leadership in the past year and moves forward with its Guidelines development under fresh direction.