Frequently Asked Questions

Notice and Comment: On the change to the definition of Gap medicines, the references to comparator countries and the international price tests for Grandfathered medicines and their line extensions

Introduction

The proposed changes articulated in the N&C of July 15, 2021 would allow the PMPRB to move forward in implementing the October 23, 2020 Guidelines (the “Guidelines”).  These Guidelines are the culmination of a five-year process that dates back to the release of the PMPRB’s Strategic Plan in December 2015.

1. Comparator Countries: The comparator countries used under the proposed Guidelines are currently referred to as the “PMPRB11”. What is the reason to change the term to “Schedule Countries”? 

The proposed changes allow for implementation of the Guidelines by ensuring that the comparator countries remain aligned with the list of countries set out in the Schedule of the Patented Medicines Regulations. Currently there are 7 countries and when the new regulations come into effect there will be 11.

2. How many drugs will face price reductions as a result of the proposed change? What is the range of percentage reduction?

The proposed changes to the price test and schedule for Grandfathered medicines is expected to result in list prices of Grandfathered medicines to decline on average by 10% in the first year following implementation of the Guidelines, with 51% of medicines requiring a price reduction. The proposed change is expected to have a lesser impact on existing Expensive Drugs for Rare Diseases (EDRDs), with an estimated list price reduction of 3.5%, with 55% of medicines requiring a price reduction.   

3. When will prices need to be in compliance? 

The operative date for assessing compliance for Grandfathered, Line Extension and Gap medicines with the MLP will remain July 1, 2022, as stated in the PMPRB’s announcement on April 16, 2021.

4. When can patentees expect to get their MLP for Grandfathered and Line Extension medicines?

If the changes are adopted, it is expected that Grandfathered medicines and their line extensions will be provided an MLP as early as October 2021.

5. How will the MLP be set for line extensions of grandfathered drugs launched after July 1,2021

As per section 72 of the Notice and Comment, for Grandfathered medicines and their Line Extensions first filed with the PMPRB for the reporting period(s) ending in December 31, 2021 or later, the MLP will be set by the HIP for the Schedule countries set out in the Regulations for which the patentee has provided information.

6. How will exchange rate be applied to the MLP calculation for Grandfathered and Line Extension Medicines using the PMPRB7 schedule of countries?

For each country, the exchange rate is the simple average of the monthly average noon spot exchange rates for the 36-month period ending in the second month of the reporting period under review. For the January to June reporting period, the exchange rate is based on February 2021.