Regulatory Process

The PMPRB monitors the prices charged by patentees for patented drugs on an ongoing basis. Under the Patent Act, patentees are required to file price and sales information about their patented drug products at introduction and twice a year thereafter for each strength of each dosage form of each patented drug product sold in Canada. However, patentees are welcome to consult with the PMPRB on the application of the Guidelines at any time. The Board may, on request, pre-approve a price under certain conditions by issuing an Advance Ruling Certificate. Patentees are not required to obtain approval of the price before a drug is sold.

If you are a patentee, please visit Are You a Patentee? for more information about your reporting obligations.

Scientific Review

The first step in the PMPRB's regulatory process is a scientific review, which assesses the level of therapeutic improvement of a new patented drug product. A committee of experts known as the Human Drug Advisory Panel also recommends appropriate drug products to be used for comparison. The level of therapeutic improvement of a patented drug is used to determine a ceiling price, known as the Maximum Average Potential Price, at introduction.

• More information on the scientific review process
• More information on the HDAP meeting schedule and filing requirements

Price Review

Board Staff reviews pricing information for all patented drug products sold in Canada on an ongoing basis to ensure that the prices charged by patentees comply with the Guidelines established by the Board. The Guidelines, which are based on the price determination factors in Section 85 of the Act, were developed by the Board in consultation with stakeholders, including the provincial and territorial Ministers of Health, consumer groups, and the pharmaceutical industry.

• More information on the price review process

Investigations

If Board Staff finds that a price appears to exceed the Guidelines, and the circumstances meet the criteria for commencing an investigation, Board Staff will open an investigation to determine whether the price of the patented drug product in fact exceeds the Guidelines.

An investigation could result in:

• closure of the file if the price is found to be within the Guidelines
• a Voluntary Compliance Undertaking by the patentee to reduce the price and offset excess revenues through a payment and/or a reduction in the price of another patented drug
• a public hearing to determine whether the price is excessive.

Voluntary Compliance Undertakings

A Voluntary Compliance Undertaking (VCU) is a written commitment by a patentee to comply with the Board’s Guidelines, including adjusting the price of the patented drug in question to a non-excessive level and offsetting any excess revenues that may have been received as the result of having sold the patented drug at an excessive price in Canada. Patentees are given the opportunity to submit a VCU when Board Staff concludes, following an investigation, that the price of a patented drug product sold in Canada appears to have exceeded the Guidelines. A VCU can also be submitted following the issuance of a Notice of Hearing, but must then be approved by the Hearing Panel. VCUs represent a compromise between the PMPRB and the patentee as a result of negotiations between the parties in view of the specific facts and underlying context of a particular case. As such, VCUs are not intended to have precedential value.

• More information on Voluntary Compliance Undertakings

Hearings

If the price of a patented medicine appears to be excessive, the Board can hold a public hearing. If it finds that the price is excessive, it may issue an order to reduce the price and to offset revenues received as a result of the excessive price.

Board decisions are subject to judicial review in the Federal Court of Canada.

• More information on Hearings and Decisions

Advance Ruling Certificates

Under the Patent Act, the Board may issue a non-binding Advance Ruling Certificate on the price of a patented drug product at the request of the patentee. This requires the patentee to clearly establish that the proposed price of the patented drug product would not exceed the maximum average potential price as provided by the Board's Compendium of Policies, Guidelines and Procedures.

• More information on Advance Ruling Certificates