Annual Report 2018

Statistical Highlights 2018

Regulatory Mandate

• 1,403 patented medicines for human use were reported to the PMPRB, including 108 new medicines.
• 7 Voluntary Compliance Undertakings were accepted as at December 31, 2018.
• $315 thousand in excess revenues offset by way of payments to the Government of Canada, in addition to price reductions.

Reporting Mandate

Sales Trends:

• $16.7 billion in sales of patented medicines in Canada in 2018, decreasing slightly by 0.6% from the previous year.
• Patented medicines accounted for 59.0% of the total medicine sales in Canada, a decrease from 61.5% in 2017.

Price Trends:

• Prices of existing patented medicines were stable, while the Consumer Price Index rose by 2.3%.
• Canadian prices were fourth highest among the seven PMPRB comparator countries, lower than prices in Switzerland, Germany and the US.

Research and Development:
R&D-to-sales ratios decreased in 2018:

• 4.0% for all patentees, a slight decrease from 4.1% in 2017.
• 4.3% for Innovative Medicines Canada members, a decrease from 4.6% in 2017.

R&D expenditures:

• $892.6 million in total R&D expenditures reported by patentees, an increase of 2.4% over 2017.
• $723.0 million in R&D expenditures reported by Innovative Medicines Canada members, a decrease of 4.3% over 2017.

Letter to the Minister

February 28, 2020

The Honourable Patty Hajdu, P.C., M.P.
Minister of Health
House of Commons
Ottawa, Ontario
K1A 0A6

Dear Minister:

I have the pleasure to present to you, in accordance with sections 89 and 100 of the Patent Act, the Annual Report of the Patented Medicine Prices Review Board for the year ended December 31, 2018.

Yours very truly,

Dr. Mitchell Levine

Chairperson

Chairperson’s Message

The Patented Medicine Prices Review Board (PMPRB) is an independent quasi-judicial body established by Parliament in 1987 under the Patent Act (the Act). The PMPRB’s mandate is to protect and inform Canadians by ensuring that the prices of patented medicines sold in Canada are not excessive and by reporting on pharmaceutical trends.

In 2018, the PMPRB’s focus was on completing the final steps to modernize its regulations and guidelines. To that end, the PMPRB struck a steering committee composed of key stakeholders to provide it with high level feedback on a proposed new regulatory framework for protecting consumers from excessively priced patented medicines. To assist the committee, the PMPRB also established an expert working group to examine and advise on some of the more technically challenging aspects of the proposed new framework. The outcome of the deliberations of both the steering committee and the technical working group were presented to the Board for its consideration prior to the release of new draft guidelines for broader public consultation in the fall of 2019. Until such time as new regulations and guidelines are finalized and in force, the PMPRB will continue to administer its regulatory mandate under the existing rules to achieve the best possible results for Canadians.

In addition to progress on the PMPRB’s policy development objectives for new regulations and guidelines, 2018 also saw the legislative underpinnings to those two instruments further buttressed by the Supreme Court of Canada decision to deny Alexion’s leave to appeal application from the Federal Court of Appeal’s judgement in the Soliris matter. In doing so, the Supreme Court sent a strong signal that any doubts about the constitutional validity of the PMPRB’s legislative scheme should be firmly put to rest.

In terms of pharmaceutical trends, the most striking takeaway from this year’s Annual Report is the unprecedented 0.6% decrease in total spending on patented medicines. This can be explained by the fact that some key top-selling medicines stopped reporting to the PMPRB in 2018, including Remicade the highest selling prescription medicine in Canada. In 2018, medicines that previously reported to the PMPRB accounted for estimated sales of $3.3 billion, or 11.6% of all sales. This is a marked increase over the previous year and considerably more than a decade ago when medicines that formerly reported to the PMPRB accounted for $0.7 billion in sales, or 3.2% of all sales. Historically patented medicines have experienced a substantial erosion in market share upon loss of patent protection, however, recently that same effect has not been observed in a number of very high cost, biologic medicines that have come off patent. Given the significance of this phenomenon, the PMPRB has added new content to its Annual Report to track the impact of this trend as the market for these medicines matures.

Dr. Mitchell Levine
Chairperson

About the Patented Medicine Prices Review Board: Acting in the Interest of Canadians

The Patented Medicine Prices Review Board (PMPRB) is an independent, quasi-judicial body established by Parliament in 1987 under the Patent Act (Act).

The PMPRB is a consumer protection agency with a dual regulatory and reporting mandate. Through its regulatory mandate, it ensures that the prices of patented medicines sold in Canada are not excessive. The PMPRB also reports on trends in pharmaceutical sales and pricing for all medicines and on R&D spending by patentees. Its reporting mandate provides pharmaceutical payers and policy makers with information to make rational, evidence-based reimbursement and pricing decisions.

The PMPRB is part of the Health Portfolio, which includes Health Canada, the Public Health Agency of Canada, the Canadian Institutes of Health Research and the Canadian Food Inspection Agency. The Health Portfolio supports the Minister of Health in maintaining and improving the health of Canadians.

Our Mission:

The PMPRB is a respected public agency that makes a unique and valued contribution to sustainable spending on pharmaceuticals in Canada by:

• Providing stakeholders with price, cost, and utilization information to help them make timely and knowledgeable pricing, purchasing, and reimbursement decisions; and
• Acting as an effective check on the prices of patented medicines through the responsible and efficient use of its consumer protection powers.

Although part of the Health Portfolio, because of its quasi-judicial responsibilities, the PMPRB carries out its mandate at arm’s length from the Minister of Health, who is responsible for the sections of the Act pertaining to the PMPRB. The PMPRB also operates independently of other healthcare related bodies such as:

• Health Canada, which approves medicines for marketing in Canada based on their safety, efficacy and quality;
• federal, provincial and territorial (F/P/T) public drug plans, working collectively as the pCPA, which approve the listing of medicines on their respective formularies for reimbursement purposes; and
• the Common Drug Review and pan-Canadian Oncology Drug Review, administered by the CADTH, which recommends which new medicines should qualify for reimbursement by the pCPA.

The PMPRB is composed of public servants (Staff) who are responsible for carrying out the organization’s day-to-day work, and Board Members, Governorin-Council appointees who serve as hearing panel members in the event of a dispute between Staff and a patentee over the price of a patented medicine.

Jurisdiction

Regulatory

The PMPRB regulates the maximum price at which patentees (companies) may sell their products to wholesalers, hospitals, pharmacies and other large distributors. This price is sometimes also known as the “factory gate” (ex-factory) price. The PMPRB does not regulate the prices of non-patented medicines.

The PMPRB’s jurisdiction is not limited to medicines for which the patent is for the active ingredient or for the specific formulation(s) or uses the patentee sells the medicine for in Canada. Rather, its jurisdiction also covers medicines for which a patent “pertains” including patents for manufacturing processes, delivery systems or dosage forms, indications/use and any formulations.

The Act requires patentees (which include any parties who benefit from patents regardless of whether they are owners or licensees under those patents and regardless of whether they operate in the “brand” or “generic” sector of the market) to inform the PMPRB of their intention to sell a new patented medicine. Upon the sale of a patented medicine, patentees are required to file price and sales information at introduction and, thereafter, until all patents pertaining have expired.

Our Vision:

A sustainable pharmaceutical system where payers have the information they need to make smart reimbursement choices and Canadians can afford the patented medicines they need to live healthy and productive lives.

Patentees are not required to obtain approval of the price to be able to market their products. However, the Act requires the PMPRB to ensure that the prices of patented medicines sold in Canada are not excessive.

Staff reviews the prices that patentees charge for each individual strength and form of a patented medicine. If the price of a patented medicine appears to be potentially excessive, Staff will first try to reach a voluntary resolution by the patentee. If this fails, the Chairperson can decide that the matter should go to a hearing. At the hearing, a panel composed of Board members acts as a neutral arbiter between Staff and the patentee. If a panel finds that the price of a patented medicine is excessive, it can order the price be reduced to a non-excessive level. It can also order a patentee to make a monetary payment to the Government of Canada to offset the excess revenues earned and, in cases where the panel determines there has been a policy of excessive pricing, it can double the amount of the monetary payment.

Reporting

As required by the Act, the PMPRB reports annually to Parliament through the Minister of Health on its price review activities, the prices of patented medicines and price trends of all prescription medicines, and on the R&D expenditures reported by pharmaceutical patentees.

In addition, pursuant to an agreement by the F/P/T Ministers of Health in 2001, and at the request of the Minister of Health pursuant to section 90 of the Act, the PMPRB conducts critical analyses of price, utilization and cost trends for patented and non-patented prescription medicines under the National Prescription Drug Utilization Information System (NPDUIS). The PMPRB publishes the results of NPDUIS analyses in the form of research papers, posters, presentations and briefs. This program provides F/P/T governments and other interested stakeholders with a centralized, objective and credible source of information on pharmaceutical trends.

Among other initiatives under its reporting mandate, the PMPRB also hosts various forums, such as webinars, research forums and information sessions, with academics and policy experts to discuss and disseminate research on emerging areas for study on pharmaceutical trends in Canada and internationally.

1,403 Patented Medicines

1,403 Patented Medicines were reported to the PMPRB in 2018.

Communications and Outreach

The PMPRB takes a proactive and plain-language approach to its external communication activities. This includes targeted social media campaigns and more conventional (e.g., email and telephone) engagement with domestic, international and specialized news media. The PMPRB is actively pursuing additional opportunities to leverage new and emerging media to communicate with Canadians and its stakeholders.

The PMPRB recognizes the importance of openness and transparency as we continue to work on modernizing the way we carry out our mandate. We communicate regularly, through various channels, about our progress, including projected timelines, and key milestones. Engagement with stakeholders will remain a central part of our multi-faceted communications approach. Reporting on our progress helps ensure we remain focused on delivering results.

Governance

The Board consists of not more than five members who serve on a part-time basis. Board members, including a Chairperson and a Vice-Chairperson, are appointed by the Governor-in-Council. The Chairperson, designated under the Act as the Chief Executive Officer of the PMPRB, has the authority and responsibility to supervise and direct its work. By law, the Vice-Chairperson exercises all the powers and functions of the Chairperson when the Chairperson is absent or incapacitated, or when the office of the Chairperson is vacant.

The members of the Board, including the Chairperson, are collectively responsible for implementing the applicable provisions of the Act. Together, they establish the guidelines, rules, by-laws and other policies of the PMPRB provided for by the Act (section 96) and consult, as necessary, with stakeholders including provincial and territorial Ministers of Health, representatives of consumer groups, the pharmaceutical industry and others.

Members of the Board

Chairperson

Mitchell Levine,
BSc, MSc, MD, FRCPC, FISPE, FACP

Dr. Mitchell Levine was appointed Chairperson of the Board on February 13, 2018.

Dr. Levine is a professor in both the Department of Health Research Methods, Evidence and Impact and in the Department of Medicine, Division of Clinical Pharmacology & Toxicology at McMaster University in Hamilton, Ontario. He is also an Assistant Dean in the Faculty of Health Sciences and a faculty member of the Centre for Health Economics and Policy Analysis at McMaster.

Dr. Levine received his medical degree from the University of Calgary in 1979, followed by postgraduate medical training in Internal Medicine (FRCPC) and in Clinical Pharmacology at the University of Toronto (1981–1987). He received an MSc degree in Clinical Epidemiology from McMaster University in 1988.

Prior to his appointment to the Board, Dr. Levine was a member of the PMPRB’s Human Drug Advisory Panel. He currently acts on an ad hoc basis as a clinical pharmacology consultant to the Ontario Ministry of Health and Ministry of Long-Term Care. In addition, he is a Deputy Editor of the ACP Journal Club: Evidence-Based Medicine.

This is Dr. Levine’s second term as a Board member. He was initially appointed as its Vice-Chairperson in 2011.

Vice-Chairperson

Position vacant

Members

Carolyn Kobernick,
B.C.L., LL.B.

Carolyn Kobernick was appointed Member of the Board on June 13, 2014.

Ms. Kobernick is a lawyer and former public servant. Prior to her retirement in 2013, Ms. Kobernick was Assistant Deputy Minister of Public Law for the Department of Justice. As principal counsel to the Minister of Justice and Attorney General of Canada, Ms. Kobernick was instrumental in the development and delivery of policy for the Public Law sector. In addition to identifying key strategic, legal and operational matters, she tackled cross-cutting national issues as the liaison between the Department of Justice and other government organizations.

Ms. Kobernick joined the Department of Justice in 1980, where she practiced litigation and tax law at the Toronto Regional office. In 1991, she was appointed Senior General Counsel, Deputy Head, Business and Regulatory Law Portfolio, after working for over a decade in the legal services unit of the Correctional Service of Canada. In her role as Senior General Counsel, Ms. Kobernick was involved in complex federal policy and operational issues, including the Alaska Pipeline and Mackenzie Valley Pipeline files and the Sponsorship file.

During her career with the public service, Ms. Kobernick actively participated in many high-profile initiatives. She was Chair of the National Legal Advisory Committee and Departmental Champion for Aboriginal People and Gender Equity. She also served as the Senior Department of Justice official at the Domestic Affairs Cabinet Committee, and was appointed Senior Legal Advisor to the Government of Canada for the 2004 Gomery Inquiry.

Ms. Kobernick holds a B.C.L. and LL.B. from McGill University and is a member of the bar of Ontario. In 2012 she obtained a Certificate in Adjudication for Administrative Agencies, Boards and Tribunals from the Osgoode Hall Law School and the Society of Ontario Adjudicators and Regulators.

Dr. Ingrid Sketris,
BSc (Pharm), PharmD, MPA(HSA), Clinical Toxicology Residency

Dr. Ingrid Sketris was appointed Member of the Board on June 29, 2018.

Dr. Sketris is a licensed pharmacist and a professor at the College of Pharmacy, Dalhousie University, with cross appointments to Medicine and Health Administration.

Dr. Sketris received her Doctor of Pharmacy in 1979 from the University of Minnesota, followed by her residency in Clinical Toxicology at the University of Tennessee Centre for the Health Sciences. She also received a Master of Public Administration/Health Services Administration from Dalhousie University.

She is a leader in pharmacy, and has served as President of the Association of Faculties of Pharmacy of Canada and as a board member of the Canadian Council for Accreditation of Pharmacy Programs.

Dr. Sketris is a Fellow of the Canadian Society of Hospital Pharmacists, the American College of Clinical Pharmacy and the Canadian Academy of Health Sciences. She was previously elected to the US National Academies of Practice.

Matthew Herder,
B.Sc. (hons), LL.B., LL.M., J.S.M.

Matthew Herder was appointed Member of the Board on June 29, 2018.

Mr. Herder is the Director of the Health Law Institute at Dalhousie University as well as an Associate Professor in the Department of Pharmacology in the Faculty of Medicine, with a cross-appointment to the Schulich School of Law.

Mr. Herder’s research focuses on biomedical innovation policy, with a particular emphasis on intellectual property rights and the regulation of biopharmaceutical interventions. His work is often interdisciplinary and policy-oriented, and he has received grants from the Canadian Institutes of Health Research and the Royal Society of Canada, in addition to appearing as an expert witness before several Parliamentary committees on pharmaceutical regulation and policy.

Prior to arriving at Dalhousie, Mr. Herder was the Ewing Marion Kauffman Foundation Legal Research Fellow at New York University’s School of Law. He was a Law Clerk at the Federal Court of Canada and was admitted to the Law Society of Upper Canada. Mr. Herder holds a Master of the Science of Law degree from Stanford Law School as well as two law degrees from Dalhousie University.

Organizational Structure and Staff

Executive Director

The Executive Director is responsible for advising the Board and for the leadership and management of Staff.

Regulatory Affairs and Outreach

The Regulatory Affairs and Outreach Branch reviews the prices of patented medicines sold in Canada to ensure they are not excessive; ensures that patentees are fulfilling their filing obligations; encourages patentees to comply voluntarily with the PMPRB’s Guidelines; implements related compliance policies; and investigates complaints into the prices of patented medicines.

Policy and Economic Analysis

The Policy and Economic Analysis Branch develops policy and strategic advice; leads stakeholder consultations and makes recommendations on possible amendments to the PMPRB’s Guidelines; conducts research and analysis on the prices of medicines, pharmaceutical market developments and R&D trends; and publishes studies aimed at providing F/P/T governments and other interested stakeholders with centralized, objective, and credible information in support of evidence based policy.

Corporate Services

The Corporate Services Branch provides advice and services in relation to human resources management; facilities; procurement; health, safety and security; information technology; and information management. It is also responsible for financial planning and reporting, accounting operations, audit and evaluation, and liaising with federal central agencies on these topics.

Board Secretariat, Communications and Strategic Planning

The Board Secretariat, Communications and Strategic Planning Branch develops and manages the PMPRB’s communications, media relations, and public enquiries; manages the Board’s meeting and hearing processes, including the official record of proceedings; and coordinates activities pursuant to the Access to Information Act and the Privacy Act. It is also responsible for strategic planning and reporting.

General Counsel

The General Counsel advises the PMPRB on legal matters and leads the legal team representing Staff in proceedings before the Board.

Budget

In 2018–19, the PMPRB had a budget of $14.872 million and an approved staff level of 72 full-time equivalent employees.

Regulating Prices of Patented Medicines: Continued Vigilance Necessary

Medical advancements have introduced many innovative new medicines to the Canadian marketplace to improve existing treatments and to treat conditions that previously had no pharmaceutical therapy. However, many of these new medicines come at a very high cost. Since 1987, pharmaceutical costs in Canada have grown at an average annual rate of 7.2%^{Footnote 1}, outpacing all other health care costs and growing at well over 3 times the pace of inflation. At 15.7% of total health care spending, pharmaceuticals now rank ahead of spending on physicians.^{Footnote 2} About 1 in 5 Canadians reports having no prescription medicine coverage and many more are under-insured or face high deductibles or co-pays. Almost 1 in 10 Canadians have had to forego filling a prescription medicine in the past year for reasons related to cost.^{Footnote 3}

The PMPRB protects the interests of Canadian consumers by ensuring that the prices of patented medicines sold in Canada are not excessive. It does this by reviewing the prices that patentees charge for each individual patented medicine and by ensuring that patentees reduce their prices and pay back excess revenues where appropriate.

Reporting Requirements

By law, patentees must file information about the sale of their medicines in Canada. The Act, along with the Patented Medicines Regulations (Regulations) set out the information required and Staff reviews pricing information on an ongoing basis until all relevant patents have expired.

There are several factors used for determining whether the price of a medicine is excessive, as outlined in section 85 of the Act.

The Compendium of Policies, Guidelines and Procedures (Guidelines) details the price tests used by Staff when it reviews the prices of patented medicines. The Guidelines are not binding and were developed in consultation with stakeholders, including the provincial and territorial Ministers of Health, consumer groups, and the pharmaceutical industry. When an investigation determines that the price of a patented medicine may be excessive, the patentee is offered the opportunity to voluntarily lower its price and/or refund its excess revenues through a Voluntary Compliance Undertaking (VCU). If the patentee disagrees with the findings of the investigation and chooses not to submit a VCU, the Chairperson may issue a Notice of Hearing. After hearing the evidence, if the Board finds that a price is excessive, it can issue an order requiring a patentee to reduce that price and/or refund excess revenues. Copies of the Act, the Regulations, the Guidelines, and the Patentee’s Guide to Reporting are available on the PMPRB’s website.

Failure to Report

The PMPRB relies on patentees’ full and timely disclosure of any and all patented medicines being sold in Canada to which a patent pertains. In 2018, 5 medicines were reported to the PMPRB for the first time despite being patented and sold prior to 2018. (See Table 2, Failure to Report the Sale of Patented Medicines)

Failure to File Price and Sales Data (Form 2)

Failure to file refers to the complete or partial failure of a patentee to file the information required by the Act and the Regulations to the PMPRB. There were no Board Orders issued for failure to file in 2018.

Data source: PMPRB

Scientific Review

Human Drug Advisory Panel

A scientific evaluation is done on all new patented medicines as part of the price review process. The PMPRB established the Human Drug Advisory Panel (HDAP) to provide independent expertise and advice to Staff. HDAP conducts an evaluation when a patentee claims the new medicine provides a therapeutic improvement. HDAP members review and evaluate the appropriate scientific information available, including any submission by a patentee about the proposed level of therapeutic improvement, the selection of comparator medicines, and comparable dosage regimens.

HDAP evaluates the therapeutic benefit of new patented medicines according to the following definitions:

• Breakthrough: A medicine that is the first one sold in Canada to effectively treat a particular illness or effectively address a particular indication.
  
• Substantial Improvement: A medicine that, relative to other medicines sold in Canada provides substantial improvement in therapeutic effects.
  
• Moderate Improvement: A medicine that, relative to other medicines sold in Canada provides moderate improvement in therapeutic effects.
  
• Slight or No Improvement: A medicine that, relative to other medicines sold in Canada, provides slight or no improvement in therapeutic effects.

Figure 1 illustrates the breakdown of new patented medicines in the year of introduction by therapeutic benefit for 2010 to 2018. The largest percentage of patented medicines (82.9%) introduced since 2010 were categorized as “Slight or No Improvement” in therapeutic benefit over existing therapies.^{Footnote 4}

The “Overall 2010–2018” bar represents the therapeutic benefit breakdown for all new patented medicines introduced from 2010 to 2018. The “Overall 2010–2018 Revenue Share” bar illustrates the revenue share by therapeutic benefit for all new patented medicines introduced from 2010 to 2018.

Our motto

Protect, Empower, Adapt.

Price Review

The PMPRB reviews the average price of each strength of an individual dosage form of each patented medicine. In most cases, this unit is consistent with the Drug Identification Number(s) (DIN), (DINs) assigned by Health Canada at the time the medicine is approved for sale in Canada.

New Patented Medicines Reported to the PMPRB in 2018

For the purpose of this report, a new patented medicine in 2018 is defined as any patented medicine first sold in Canada, or previously sold but first patented, between December 1, 2017, and November 30, 2018.

There were 108 new patented medicines for human use reported as sold in 2018. Some are one or more strengths of a new active substance and others are new presentations of existing medicines. Of these 108 new patented medicines, 12 (11.1%) were being sold in Canada prior to the issuance of the Canadian patent that brought them under the PMPRB’s jurisdiction. Table 3 shows the year of first sale for these medicines.

The list of New Patented Medicines Reported to PMPRB is available on the PMPRB’s website under “Regulating Prices”. This list includes information on the status of the review (i.e., whether the medicine is under review, within the Guidelines, under investigation, or subject to a VCU or Notice of Hearing). Figure 2 illustrates the number of new patented medicines for human use reported to the PMPRB from 1989 to 2018.

Of the 108 new patented medicines, the prices of 61 had been reviewed as of March 31, 2019:

• 39 were found to be within the thresholds set out in the Guidelines;
• 6 were at a level that appeared to exceed the thresholds set out in the Guidelines by an amount that did not trigger the investigation criteria; and
• 16 were at levels that appeared to exceed the thresholds set out in the Guidelines and resulted in investigations being commenced.
  • 8 of the 16 investigations were resolved by VCUs.

For a complete list of the 108 new patented medicines and their price review status, see Appendix 2.

Price Review of Existing Patented Drug Products for Human Use in 2018

For the purpose of this report, existing patented medicines include all patented medicines first sold and reported to the PMPRB prior to December 1, 2017.

At the time of this report, there were 1,295 existing patented medicines:

• 929 were priced within the thresholds set out in the Guidelines;
• 226 had prices that appeared to exceed the thresholds set out in the Guidelines by an amount that did not trigger the investigation criteria;
• 120 were the subject of investigations;
• 4 were under review;
• 13 were the subject of a Voluntary Compliance Undertaking;
• 2 are the subject of a hearing; and
• 1 is subject to a price reduction and excess revenue payment order (currently partially stayed).

Table 4 provides a summary of the status of the price review of the new and existing patented medicines for human use in 2018.

Update From the 2017 Annual Report

• Reviews of all but one medicine for human use that were reported as Under Review in the 2017 Annual Report have been completed.
• 98 of the 122 investigations reported in the 2017 Annual Report resulted in one of the following:
  • the closure of the investigation where it was concluded the price was within the thresholds set out in the Guidelines;
  • a VCU by the patentee to reduce the price and offset excess revenues through a payment and/or a reduction in the price of another patented medicine (see Voluntary Compliance Undertakings); or
  • a public hearing to determine whether the price was excessive, including any remedial Order determined by the Board (see Hearings).

Patented Over-the-Counter Medicines and Patented Medicines For Veterinary Use

Staff reviews the prices of patented over-the-counter medicines, patented generic medicines and patented veterinary medicines only when they receive a complaint. No such complaints were received in 2018.

Voluntary Compliance Undertakings and Hearings

Voluntary Compliance Undertakings

A VCU is a written undertaking by a patentee to adjust its price to conform to the Board’s Guidelines. The Guidelines set out procedures for patentees to submit a VCU when Staff concludes, following an investigation, the price of a patented medicine sold in Canada appears to have exceeded the thresholds set out in the Guidelines. A VCU represents a promise by a patentee geared towards a satisfactory resolution of an investigation initiated by Staff as per the Guidelines. A VCU takes into account the specific facts and underlying context of a particular case. As such, VCUs are not intended to have precedential value.

In 2018, seven VCUs were finalized. In addition to price reductions for certain medicines, excess revenues totaling $315,070.73 were offset by way of payments to the Government of Canada.

In 2019, as of May 31, 2019, the Chairperson approved the consideration of five more VCUs totalling $2.2 million bringing the total payments to the Government of Canada for 2018 up to May 31, 2019 to $2.5 million.

Hearings

The PMPRB holds hearings into two types of matters:

• excessive pricing; and
• failure to file–jurisdiction.

Excessive Pricing

In the event that the price of a patented medicine appears to be excessive, the Chairperson can commence a public hearing. If the Hearing Panel finds the price is excessive, it can issue an order to reduce the price of the patented medicine in question (or of another patented medicine of the patentee) and/or to offset revenues received as a result of the excessive price. Judicial review of Board decisions can be sought in the Federal Court of Canada.

In January 2019, the PMPRB announced it would hold a public hearing in the matter of the price of the patented medicine cysteamine bitartrate sold under the trade name Procysbi by Horizon Therapeutics Canada. The purpose of this hearing is to determine whether the medicine has been or is being sold in any market in Canada at a price that, in the Board’s opinion, is or was excessive: and, if so, what order, if any, should be made to remedy the excessive pricing. The matter is ongoing.

Failure to File–Jurisdiction

When Staff believes a patentee has failed or refused to provide the PMPRB the pricing and sales information required by law, Staff will recommend that the Chairperson call a public hearing to determine whether the patentee has, in fact, breached the reporting requirements of the Act and Regulations. If the Hearing Panel finds, as the result of a public hearing, that the patentee has failed to report the required information, the Hearing Panel can order the patentee to file the required pricing and sales information.

There were no failure to file hearings as of March 31, 2019.

Summary

Excess revenues totaling $6,803,627.11 were offset by payments to the Government of Canada through VCUs and Board Orders in 2018 and up to May 31, 2019.

Since 1993, 145 VCUs have been approved and 30 public hearings initiated. These measures resulted in price reductions and the offset of excess revenues by additional price reductions and/or payments to the Government of Canada. Over $209 million has been collected through VCUs, settlements and Board Orders through payments to the Government of Canada and/or to customers such as hospitals and clinics.

Matters Before the Federal Court, Federal Court of Appeal and Supreme Court of Canada

On October 20, 2017, Alexion Pharmaceuticals Inc. filed an application for judicial review of the Board’s decision dated September 20, 2017 in respect of its finding that the patented medicine eculizumab sold under the trade name Soliris was being sold at an excessive price in Canada and ordering Alexion to lower its price (currently stayed) and make an excess revenue payment of $4,245,329.60. The Board’s decision was found to be reasonable by the Federal Court via a decision dated May 23, 2019. Alexion has appealed the Federal Court’s decision in the Federal Court of Appeal.

On January 18, 2017, Galderma Canada Inc. filed an application for judicial review of the Board’s decision dated December 19, 2016. In that decision the Board found that Canadian Patent No. 2,478,237 pertains to the patented medicine eculizumab sold under the trade name Differin and ordered Galderma to file the required information for the period between January 1, 2010 and March 14, 2016. The Federal Court granted Galderma’s judicial review application on November 9, 2017 and quashed the Board’s decision. On November 21, 2017, the Attorney General appealed the Federal Court’s grant of the judicial review application. On June 28, 2019, the Federal Court of Appeal granted the appeal and issued its decision sending the matter back to the Board for redetermination. The Board’s decision on redetermination is pending.

There are no matter before the Supreme Court of Canada.

Key Pharmaceutical Trends: More Expensive Medicines Continue to Influence Sales

Overall spending on pharmaceuticals is influenced by many factors, including price, utilization, the entry of newer, more expensive medicines, and the loss of market exclusivity of older patented medicines. In 2018, there was a sizable increase in the volume of patented medicines sold, as well as a rise in the sales of more expensive medicines. At the same time, some key, top-selling medicines stopped reporting sales to the PMPRB, and as a result, the total spending on patented medicines decreased slightly by 0.6%. Canadian list prices of patented medicines remained among the highest in the Organisation for Economic Co-operation and Development (OECD) countries, ranking fourth, well behind the US and marginally less than Germany and Switzerland.

The PMPRB is responsible for reporting on trends in pharmaceutical sales and pricing for all medicines and for reporting research and development spending by patentees.

Under the Regulations, patentees are required to submit detailed information on their sales of patented medicines, including quantities sold, gross and net prices, and net revenues. The PMPRB uses this information to analyze trends in the sales, prices,^{Footnote 5} and use of patented medicines.^{Footnote 6} This section provides key trends, including analyses of Canadian national, public, and private payer markets for all medicines. Note that any reference to sales in this section should be interpreted as sales revenues unless otherwise noted.

$16.7 Billion Sales in Patented Medicines in 2018

Sales of patented medicines have grown by an average of 4.9% per year over the last five years.

Disclaimers

1. Although select statistics reported in the KEY PHARMACEUTICAL TRENDS section are based in part on data obtained under license from the IQVIA MIDAS^® database and the IQVIA Private Pay Direct Drug Plan Database, the statements, findings, conclusions, views, and opinions expressed in this Annual Report are exclusively those of the PMPRB and are not attributable to IQVIA.
2. To provide a broader perspective on pharmaceutical trends in Canada, summaries of the results of NPDUIS analyses have been included as additional “Brief Insights” throughout the Pharmaceutical Trends section of the Annual Report. A variety of public and licensed data sources are used for NPDUIS analytical studies. Many of these sources do not differentiate between patented and non-patented generic medicines; in these instances, the general term “generic” is used to include both. NPDUIS is a research initiative that operates independently of the regulatory activities of the PMPRB.

Trends in Sales of Patented Medicines

Canadians spend much more on patented medicines today than they did a decade ago. Over the last five years, sales of these medicines grew by an average of 4.9% per year, reaching $16.7 billion in 2018. This section looks at the most important factors driving the change in sales revenues from 2017 to 2018 and compares them to trends from previous years.

Trends in Sales Revenues

In 2018, the sales of patented medicines remained relatively unchanged, decreasing slightly by 0.6% from the previous year. Figure 3 reports on trends in the sales of patented medicines from 1990 to 2018. While annual sales have increased approximately 10-fold since 1990, the year-over-year rate of change within that period has varied. This trend is highlighted by the five-year compound annual growth rate given in Figure 3(b).

Figure 3(a) gives the sales of patented medicines as a share of overall medicine sales. This share, which reached a peak of 72.7% in 2003, declined from 2004 to 2010. Since then, patented medicines have accounted for approximately 60% of the sales of all medicines in Canada.

The trend in sales per capita and sales as a percentage of the gross domestic product (GDP) show the increasing importance of patented medicines in the Canadian economy. Overall, patented medicine per capita sales rose from $61.60 in 1990 to $446.30 in 2018, while sales as a percentage of GDP rose from 0.25% in 1990 to 0.75% in 2018 [Figure 3(c)].

To highlight the continuing impact of patented medicines, Figures 3(a) and 3(b) also provide results for “All PMPRB Medicines”. This broader category includes all medicines, current and historic, that ever reported sales to the PMPRB (since its creation).

In 2018, medicines that previously reported to the PMPRB accounted for estimated sales of $3.3 billion, or 11.6% of all sales. This is a marked increase over the previous year and considerably more than a decade ago when medicines that formerly reported to the PMPRB accounted for $0.7 billion in sales, or 3.2% of all sales

It is noted that the sales for All PMPRB Medicines rose by 6.5% in 2018, as compared to the decline of 0.6% observed among Current Patented Medicines. This is due to a handful of medicines that stopped reporting to the PMPRB in 2018, including Remicade, the highest-selling prescription medicine in Canada. Historically, patented medicines have experienced a substantial erosion in market share upon loss of patent protection; however, recently that same effect has not been observed in a number of very high-cost, biologic medicines that have come off patent.

A complete table of the data presented in Figure 3 for patented medicines currently reporting to the PMPRB is given in Appendix 3.

Figure 3. Trends in Patented Medicine Sales, 1990 to 2018

Drivers of the Growth in Sales Revenues

The growth in the sales revenue of patented medicines is influenced by changes in several key factors:

• Volume effect: changes in the quantity or amount of patented medicines sold. This effect focuses on established medicines that were on the market for the whole period. Increases in the population, changes in demographic composition (e.g., shifts in the age distribution), increases in the incidence of disease, and changes in prescribing practices are among the factors that may contribute to this effect.
• Mix effect: shifts in use between lower- and higher-cost patented medicines. This effect applies to both new medicines and those that were already on the market. The switch to new higher-priced medicines, the use of new medicines that treat conditions for which no effective treatment previously existed, and changes in physician prescribing practices are among the factors that may contribute to this change.
• Exiting effect: previously patented medicines that have stopped reporting sales revenue to the PMPRB or are no longer sold in Canada.
• Loss-of-exclusivity effect: medicines that have lost market exclusivity and are open to some level of generic competition, but still patented.
• Price effect: changes in the prices of existing patented medicines. This effect applies to both increases and decreases in the prices of patented medicines over the time period analyzed.

Some factors, such as the mix effect, will generally put an upward pressure on sales, while others, such as the loss-of-exclusivity effect, have the opposite effect.

The net result of all of the combined effects is the annual change in sales.

Occasionally the emergence of a new “blockbuster” medicine will have a significant influence on sales and will be monitored as a separate effect. For example, direct-acting antiviral (DAA) treatments for hepatitis C have had a notable impact on patented medicine sales over the past few years. Their greatest contribution was in 2015 when they pushed overall sales upward by almost 5%. Although their contribution to sales growth was more modest in 2018 they may continue to have an impact in the coming years, as new DAA medicines enter the market and as the extent of coverage offered by insurers expands.

Figure 5 focuses on the major factors that drove the year-by-year growth in patented medicine sales^{Footnote 7} between 2014 and 2018 (a) in absolute dollar amounts, and (b) as proportions of the overall annual change in sales.

Changes in the prices of patented medicines played a very minor role in the growth in patented medicine sales over the last five years, suggesting that, on average, the prices of existing patented medicines are fairly stable. However, this does not reflect the overall increases in treatment costs due to the entry of newer, higher-priced patented medicines (captured by the mix effect).

The results show that strong sales for new patented medicines and existing higher-cost patented medicines were the major contributors to sales growth over the five-year period. In 2018, the overall increase in the use of patented medicines, as well as higher-cost patented medicines, put a greater upward pressure on sales than in previous years. These factors will be analyzed in more detail in the upcoming sections.

Figure 5. Key Drivers of Change in the Sales of Patented Medicines, 2014 to 2018

Counterbalancing this upward pressure, there was a significant market segment shift in 2018, as a number of high-selling medicines no longer reported their sales to the PMPRB. These included high-cost medicines and/or medicines with high utilization. In total, medicines accounting for $1.8 billion in expenditures exited the patented sales space in 2018, with Remicade alone accounting for over half of the total amount.

The exiting effect was significantly higher in 2018 than in previous years, offsetting increases in reported sales and resulting in a slight decrease in overall sales growth. Figure 6 illustrates the change in the impact of the exiting effect over the last five years and identifies the top-selling medicines that stopped reporting to the PMPRB in 2018.

New Medicines Driving Sales Revenues

Figure 8 breaks down 2018 sales of patented medicines according to the year in which the medicine was first issued a Notice of Compliance (NOC) by Health Canada and approved for market in Canada. Throughout the latter part of the 1990s and early 2000s, sales growth was largely driven by a succession of new “blockbuster” medicines that ultimately achieved very high sales volumes. As the patents for these medicines expired, their share of sales gradually decreased. Recently introduced higher-cost medicines such as biologics, oncology medicines, and treatments for hepatitis C are increasingly accounting for a growing share of sales.

Higher-Cost Medicines Driving Sales Revenues

Over the last decade, there has been a significant shift in pharmaceutical development toward more specialized medicines, with an increasing number of higher-cost medicines entering the market and gaining a significant market share.

In 2018, the shift to new or higher-cost medicines put an upward pressure on overall patented medicine sales. The top 10 contributors increased the sales of patented medicines by over $900 million between 2017 and 2018 (Table 7). Most of these medicines had an average annual treatment cost greater than $10,000.

While Table 7 reports the top 10 medicines contributing to the increase in the sales of patented medicines, Table 8 compares the 10 top-selling patented medicines in 2006 and 2018, along with their treatment costs. In 2006, Remicade was the only biologic medicine to make the top 10 list, with an average annual treatment cost of $17,759. This was much higher than the rest of the medicines on the list, none of which exceeded $1,000 annually. By 2018, however, half of the top 10 medicines were biologics, with annual treatment costs ranging from $9,207 to $37,637. Of the remaining 10 top sellers in 2018, only three had annual treatment costs of less than $1,000, and the highest treatment cost exceeded $60,000. With collective annual sales of approximately $3.8 billion, these 10 medicines accounted for close to one quarter of the total sales for all patented medicines in 2018.

Figure 10 details the trend in treatment costs for patented medicines over the last decade. For many years, the majority of the 20 top-selling patented medicines had annual treatment costs under $1,000; however, 2015 marked a turning point, and now most of the top sellers cost in the thousands or tens of thousands of dollars per year. This shift is reflected in the exceptional 10-fold growth in the median annual treatment cost between 2006 and 2015, which was $5,163 in 2018 after reaching a high of $8,584 in 2016. In addition to their higher cost, these medicines have had a strong uptake in use, resulting in a weighted average annual treatment cost of $18,414 for the 20 top-selling patented medicines in 2018. This is only slightly less than the maximum average annual treatment cost a decade before.

Figure 11 shows that high-cost medicines represent an increasingly significant share of the total sales of patented medicines, rising steeply from 5.0% in 2006 to 42.1% in 2018. This sustained growth was evident in all cost bands ($10 to $20 thousand; $20 to $50 thousand; and $50+ thousand), with a steep increase in the higher-cost medicines. Despite the sharp increase in the share of costs, less than 1% of the population use these medicines.

Between 2006 and 2018 the number of patented medicines in Canada with an annual average treatment cost of at least

$10,000 more than tripled and now high-cost medicines account for over 40% of patented medicine sales as compared to 5% in 2006.

The shift toward higher-cost treatments is especially evident in oncology medicines. Figure 12 shows the share of total sales for patented oncology medicines by treatment cost based on a standard 28-day treatment regimen.

From 2006 to 2018, the average treatment cost for oncology medicines more than doubled, from $3,555 to $7,152. Many treatment regimens use multiple medicines resulting in even higher treatment costs per beneficiary. There may be some overlap in the medicines reported in Figures 11 and 12, as the oncology medicines that exceeded $10,000 in annual treatment costs are reported in both graphs.

The dual pressures of increasing average treatment costs and growing utilization mean that this therapeutic area is likely to continue to grow as a proportion of patented medicine sales.

Top Therapeutic Classes Driving Sales Revenues

“Antineoplastics and immunomodulating agents,” “general antiinfectives for systemic use and antiparasitic products,” and “alimentary tract and metabolism” were the three top-selling therapeutic classes in 2018, accounting for 60% of all patented medicine sales. After experiencing double-digit growth in 2017, sales for the top-selling “antineoplastics and immunomodulating agents” class decreased in 2018, as some important medicines stopped reporting sales to the PMPRB.

In 2018, 6 of the 10 top-selling medicines

had annual treatment costs exceeding $10K

Figure 14 breaks out the sales of patented medicines in Canada by therapeutic class using level 1 of the World Health Organization’s (WHO) Anatomical Therapeutic Chemical (ATC) classification system^{Footnote 8}. Two donut graphs compare the share of total sales for each therapeutic class in 2018 to the share in 2008. The associated table gives the 2018 sales for each class and the sales growth from 2017 to 2018.

The “antineoplastics and immunomodulating agents” class accounted for a much larger share of sales in 2018 (33.7%) than in 2008 (15.6%), as more high-cost medicines entered the market over the past decade. By contrast, the share of sales of cardiovascular system medicines decreased dramatically from 24.5% to 3.8%.

Biologic medicines

Biologic medicines, the majority of which are in high-cost categories, have been capturing an increasing share of the Canadian market, from 16% of patented medicine sales in 2008 to 39% in 2018. In 2018, Humira, Eylea, and Enbrel were the top-selling biologics, collectively accounting for almost 10% of all patented medicine sales. Figure 15 breaks down the annual growth in biologic patented medicine sales by major therapeutic class.

Although the share of biologic medicine sales has increased in many therapeutic classes, immunosuppressants had the highest uptake over the last decade, growing from 4% of total patented medicine sales in 2008 to 17% in 2017, primarily driven by the sales of three medicines: Remicade, Humira, and Enbrel.

However, in 2018, the immunosuppressant share of patented medicine sales decreased from 17% to 13%, as top-selling medicine Remicade stopped reporting to the PMPRB. Although the sales of these medicines continued to have a noteworthy impact on the overall Canadian pharmaceutical market, they were no longer captured in PMPRB data. In 2018, the overall biologics share of patented medicine sales dropped from 42% to 39% due to the exiting effect of these important medicines. The share of all other major classes of biologics remained the same as in 2017, except for oncology medicines, which represent a steadily growing share of the market.

Oncology medicines

Figure 18 illustrates the growth in the sales of all oncology medicines (biologic and non-biologic) over the last decade. Oncology medicines now account for 20.7% of total patented medicine sales, a substantial increase from 5.4% in 2008. Oral forms of cancer treatment are a noteworthy emerging segment, increasing their share of the patented medicine market from 1.7% to 9.2% over the same period. Revlimid was the top-selling oncology medicine, accounting for 2.5% of all patented medicine sales.^{Footnote 9}

Price Trends

The PMPRB uses the Patented Medicines Price Index (PMPI) to monitor trends in the prices of patented medicines. The PMPI measures the average yearover- year change in the ex-factory prices of patented medicines sold in Canada using a sales-weighted average of price changes at the level of individual medicines.^{Footnote 10} This is similar to the approach Statistics Canada uses to construct the Consumer Price Index (CPI). The PMPI is based on an average transaction price and sales information submitted by patentees for a six-month period.

The PMPI only measures the sales growth attributable to changes in the prices of patented medicines. It does not measure changes in the use of patented medicines; this is measured by the quantity index or PMQI (see the Utilization of Patented Medicines section). Nor does it measure the cost impact of changes in prescribing patterns or the introduction of new medicines.

The Patent Act requires the PMPRB to consider changes in the CPI, among other factors, in determining whether the price of a patented medicine is excessive. Figure 19 compares year-over-year changes in the PMPI to corresponding changes in the CPI from 2003 to 2018. The PMPI is reported based on two measures: the national average transaction price, a “net” price which includes rebates and discounts; and the national list price, a “gross”price. Both measures are reported to the PMPRB by patentees. General price inflation, as measured by the CPI, has exceeded the average increase in the prices of patented medicines almost every year since 2003. In 2018, the CPI rose by 2.3%, while the PMPI increased by 0.1%.

It is not surprising that the PMPI has seldom kept pace with the CPI. The PMPRB’s Guidelines envisage that the price of a patented medicine should not rise by more than the CPI over any three-year period.^{Footnote 11} (The Guidelines also contemplate a cap on year-over-year price increases equal to one and one-half times the current year rate of CPI inflation.) This effectively establishes CPI inflation as an upper bound on the amount by which individual prices could rise over any three-year period. Increases in the PMPI normally do not reach this upper bound because many patentees do not raise their prices by the full amount envisaged under the Guidelines.

Patented medicine prices increased less than CPI

In 2018, the increase in patented medicine prices was, on average, less than the rate of inflation, as measured by the Consumer Price Index (CPI), and therefore, did not contribute to sales growth.

Price Behaviour After Introduction

Does the price of a typical patented medicine change much in the years after it enters the Canadian market? To answer this question, Figure 20 provides the average ratio of the 2018 price to introductory price (the price at which the medicine was sold in its first year on the Canadian market).

The results in Figure 20 suggest a consistent trend: prices remain stable early in their life cycle, and then gradually rise by a small amount, year-over-year, afterwards. This is consistent with the effect of the PMPRB’s CPI methodology.^{Footnote 12} For example; average prices of medicines introduced a decade ago are still at the same level in 2018.

Price Change by Country

In accordance with the Act and the Regulations, patentees must report publicly available prices of patented medicines for seven foreign comparator countries (PMPRB7): France, Germany, Italy, Sweden, Switzerland, the United Kingdom (UK), and the United States (US).

The PMPRB uses this information:

• to conduct international price comparison tests; and
• to compare the Canadian prices of patented medicines to those prevailing in other countries.

Figure 21 gives the average annual rates of price change for Canada and each of the PMPRB7 countries. These results were obtained by applying the PMPI methodology (with weights based on Canadian sales patterns) to the international price data that patentees submitted to the PMPRB. Note that prices from the US Federal Supply Schedule (FSS)^{Footnote 13} are incorporated into the US results.

In 2018, US prices rose by an average of 5.9%, while prices in all other countries declined. Germany saw the greatest decrease, at -10.5%. These results are consistent with a long-term tendency for patented medicine prices to slowly fall over time in most comparable countries (with the exception of the US).

The foreign market results are based on publicly available gross prices, namely ex-factory price information (generally for the retail customer class) submitted by patentees to the PMPRB. The Canadian rate of change, however, is based on net prices, namely actual average transaction prices net of rebates and discounts provided by manufacturers to their direct customers.

Comparison of Canadian Prices to Foreign Prices

Tables 9 and 10 provide detailed statistics comparing the foreign prices of patented medicines to their Canadian prices. Each table provides two sets of average price ratios. These are differentiated according to the method by which foreign prices were converted to their Canadian dollar equivalents. The tables also give the numbers of strengths and dosage forms of medicines (DINs) and the volume of sales encompassed by each reported price ratio.^{Footnote 14}

The average price ratios given in Tables 9 and 10 are sales-weighted arithmetic means of price ratios obtained for individual DINs, with weights based on Canadian sales patterns. Average price ratios constructed in this way provide answers to questions such as:

How much more/less would Canadians have paid for the patented medicines they purchased in 2018 had they paid Country X prices rather than Canadian prices?

For example, Table 9 states that the 2018 average France-to-Canada price ratio was 0.74. This means Canadians would have paid 26% less for the patented medicines they purchased in 2018 if they had paid French prices.

For many years, the PMPRB has reported average foreign-to-Canadian price ratios with foreign prices converted to their Canadian dollar equivalents by means of market exchange rates. (More exactly, the 36-month moving averages of market rates the PMPRB normally uses in applying its Guidelines.) Tables 9 and 10 also report foreign-to-Canadian price ratios with currency conversion at purchasing power parity (PPP). The PPP between any two countries measures their relative costs of living expressed in units of their own currencies. In practice, cost of living is determined by pricing out a standard “basket” of goods and services at the prices prevailing in each country.

Because PPPs are designed to represent relative costs of living, they offer a simple way to account for differences in overall national price levels when comparing individual prices, incomes, and other monetary values across countries. When applied to the calculation of average foreign-to-Canadian price ratios they produce statistics answering questions such as:

How much more/less consumption of other goods and services would Canadians have sacrificed for the patented medicines they purchased in 2018 had they lived in Country X?

Questions of this type cannot be answered by simply comparing the prices of medicines. Rather, one must first calculate what each price represents in terms of goods and services foregone. PPPs are designed for such purposes.

Bilateral Price Comparisons

Table 9 provides bilateral comparisons of prices in each of the PMPRB7 countries to corresponding Canadian prices. Focusing on the results with currency conversion at market exchange rates, it appears that, as in previous years, Canadian prices were typically within the range of prices observed among the comparator countries. Prices in France were appreciably lower than Canadian prices, followed by Sweden and Italy. Prices in the UK were equivalent to those in Canada, while prices in Germany and Switzerland were higher. As in previous years, prices reported for the United States were much higher than prices in Canada or any other comparator country.

Table 9. Average Foreign-to-Canadian Price Ratios, Bilateral Comparisons, 2017

It is important to note that it is not always possible to find a matching foreign price for each and every strength and dosage form of a patented medicine sold in Canada. Table 9 displays how often an international price comparison was available for each of the comparator countries. For example, out of 1,392 DINs for patented medicines reported as under the PMPRB’s jurisdiction in 2018, a publicly available ex-factory price for France was available 48% of the time, whereas for the US the number was 77%. Given the integrated nature of the Canadian and US supply chain, it is not uncommon for the US to be the only comparator country with an available price for a strength and dosage form of a medicine sold in Canada. In this case, it is considered to constitute the international median price, as per the PMPRB’s methodology.

Average price ratios obtained with currency conversion at PPPs tell the same story. When international differences in the cost of living are considered, it appears that Canadians incurred a larger consumption cost for the patented medicines they purchased in 2018 than did residents of France, Sweden, Switzerland, and the UK.

Figure 22 puts these results in historical perspective. In 2008, Canadian prices were, on average, slightly higher than prices in Italy, France, Sweden, and the UK, and approximately the same as prices in Switzerland. By 2018, the gap between Canadian prices and prices in France and Sweden had grown slightly greater as the relative prices in these countries dropped, while the prices in Italy and the UK in 2018 were more in line with Canadian levels. Price levels in Switzerland, Germany, and the US all exceeded those in Canada in 2018.

If the patented medicine is being sold in one or more of the PMPRB7 countries, the patentee must report the publicly available ex-factory prices to the PMPRB for each class of customer.^{Footnote 15} In order to assess how Canada compares to a basket of countries beyond the PMPRB7, Figure 23 uses Canadian and international prices reported in the IQVIA MIDAS^® database at the ex-factory manufacturer level, reflecting all sales to the pharmacy and hospital sectors.

The international price comparisons reported in Figure 23 provide a bilateral price comparison using all countries in the OECD with available MIDAS^® data. The average foreign-to-Canadian price ratios are calculated using the same approach employed to produce the ratios presented in Figure 22. These are Canadian sales-weighted arithmetic averages of the corresponding foreign-to-Canadian price ratios for individual medicines.^{Footnote 16} As shown in Figure 23, median OECD prices are, on average, approximately 17% below price levels in Canada, which are the fourth highest among the 31 countries. Notably, the top three highest-priced countries are the US, Germany, and Switzerland.

Multilateral Price Comparisons

Table 10 provides average foreign-to-Canadian price ratios using several multilateral measures of foreign prices. The median international price (MIP) is the median of prices observed among the PMPRB7. Other multilateral price ratios compare the minimum, maximum, and simple mean of foreign prices to their Canadian counterparts.

Focusing again on the results based on market exchange rates, the average MIP-to-Canadian price ratio was 1.20 in 2018, lower than the 1.26 ratio in 2017 (Figure 26). Note that mean foreign prices produce higher foreign-to-Canadian price ratios than do MIPs. This is due to the influence of US prices, which are typically much higher than prices elsewhere. Although US prices nearly always figure importantly in determining the mean foreign price, they have less impact on median international prices. Nevertheless, the US does exercise a significant influence over the average ratio of median international prices relative to Canadian prices, as the US is sometimes the only country with an available ex-factory price for a patented medicine sold in Canada.

Figure 27 provides alternate results for the average MIP-to-Canadian price ratio at market exchange rates in 2018. To address the point that Canadian prices are national average transaction prices whereas foreign prices are list prices, a list price to list price ratio is also calculated. Using this method, the average ratio decreases from 1.20 to 1.07. It is important to keep in mind that confidential rebates provided to payers are currently not captured in this data.

To account for the large impact of US prices in determining the median foreign price, a ratio excluding the US and a ratio including at least five countries in the calculation of the median are also provided in Figure 27.

With these restrictions, the average MIP-to-Canadian price ratios drop to 0.87 and 0.91, respectively, suggesting that median foreign list prices are, on average, 13% to 9% lower than Canadian list prices. In many of the comparator countries, discounts off list prices are available to all payers, both public and private. By contrast, a large portion of the Canadian market pays list prices, or close to list prices. Furthermore, it should be noted that these are average ratios—some patentees charge Canadian consumers less than median international prices, while others charge more. For patentee level median-to-Canadian price ratios, please refer to Table 21 in Appendix 4 of this report.

Figure 28 offers more detail on the medicine-level MIP-to-Canadian ratios underlying the averages reported in Table 10. This figure distributes the 2018 sales of each patented medicine according to the value of its MIP-to-Canadian price ratio (more exactly, according to the range into which the ratio fell).^{Footnote 17} These results show substantial dispersion in medicine-level price ratios: while patented medicines with MIP-to-Canadian price ratios between 0.90 and 1.10 accounted for 32.5% of sales, those with ratios less than 0.90 accounted for 37.1% of sales, and medicines with ratios exceeding 1.10 accounted for 30.4%.

In 2018, approximately 50% of Canadian patented medicines were priced above the median international level.^{Footnote 18} Table 11 shows which therapeutic categories in particular are priced above the median international levels in Canada. Medicines that share the fourth level ATC (“ATC4”)^{Footnote 19} are grouped to identify distinct chemical/ pharmacological/therapeutic subgroups, allowing for a calculation of the average MIP-to-Canadian price ratios among medicines that may be used to treat the same conditions. Table 11 identifies the top 10 ATC4s in 2018 in which the difference between Canadian and median prices had the largest effect on Canadian patented medicine spending. For example, had Canadian prices been in line with the international median for these classes of medicines in 2018, sales in Canada would have been reduced by over $1 billion (an average reduction of 22% for these ATC4s). Of the 149 DINs classified into these 10 ATC4s, 63% were priced above the median international price.

Canada is a Top 10 Global Market

Canada is an important market for pharmaceuticals representing 2.1% of worldwide sales. Canada spends approximately the same amount as the UK on pharmaceuticals despite having only half its population.

Utilization of Patented Medicines

The price and sales data used to calculate the PMPI also allow the PMPRB to examine trends in the quantities of patented medicines sold in Canada. The PMPRB maintains the Patented Medicines Quantity Index (PMQI) for this purpose. Figure 29 provides average rates of utilization growth, as measured by the PMQI, from 1988 through 2018. These results confirm that in recent years, growth in the utilization of patented medicines has been a primary source of rising sales.

Canadian Medicine Expenditures in the Global Context

IQVIA^{Footnote 21} regularly reports on medicine sales across a large number of countries. Based on sales data from this source, Figure 30 provides shares of global sales for Canada and other major national markets including the PMPRB7 countries.^{Footnote 22} The Canadian market accounted for 2.1% of the global market in 2018.

Figure 31 provides Canada’s share of global sales for 2005 to 2018. The Canadian share has remained between 1.9% and 2.7% throughout this period. Although 2.1% is at the low end for Canada’s average share of global sales in recent years, the US share grew from 40.4% in 2014 to 44.5% in 2018, resulting in declining shares for all other major countries.

1.8% Medicine expenditures in Canada

In 2016, Canadians spent 1.8% of gross domestic product on medicines. This is the 2nd highest share in the PMPRB7, behind only the United States.

Figure 32 gives the average annual rate of growth in total medicine sales for Canada and the PMPRB7, individually and collectively. From 2005 to 2018, medicine sales in Canada rose at an average annual rate of approximately 4.6%. This is less than the average rate of growth in medicine sales among the PMPRB7 countries over the same period, though it is clear from the figure that this growth rate is heavily skewed by the influence of US sales.

Figure 33 compares rates of year-over-year growth in medicine sales for the entire pharmaceutical market in Canada and the PMPRB7 countries combined. In 2018, sales grew at a slightly faster rate in Canada than in the other PMPRB7 countries. This growth includes medicines that are no longer reporting to the PMPRB, such as Remicade.

The proportion of national income allocated to the purchase of medicines provides another way to compare medicine costs across countries.^{Footnote 23} Figure 34 gives medicine expenditures as a share of gross domestic product (GDP) for Canada and the PMPRB7 countries based on data for 2016. Medicine expenditures absorbed between 1.1% and 2.1% of the GDP in the PMPRB7. The Canadian value of 1.8% was second only to the US.

Table 12 provides a historical perspective on the expenditures-to-GDP ratio.^{Footnote 24} In 2005, Canada’s ratio was fourth highest of the PMPRB7. Since that time, Canada’s ratio has risen, while the ratios of three other countries (France, Italy, and Sweden) have declined. In 2016, Canada had the third highest spending per capita on medicines compared to the PMPRB7, 26% higher than the median of these countries.

Table 13 gives the composition of patentees’ sales by therapeutic class for Canada and PMPRB7, individually by country and as an aggregate.^{Footnote 25} The results suggest a remarkable degree of similarity across countries.

National Prescription Drug Utilization Information System: Supporting Health Care Decision Making in Canada

How medications are used—where, by whom, and for what—has an impact on the amount that we spend on medicines. The PMPRB contributes to Canada’s understanding of medicine usage through the National Prescription Drug Utilization Information System (NPDUIS) initiative, generating comprehensive, accurate information to help guide decision making and support continued sustainability of our pharmaceutical system.

Background

NPDUIS is a research initiative established by federal, provincial, and territorial Ministers of Health in September 2001. It is a partnership between the PMPRB and the Canadian Institute for Health Information (CIHI).

At the request of the Minister of Health pursuant to section 90 of the Patent Act, the PMPRB has the mandate to conduct analysis that provides decision makers with critical information and intelligence on price, utilization, and cost trends of patented and non-patented prescription medicines. This ensures that Canada’s healthcare system has more comprehensive and accurate information on how medicines are being used and on sources of cost pressures.

The specific research priorities and methodologies for NPDUIS are established with the guidance of the NPDUIS Advisory Committee and reflect the priorities of the participating jurisdictions. The Advisory Committee is composed of representatives from public drug plans in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, the Non-Insured Health Benefits (NIHB) Program, and Health Canada. It also includes observers from CIHI, 54 PATENTED MEDICINE PRICES REVIEW BOARD the Canadian Agency for Drugs and Technologies in Health (CADTH), the Ministère de la Santé et des Services sociaux du Québec (MSSS), and the pan-Canadian Pharmaceutical Alliance (pCPA) Office.

NPDUIS operates independently of the regulatory activities of the PMPRB. NPDUIS reports do not contain information that is confidential or privileged under sections 87 and 88 of the Patent Act.

Highlights

Since the release of the last Annual Report, the PMPRB has published eight analytical reports, one Chartbook, and six posters under the NPDUIS banner.

Published Reports:

• Generics360: Generic Drugs in Canada, 2016 (February 2018)
• Meds Entry Watch, 2016 (June 2018)
• CompassRx, 4th Edition, 2016/17 (September 2018)
• Market Intelligence Report: Anti-Vascular Endothelial Growth Factor (Anti-VEGF) Drugs for Retinal Conditions, 2017 (December 2018)
• Meds Entry Watch, 2017 (February 2019)
• Meds Pipeline Monitor, 2018 (May 2019) [formerly the New Drug Pipeline Monitor]
• Generics360 : Generic Drugs in Canada, 2018 (August 2019)
• CompassRx, 5th Edition, 2017/18 (September 2019)

Chartbook

• The market for prescription oral solid opioids, 2010 to 2017 (January 2019)

Poster Presentations:

• Generic Drug Pricing in Canada: Closing the Gap
• Uncovering the Forces Driving Costs in Canada’s Public Drug Plans, 2017/18
• The Oncology Drug Market: a High-Growth, High-Price Therapeutic Area
• Combination Asthma Inhalers in Canada: Locked on High Prices
• Alignment of Oncology Drug Coverage Across Canada
• Pressures Behind the Rising Costs in Canadian Private Drug Plans, 2018

In addition, the NPDUIS conducted a number of ad hoc studies at the request of the NPDUIS participating jurisdictions.

The PMPRB continued to support and strengthen its NPDUIS engagement activities by regularly consulting with the NPDUIS Advisory Committee, participating in conferences and stakeholder committees, and organizing information sessions with interested stakeholders to share the results of the analytical studies.

Research Agenda

In 2018, the PMPRB introduced a series of short, graphic-based analyses called Chartbooks. The first, released in January 2019, focused on the market for prescription oral solid opioids in Canada and the United States. Topics for upcoming analyses include an overview of Canadian and international markets for biosimilars, expensive drugs for rare diseases (EDRDs), and oncology medicines.

The NPDUIS research agenda for the upcoming fiscal year also includes plans to publish the following analytical studies:

• Meds Entry Watch, 2018
• Meds Pipeline Monitor, 2019
• Market Intelligence Reports on (1) Combination Inhalers for Asthma, 2018; and (2) New Oral Antidiabetic Drugs, 2018
• Alignment among Public Formularies in Canada, Part 2: Oncology Drugs Assessed Through the pan-Canadian Oncology Drug Review (pCODR) Process.
• Private Drug Plans in Canada Part 2: Major Factors Driving Drug Costs and Dispensing Fees in Private Plans

Additional research topics may be pursued based on consultation with the NPDUIS Advisory Committee.

Analysis of Research and Development Expenditures: R&D Investment Falling Short of Target

Innovation is vital to advancing health care. In part, the provisions of Canada’s Patent Act are intended to foster an investment climate favorable to pharmaceutical research and development (R&D) in Canada. However, the ratio of R&D expenditures to sales revenues for pharmaceutical patentees in Canada has been falling since the late 1990’s and has been under the agreed-upon target of 10% since 2003. In 2018, it was at 4.0% for all patentees and 4.3% for members of Innovative Medicines Canada.

Analysis of Research and Development Expenditures

The Act mandates the PMPRB to monitor and report on pharmaceutical R&D spending. This chapter provides key statistics on the current state of pharmaceutical R&D investment in Canada.

4.0% R&D-to-Sales Ratio

The R&D-to-sales ratio for all patentees was 4.0% in 2018. This represents a 66% decrease from a peak of 11.7% in 1995.

Data Sources

The statistical results in this report were entirely derived from data submitted to the PMPRB by patentees.

The Act requires each patentee to report its total gross revenues from sales of all medicines for human or veterinary use (including revenues from sales of non-patented medicines and from licensing agreements) and R&D expenditures in Canada related to medicines (both patented and non-patented for human or veterinary use). Patentees transmit this information to the PMPRB by means of its Form 3 (Revenues and Research and Development Expenditures Provided Pursuant to subsection 88(1) of the Patent Act).

The Patented Medicines Regulations (Regulations) require that each submitted Form 3 be accompanied by a certificate stating the information it contains is “true and correct”. The Board does not audit Form 3 submissions, but it does review submitted data for anomalies and inconsistencies, seeking corrections or clarifications from patentees where necessary. To confirm that PMPRB staff has correctly interpreted the data submitted, each patentee is given the opportunity to review and confirm the accuracy of its own R&D-to-sales ratio before that ratio is published.

Failure to File (Form 3)

It is a patentee’s responsibility to ensure a complete and accurate Form 3 is filed within the time frame set out in the Regulations. If a patentee fails to meet these filing requirements, the Board may issue an Order demanding compliance. No such Board Orders were issued for the 2018 reporting period.

Coverage

Note that companies without sales of patented medicines do not need to report their R&D expenditures to the PMPRB. This has two implications:

First, the statistical results reported here should not be taken to cover all pharmaceutical research conducted in Canada. For example, a company may sell only non-patented medicines but may still perform considerable research in Canada. Similarly, a company may conduct research and have no medicine sales at all.^{Footnote 26} The results presented below will not reflect the R&D expenditures of firms in either situation.

Second, as new patented medicines come onto the Canadian market and existing relevant patents expire, the number and identity of companies required to file R&D data may change from year to year. In 2018, 93 companies reported on their R&D activity. Of these, 32 were members of Innovative Medicines Canada.

Definition of Sales Revenues

For reporting purposes, sales revenues are defined as total gross revenues from sales in Canada of all medicines and from licensing agreements (e.g., royalties and fees accruing to the patentee related to sales in Canada by licensees).

Definition of R&D Expenditures

Pursuant to section 6 of the Regulations, patentees are required to report R&D expenditures that would have qualified for an investment tax credit in respect to scientific research and experimental development (SR&ED) under the provisions of the Income Tax Act that came into effect on December 1, 1987.^{Footnote 27} By this definition, R&D expenditures may include current expenditures, capital equipment costs and allowable depreciation expenses. Market research, sales promotions, quality control or routine testing of materials, devices or products and routine data collection are not eligible for an investment tax credit and, therefore, are not to be included in the R&D expenditures reported by patentees.

Total Sales Revenues and R&D Expenditures

Table 14 provides an overview of reported sales revenues and R&D expenditures over the period 1988 through 2018.

Patentees reported total 2018 sales revenues of $22.7 billion, an increase of 7.2% from 2017. Sales revenues reported by Innovative Medicines Canada members were $16.8 billion, accounting for 74% of the total. (Less than 1% of reported sales revenues were generated by licensing agreements.)

Patentees reported R&D expenditures of $892.6 million in 2018, an increase of 2.4% over 2017. Innovative Medicines Canada members reported R&D expenditures of $723.0 million in 2018, a decrease of 4.3% over the previous year. Innovative Medicines Canada members accounted for 81% of all reported R&D expenditures in 2018.

R&D-to-Sales Ratios

Table 14 and Figure 35 also provide ratios of R&D expenditures to sales revenues. It should be noted that, with the adoption of the 1987 amendments to the Act, Innovative Medicines Canada made a public commitment to increase its members’ annual R&D expenditures to 10% of sales revenues by 1996.^{Footnote 28} This level of R&D expenditure was reached by 1993, with the ratio exceeding 10% in some years.

The ratio of R&D expenditures to sales revenues among all patentees was 4.0% in 2018, a slight decrease from 4.1% in 2017. The overall R&D-to-sales ratio has been less than 10% for the past 18 consecutive years.

The corresponding R&D-to-sales ratio for members of Innovative Medicines Canada was 4.3% in 2018, a decrease from 4.6% in 2017.^{Footnote 29} The Innovative Medicines Canada ratio has been less than 10% for the past 16 consecutive years.

Table 20 in Appendix 4 provides details on the range of 2018 R&D-to-sales ratios. Of the 93 companies reporting in 2018, 82.8% had R&D-to-sales ratios below 10%.

Current R&D Expenditures by Type of Research

Table 15 and Figure 36 (as well as Figure 38 in Appendix 4) provide information on the allocation of 2018 current R&D expenditures^{Footnote 30} among basic and applied research and other qualifying R&D.^{Footnote 31} Patentees reported spending $106.9 million on basic research in 2018, representing 12.3% of current R&D expenditures, a decrease of 2.0% over the previous year. Patentees reported spending $517.1 million on applied research, representing 59.2% of current R&D expenditures. Clinical trials accounted for 77.3% of applied research expenditures.

Current R&D Expenditures by Performer

Patentees report expenditures on research they conduct themselves (intramural) and research performed by other establishments, such as universities, hospitals, and other manufacturers (extramural). Table 16 shows that 49.2% of 2018 current research expenditures were intramural. Research performed by other companies on behalf of patentees made up 23.7% of current expenditures, while research conducted in universities and hospitals accounted for 18.5%.

The PMPRB7 Average R&D Ratio is 5 times Greater than in Canada

The R&D-to-sales ratio obtained by aggregating R&D spending and sales across all seven comparator countries was 23.5%, more than five times Canada’s.

Current R&D Expenditures by Region

Table 17 (as well as Table 22 and Table 23 in Appendix 4) show current R&D expenditures by region. As in previous years, current expenditures were heavily concentrated in Ontario and Quebec in 2018, with these provinces accounting for 80.1% of total expenditures. However, while current R&D expenditures increased at a modest year-over-year rate of 1.2% in Ontario and 1.0% in Quebec, they rose by 23.0% in Western Canada and 26.6% in the Atlantic Provinces.

Total R&D Expenditures by Source of Funds

Table 18 provides information on the sources of funds used by patentees to finance their R&D activity. Internal company funds remained by far the single largest source of funding in 2018, accounting for 91.0% of total expenditures. Funds received from government amounted to 0.5% of total expenditures.

The Global Context

Figure 37 compares Canadian pharmaceutical R&D-to-sales ratios for 2000 and 2016 to those in the PMPRB7.^{Footnote 32} In 2000, Canada had an R&D-to-sales ratio of 10.1%, lower than all other PMPRB7 countries except for Italy, at 6.2%. Switzerland had the highest ratio at 102.5%.

In 2016, Canada’s R&D-to-sales ratio was the lowest among the comparator countries at 4.4%. Italy had a slightly higher ratio of 5.7%, while all other PMPRB7 countries remained well above Canada. The ratio obtained by aggregating R&D spending and sales across all PMPRB7 countries was 23.5%, more than five times Canada’s.

The R&D-to-sales ratios represented in Figure 37 may be compared to the average bilateral price ratios reported in Table 9 (see the section on Comparison of Canadian Prices to Foreign Prices). A number of comparator countries with patented medicine prices that are, on average, lower than prices in Canada, have achieved much higher R&D-to-sales ratios.

As noted in previous annual reports, there are a multitude of factors that drive the location of pharmaceutical R&D. These include where companies can find the best science base at reasonable cost and ready access to a quality clinical trials infrastructure. Although price levels and intellectual property protection are often cited as an important policy lever for attracting R&D, the data has not supported this link domestically or internationally.

Appendix 1: Glossary

These definitions are provided for general assistance only; they have no legal force and should be read in conjunction with the applicable legislation.

Active Ingredient or Medicinal Ingredient: Chemical or biological substance responsible for the claimed pharmacologic effect of a medicine.

ATC: Anatomical Therapeutic Chemical (ATC) classification system, developed and maintained by the World Health Organization (WHO) Collaborating Centre for Drug Statistics Methodology, divides medicines into different groups according to their site of action and therapeutic and chemical characteristics. This system is used by the PMPRB as a guide for selecting comparable medicines for purposes of price review under the Guidelines.

Drug Identification Number (DIN): A registration number (drug identification number) that the Health Products and Food Branch of Health Canada assigns to each prescription and non-prescription drug product marketed under the Food and Drugs Regulations. A DIN uniquely identifies the following product characteristics: manufacturer; product name; active ingredient(s); strength(s) of active ingredient(s); pharmaceutical dosage form; route of administration.

Drug Product: A particular presentation of a medicine characterized by its pharmaceutical dosage form and the strength of the active ingredient(s) (see “medicine” below).

Failure to File: The complete or partial failure of a patentee to comply with regulatory filing requirements pursuant to the Patent Act and the Patented Medicines Regulations.

Failure to Report: The complete failure of a patentee to have reported a patented medicine being sold in accordance with regulatory filing requirements pursuant to the Patent Act and the Patented Medicines Regulations.

License, Voluntary: A contractual agreement between a patent holder and a licensee under which the licensee is entitled to enjoy the benefit of the patent or to exercise any rights in relation to the patent for some consideration (e.g., royalties in the form of a share of the licensee's sales).

Medicine: A medicinal ingredient and/or a substance or a mixture of substances manufactured, sold or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, in human beings or animals; or restoring, correcting or modifying organic functions in human beings or animals.

Notice of Compliance (NOC): Means a notice issued under section C.08.004 or C.08.004.01 of the Food and Drug Regulations. The issuance of an NOC indicates that a drug product meets the required Health Canada standards for use in humans or animals and that the product is approved for sale in Canada.

Patent: An instrument issued by the Commissioner of Patents in the form of letters patent for an invention.

Patented Medicine Price Index (PMPI): The PMPI was developed by the PMPRB as a measure of average year-over-year change in the transaction prices of patented medicines sold in Canada, based on the price and sales information reported by patentees.

Patentee: As defined by subsection 79(1) of the ?Patent Act, “the person for the time being entitled to the benefit of the patent for that invention and includes, where any other person is entitled to exercise any rights in relation to that patent other than under a license continued by subsection 11(1) of the Patent Act Amendment Act, 1992, that other person in respect of those rights;”

PMPRB7: France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the United States.

Research and Development (R&D): Basic or applied research for the purpose of creating new, or improving existing, materials, devices, products or processes (e.g., manufacturing processes).

Research and Development—Basic Research: R&D directed toward a specific practical application, comprising research intended to improve manufacturing processes, pre-clinical trials and clinical trials.

Research and Development—Other Qualifying: Includes eligible research and development expenditures that cannot be classified into any of the preceding categories of “type of research and development”. It includes regulatory submissions, bioavailability studies and Phase IV clinical trials.

Research and Development Expenditures: For the purposes of the Patented Medicines Regulations, in particular Sections 5 and 6, research and development includes activities for which expenditures would have qualified for the investment tax credit for scientific research and experimental development under the Income Tax Act as it read on December 1, 1987.

Research and Development Expenditures–Current: Consist of the following non-capital expenses that are directly related to research work: (a) wages and salaries, (b) direct material, (c) contractors and subcontractors, (d) other direct costs such as factory overhead, (e) payments to designated institutions, (f) payments to granting councils, and (g) payments to other organizations. These elements are described in greater detail in the Patentees' Guide to Reporting—Form 3, available from the PMPRB Website under Regulatory Filings.

Special Access Programme (SAP): A program operated by Health Canada to give practitioners access to medicines that are not approved or otherwise available in Canada.

Voluntary Compliance Undertaking (VCU): A written undertaking by a patentee to adjust its price to conform to the Board's Guidelines. A VCU represents a compromise between the PMPRB and the patentee as a result of negotiations between the parties geared towards a satisfactory resolution of an investigation initiated by Board Staff as per the Guidelines. A VCU takes into account the specific facts and underlying context of a particular case. As such, VCUs are not intended to have precedential value.

Appendix 2: Patented Medicines First Reported to the PMPRB in 2018

Appendix 3: Pharmaceutical Trends - Sales

Appendix 4: Research and Development