The Canadian Life and Health Insurance Association (CLHIA) has submitted comments in response to a consultation the Patented Medicines Pricing Review Board (PMPRB) opened in November 2023 on the board’s new guidelines.

“Changes to the PMPRB’s guidelines are now necessary to implement the regulatory amendments and to give effect to the board’s commitment to modernize and simplify its administrative framework,” the scoping paper states. “This paper is for discussion purposes only and is not intended as a definitive articulation of the PMPRB’s position on these issues.” 

The board invited stakeholders to participate in policy round tables in early December and invited written submission in response to its questions until December 20.

“The PMPRB does not have the capacity nor the need to conduct hearings for each patented medicine under its jurisdiction. Therefore, the PMPRB seeks to develop an administrative review system that allows for the most efficient monitoring of cases of potential excessive pricing,” they write before asking which elements of the board’s guidelines should be retained and whether the new guidelines should continue to categorize medicines by therapeutic class.

The review also asks if the new guidelines should distinguish between medicines that existed prior to July 2022 and those introduced afterwards.

In its response to the board, the CLHIA strongly recommends the board adopt a price review mechanism for existing medicines, those existing prior to July 2022, rather than allow legacy pricing to remain in place. “We believe doing so is essential to capture market developments for prescription drugs and would protect consumers from excessive pricing,” they write. “We believe the PMPRB11 should apply to new medicines as well.” 

Other themes explored include price reviews during the product life cycle. The PMPRB notes that it is common in many countries for the list prices of medicines to decrease over time. “Canadian list prices, on the other hand, tend to remain static or increase,” the scoping paper adds. “As reported in the PMPRB Annual Report, in 2021 Canadian list prices of patented medicines were the third highest in the Organisation for Economic Co-operation and Development (OECD), behind only the U.S. and Switzerland.” 

The report also looks at how often price reviews should be conducted, the use of the Consumer Price Index (CPI) in the board’s evaluation, investigations and referrals to a hearing. “It is our ambition to finalize new guidelines during 2024, again following an appropriate consultation process,” they state.

According to the CLHIA’s response to the PMPRB, in 2022 insurers paid out more than $14.3-billion in coverage for prescription drugs in Canada. “Given the number of Canadians covered by private drug plans, we believe that private payers need to be included at the table if we are going to improve access to drugs for all Canadians,” they write. They also point out that the industry itself separately negotiates prices for many drugs.

The submission makes recommendations for criteria that might trigger a price review, it comments on investigations and hearing referrals and also discusses whether the PMPRB should continue using undertakings as an investigation closure mechanism.

“Excessively priced drugs are a risk to the sustainability of all drug plans in Canada. For this reason and others, we recommend that the work of the PMPRB, coordinated with other government agencies, should be aligned with private payers in order to obtain the best prices on patented drugs for Canadians.”