Due to the pressing challenges of COVID-19, Health Canada is giving drug companies six more months to prepare for major reforms to its 1987 Patented Medicines Regulations.
Announced last year, the reforms, which give Canada's Patented Medicine Prices Review Board (PMPRB) new tools to make prescription drugs more affordable, were supposed to go into effect July 1, 2020. According to a notice in Wednesday’s Canada Gazette, that start date is being pushed back to Jan. 1, 2021.
The delay will minimize the imposition of new administrative burdens on industry when drug manufacturers are facing increased demands related to supply chains and shortages and working to develop COVID-19 treatments and vaccines, Health Canada said.
The agency also noted that the later start date will give the PMPRB and stakeholders more time to complete the consultation process for guidelines implementing the changes. A public policy forum that had been scheduled in March for getting feedback on the draft guidelines had to be canceled due to the pandemic.
Included in the new tools the reforms give the PMPRB to determine when a drug price is excessive are the use of the actual market price rather than the list price and the authority to consider the value a drug offers to patients.
In addition, the amendments update the list of comparator countries to reflect those with similar consumer protection priorities, economic wealth and marketed medicines as Canada. That update will remove the U.S. as a price comparator. The realignment is expected to save Canadians about $13.2 billion over 10 years.
A third change is in reporting requirements related to pricing. While the reporting obligations will be reduced for certain generics with the lowest risk of excessive pricing, new reporting requirements will be in place for other prescription drugs.
Health Canada had expected payers would save CA$220 million (US$161.7 million) the first year the amendments went into effect. While the six-month delay may have some impact, Health Canada said it “anticipates that most of these savings will continue to occur as originally estimated.”
Since drug pricing strategies in Canada generally focus on more than a 10-year horizon, a six-month delay is unlikely to alter the overall pricing strategy for a drug, Health Canada said, adding that manufacturers presumably will anticipate their “nonexcessive” price in Canada, pricing new products accordingly.
Also, since manufacturers and public payers are aware that drugs obtaining a drug identification number after Aug. 21, 2019, will be subject to the new price regulatory factors, the reforms will be a consideration in long-term agreements, Health Canada said.