Canada’s PMPRB drug pricing reforms face additional legal challenges

With the latest Quebec court ruling in favour of the pharmaceutical industry, the fate of certain provisions included in the new Patented Medicine Prices Review Board (PMPRB) Guidelines remains uncertain.

Canada PMPRB

The Quebec Court of Appeal in Canada has struck down two major provisions from the PMPRB drug pricing reforms anticipated to come into effect in July 2022. The court ruled that mandating disclosure of net prices/revenues (including confidential rebates) was unconstitutional, and invalidated the incorporation pharmacoeconomic factors to set price ceilings.

This follows previous similar rulings by a Federal Court and Quebec’s Superior Court back in 2020. Both also found the provisions regarding disclosure of confidential rebates through product listing agreements (PLA) in violation of the Patent Act. The provisions for net pricing remain in the new framework, however their implementation will be delayed until further notice while the Board addresses ongoing litigation.

The entire new PMPRB framework has been delayed multiple times since its initial July 2020 start date due to the COVID-19 pandemic. The latest extension issued by the new Minister of Health, Jean-Yves Duclos, noting that the “delay also allows the Government to further engage stakeholders on the application of these amendments within the changing pharmaceutical landscape”. It is possible that additional amendments or changes could be made to the Final Guidelines ahead of implementation later this year.

New PMPRB IRP basket upheld in court

Meanwhile, the major PMPRB changes to the International Reference Pricing (IRP) basket were upheld by the Quebec Court of Appeal, with the framework replacing the United States and Switzerland from the original PMPRB7 with other countries with traditionally lower list prices such as Australia, Belgium, and Japan. The new basket will have 11 reference countries.

So much uncertainty lies ahead for the pharmaceutical industry in Canada, but there is no doubt that the PMPRB reforms, if implemented, will have a significant impact on patented drugs, including lowering list prices that could extend beyond just Canada.

There are 11 countries that reference Canadian prices both formally and informally including Saudi Arabia, China, and Brazil.

Countries that reference Canadian Prices

Source: GPI pulse™ Atlas, 2022

By Margaret Labban, PhD, Pricing & Market Access Solutions Manager, Global Pricing Innovations

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