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Pharma industry concerned about recent PMPRB guidelines for IRP in Canada

Canada is due to adjust its international reference pricing (#IRP) basket of comparator countries come January, the 1st, 2021.

Canada is due to adjust its international reference pricing (#IRP) basket of comparator countries come January, the 1st,  2021. The change was announced by the PMPRB in the final version of new guidelines; after five years of extensive consultation. Reforms had been due to take effect in July 2020 but were delayed for further consultation in response to the COVID-19 pandemic. The pharma sector seems highly critical of the reforms and PMPRB’s decision to implement them in the middle of the current pandemic.

  • Canadian list prices will be compared to a new basket of International prices in 11 markets: Australia, Belgium, Japan, Netherlands, Norway, Spain, the UK, Sweden, France, the UK, and Italy;  which means that the US and Switzerland—both considered as higher-priced markets than Canada—will be removed.
  • Introduction of an initial screening process to identify drugs that are likely to be at higher risk of excessive pricing (“Category I” medicines), i.e. drugs that have a very high annual treatment cost (i.e. greater than 150% of GDP per capita) or are expected to capture a size-able share of the Canadian market (i.e. treatments that have estimated or actual sales of more than $50 million per year). This process offers the prospect of reductions of 20-50% off maximum list prices of treatments, depending on the level of therapeutic criteria.
  • A statutory mandate to ensure that prices charged by pharmaceutical companies for patented drugs sold in Canada are not ”excessive”, and to report on pharmaceutical trends and R&D spending by pharmaceutical patentees.

Industry is opposing the reforms:

The pharmaceutical industry seems highly critical of the reforms and PMPRB’s decision to implement them in the middle of the current pandemic. Manufacturers are also reported to be frustrated that the admittedly long consultation process had little impact on the final guidelines. Industry has highlighted that companies will avoid launching new treatments in Canada due to the current disincentives towards a lucrative price.

A potential reduction in the number of new treatments launching in Canada will not only have an impact on the pricing of medicines, specifically in markets referencing Canada, but in patient access worldwide as Canada is considered one of the most major markets from a commercial point of view.

What remains to be seen is the actual impact once the guidelines are implemented in real practice. 

To learn more about how we support bio-pharma keep up to date with the latest policy, regulatory and pricing & access updates please reach out at info@globalpricing.com

Blogpost by Dimitra Sotou, MIHP, Client Solutions Lead, GPI

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