PMPRB Updates: Definition of “Gap Medicine” amended, modified threshold for investigating the price of new patented medicines

Smart & Biggar

Update: See our April 29, 2021 article reporting an update to compliance timelines for Grandfathered and Gap medicines. Further updates, including to the definition of “Gap medicine” are presently in consultation (see article here).

Consultation results

On March 17, 2021 the Patented Medicine Prices Review Board (PMPRB) announced the result of the Consultation opened in January (reported here) regarding the definition of “Gap Medicine” and compliance timelines for Grandfathered and Gap Medicines.

As proposed, the Guidelines will be amended such that a Gap Medicine will be defined as a medicine for which a Drug Identification Number (DIN) was assigned on or after August 21, 2019, and which was first sold in Canada by July 1, 2021. The PMPRB also clarified that a DIN must have been assigned to the medicine on or after August 21, 2019 but prior to July 1, 2021.

The PMPRB will similarly proceed with its proposed revision to the compliance timeline for Grandfathered and Gap Medicines, such that compliance with the Maximum List Price for Grandfathered and Gap Medicines will be assessed after one reporting period, rather than two. January 1, 2022 will therefore remain the operative date for assessing compliance.


Guidelines clarifications

In its February 2021 NEWSletter, the PMPRB clarified a number of aspects of the new Guidelines.

Notably, the PMPRB has decided that until there is clarity from the Quebec and Federal Courts of Appeal on the status of indirect rebates in the calculation of net Average Transaction Price, price tests that are based on the new excessive pricing factors alone will not give rise to an investigation for failure to comply with the Guidelines. Rather, the PMPRB will commence an investigation into the price of a new patented medicine only if it appears not to comply with the Maximum List Price as set by the PMPRB11 countries, or if a complaint is received.

The PMPRB additionally clarified aspects of the Guidelines relating to price reviews and investigations for COVID-19 vaccines, CPI adjustment factors, foreign price verification, exchange rates, GDP per capita, market size, and highlighted various substantive editorial changes.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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