ARCHIVED - Patented Medicine Prices Review Board - Report

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Section II — Analysis of Program Activities by Strategic Outcome

Strategic Outcome

The Patented Medicine Prices Review Board (PMPRB) has one Strategic Outcome (SO): Canadians and their health care system are protected from excessive pricing for patented medicines sold in Canada and are informed on pharmaceutical trends.

The performance indicator for the strategic outcome is: Canada's prices on average are in line with the seven comparator countries listed in the regulations.

The target for the strategic outcome is: Canada's prices on average are at or below the median of international prices.

The strategic outcome is supported by three Program Activities (PA):

1. Compliance and enforcement of non-excessive pricing for patented medicines;
2. Pharmaceutical trends;
3. Internal services.

Program Activities

Program Activity 1: Compliance and enforcement of non-excessive pricing for patented medicines

2009-10 Financial Resources ($ thousands)			2009-10 Human Resources (FTEs)
Planned Spending	Total Authorities5	Actual Spending5	Planned	Actual	Difference
$7,045.0	$6,929.9	$4,724.2	45	31	14

Expected Result	Performance Indicator	Target	Performance Status	Performance Summary
Prices charged by patentees for patented medicines in Canada are not excessive according to the factors of the Patent Act.	Percentage of patented medicines that are within the Guidelines	95% of patented medicines are within the Guidelines.	Mostly met	The prices of 89.7% of patented medicines were within the Guidelines.

Performance Analysis

In 2009, Board Staff completed the review of the prices of 97.6% of patented drug products sold in Canada to determine conformity with the Board’s Guidelines. Of the 1,177 patented drug products under the Board’s jurisdiction, the prices of 89.7% were not excessive, 2.4% were under review, 7.6% were under investigation, and 0.3% were before a Board hearing. The overall level of compliance with the Board’s Guidelines has been declining in recent years (down from 95% in 2003 and 2004). The total number of investigations has been over 100 since 2007. Between January 1, 2009 and May 31, 2010, the PMPRB issued two Notices of Hearing. In the same period, 14 Voluntary Compliance Undertakings (VCU)⁶ were approved, three of which involved drug products that had been the subject of a Notice of Hearing.

Given that the Board’s Guidelines are the main tool to communicate the Board’s interpretation of the appropriate approach and methodology to give effect to its statutory mandate, the exercise to review the Guidelines has been critical. Following extensive and iterative input from all key stakeholders and detailed deliberations by the Board, the revised Guidelines (released in June 2009 and implemented on January 1, 2010) provide more clarity and transparency on the review process and create the potential for flexibility in unique situations likely to arise in today’s pharmaceutical environment. The PMPRB will undertake an evaluation of the application and impact of the changes made to the Guidelines. It is hoped that, in the longer term, patentees will increase their compliance with the Guidelines.

Lessons Learned

Patentees’ willingness and ability to comply with the Board’s Guidelines are influenced by the larger pharmaceutical and industrial environment. The PMPRB noted, as part of its Guidelines review, that there have been fewer breakthrough/blockbuster new drugs in recent years, with instead an increasing trend toward incremental innovation that may not increase efficacy but may provide other benefits. There has also been a trend toward more globalization in drug pricing. Many of these recent developments were the subject of extensive discussion and stakeholder input as part of the Guidelines review. The Board believes that the revised Guidelines are more appropriate in that they recognize some of these recent trends but also anticipate a range of drug product pricing situations.

Benefits for Canadians

Ensuring that the average net prices of patented drug products sold in Canada are not excessive contributes to the protection of the interests of Canadians and the Canadian health care system.

Program Activity 2: Pharmaceutical trends

2009-10 Financial Resources ($ thousands)			2009-10 Human Resources (FTEs)
Planned Spending	Total Authorities7	Actual Spending7	Planned	Actual	Difference
$1,593.0	$1,451.8	$670.7	13	5	8

Expected Result	Performance Indicators	Targets	Performance Status	Performance Summary
Stakeholders are more aware of pharmaceutical trends and cost drivers.	1. Number of requests for PMPRB publications 2. Number of events where the PMPRB participates	1. 5% increase in requests over previous year 2. 10 events per year	1. Mostly met 2. Exceeded	The number of requests for PMPRB publications has remained relatively stable over the last few years. The PMPRB participated in 28 events.

Performance Analysis

The number of requests for PMPRB publications remained stable over the last few years. The PMPRB continued to focus its efforts on increasing the visibility of its Web site and initiated a review of the Web site, including a monitoring system to measure access to Web pages. All PMPRB publications are posted on the Web. Subscriptions to its E-Bulletin are sought through, for example, the PMPRB’s quarterly publication. Its visibility and public awareness also continued to increase through, in part, the five-year-long consultation on the review of the Board’s Guidelines which was completed with the implementation of the new Guidelines in 2010. Those consultations have impacted all PMPRB external communication activities, including publications, events and access to the Web site, to name a few.

In 2009-2010, the PMPRB participated in 28 external events and addressed the participants at 19 of them. Three events were European conferences while the remaining 16 addressed a variety of audiences, including the PMPRB’s main stakeholders: patentees; provinces and territories; third party payers; and patient advocacy groups.

Lessons Learned

Stakeholders are increasingly relying on the PMPRB’s Web site to keep abreast of new developments and to access information on latest releases, scheduled publications, speeches and consultations. It is expected that requests for publications will decrease in the next year or two. The PMPRB will review the appropriateness of its current Performance Indicators and Targets for Expected Results under this Program Activity.

Benefits for Canadians

Through its external communications program, the PMPRB is reaching and informing a wider range of stakeholders on its regulatory activities and on pharmaceutical trends.

Program Activity 3: Internal Services

2009-10 Financial Resources ($ thousands)			2009-10 Human Resources (FTEs)
Planned Spending	Total Authorities8	Actual Spending8	Planned	Actual	Difference
$2,720.0	$3,571.1	$3,704.9	18	17	1

Performance Analysis

This program activity continued to be devoted largely to ongoing activities designed to support program areas in the provision of their programs. Highlights of the Internal Services program activity over the planning period include:

• making information technology investments, including the continued re-development of the Compliance Database containing drug product pricing information in support of the enforcement functions of the PMPRB;
• completing the development of a Program Evaluation Framework for the Compliance and Enforcement Program;
• building capacity in information management, communications and human resources to ensure timely staffing of vacant positions; and
• completing the retrofit of the PMPRB facilities to accommodate the increased number of FTEs.

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