ARCHIVED - RPP 2006-2007
Patented Medicine Prices Review Board

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Section III - Supplementary Information

Organizational Information

The Board consists of not more than five members who serve on a part-time basis, appointed by the Governor-in-Council, including a Chairperson and Vice-Chairperson. In June 2006, the Vice-Chairperson, Dr. Benoit, was appointed as Chairperson and Mary Catherine Lindberg was appointed Member and Vice-Chairperson for a 5 year term. At present one Board position remains vacant.

The Chairperson is designated under the Patent Act as the Chief Executive Officer of the PMPRB with the authority and responsibility to supervise and direct its work. The Executive Director manages the work of the staff. Senior staff consists of the Executive Director, the Director of Compliance and Enforcement, the Director of Policy and Economic Analysis, the Director of Corporate Services, the Secretary of the Board and Senior Counsel.

The Compliance and Enforcement Branch is largely responsible for the review of patented medicine prices and the Compliance and Enforcement Policy. The Policy and Economic Analysis Branch is largely responsible for conducting analyses and preparing reports on price trends and other economic studies. The Secretariat, Corporate Services Branch and Senior Counsel provide Board communications, administrative and legal support.

Table 1: Departmental Planned Spending and Full Time Equivalents

($ thousands)	Forecast Spending 2005-2006	Planned Spending 2006-2007	Planned Spending 2007-2008	Planned Spending 2008-2009
Patented Medicine Prices Review
Budgetary Main Estimates (gross)	4,373.0	6,512.011	6,480.011	4,948.013
Less: Respendable revenue
Total Main Estimates	4,373.0	6,512.0	6,480.0	4,948.0
Adjustments:
Second Governor General Special Warrants
For work under the National Prescription Drug Utilization Information System and for the reporting of non-patented drug prices in Canada under the National Pharmaceuticals Strategy	370.0	-	-	-
Third Governor General Special Warrants
For work under the National Prescription Drug Utilization Information System and for the reporting of non-patented drug prices in Canada under the National Pharmaceuticals Strategy	863.0	-	-	-
Other
Employee Benefit Plan (EBP) Year-end adjustment	18.3	-	-	-
Total Adjustments	1,251.3	-	-	-
Total Planned Spending	5624.3	6,512.0	6,480.0	4,948.0
Total Planned Spending	6,489.8	6,512.0	6,480.0	4,948.0
Less: Non-Respendable revenue	(1,413.3)10	-	-	-
Plus: Cost of services received without charge	779.6	871.2	877.4	832.9
Net cost of Program	4,990.6	7,383.2	7,357.4	5,780.9
Full Time Equivalents	45.0	48.012	47.012	39.013

 

Table 2: Program Activities

2006-2007
($ thousands)	Budgetary
Program Activity	Operating	Gross	Respendable Revenue	Net	Total Main Estimates	Total Planned Spending
Patented Medicine Prices Review	6,512.0	6,512.0		6,512.0	6,512.0	6,512.0
Total	6,512.0	6,512.0		6,512.0	6,512.0	6,512.0

 

Table 3: Voted and Statutory Items listed in Main Estimates

2006-2007 ($ thousands)
Vote or Statutory Item	Truncated Vote or Statutory Wording	2006-2007 Main Estimates	2005-2006 Main Estimates14
25	Program expenditures	5,800.0	3,848.0
(S)	Contributions to employee benefit plans	712.0	525.0
	Total Agency	6,512.0	4,373.0

 

Table 4: Services Received Without Charge

($ thousands)	2006-2007
Accommodation provided by Public Works and Government Services Canada (PWGSC)	590.0
Contributions covering employers' share of employees’ insurance premiums and expenditures paid by Treasury Board of Canada Secretariat (excluding revolving funds) Employer’s contribution to employees’ insured benefits plans and expenditures paid by TBS	281.2
2006-2007 Services received without charge	871.2

 

Table 5: Sources of Non-Respendable Revenue

Non-respendable Revenue

($ thousands )	Forecast Revenue 2005-2006	Planned Revenue 2006-2007	Planned Revenue 2007-2008	Planned Revenue 2008-2009
Patented Medicine Prices Review Source of non-respendable revenue
Voluntary Compliance Undertakings	1,413.315	-	-	-
Total Non-respendable Revenue	1,413.3	-	-	-

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¹ The reduction in the estimated planned spending and FTEs for 2008-2009 is due to the expiration of the Memorandum of Understanding between the PMPRB and Health Canada to fund the PMPRB's work under the NPDUIS and a reduction in funding the PMPRB received to enhance its price review process through Health Canada's Therapeutic Access Strategy. It is expected that new funding arrangements will have been negotiated prior to the expiration of the current MOU.

² The reduction in the number of FTEs for 2007-2008 is due to a reduction in funding provided through a Memorandum of Understanding between the PMPRB and Health Canada for the PMPRB to monitor and report on prices of non-patented prescription drugs.

³ A summary of the Excessive Price Guidelines is available in Section II page 16 of this Report. Additional information on the Guidelines can be found in Chapter 1 of the Compendium of Guidelines, Policies and Procedures which is available on the PMPRB website: www.pmprb-cepmb.gc.ca, under Legislation, Regulations, Guidelines.

⁴ Additional information on the criteria for commencing an investigation can be found in Schedule 5 of the Compendium of Guidelines, Policies and Procedures which is available on the PMPRB website: www.pmprb-cepmb.gc.ca, under Legislation, Regulations, Guidelines.

⁵ The reduction in the estimated planned spending and FTEs for 2008-2009 is due to the expiration of the Memorandum of Understanding between the PMPRB and Health Canada to fund the PMPRB's work under the NPDUIS and a reduction in funding the PMPRB received to enhance its price review process through Health Canada's Therapeutic Access Strategy. It is expected that new funding arrangements will have been negotiated prior to the expiration of the current MOU.

⁶ The reduction in the number of FTEs for 2007-2008 is due to a reduction in funding provided through a Memorandum of Understanding between the PMPRB and Health Canada for the PMPRB to monitor and report on prices of non-patented prescription drugs.

⁷ The PMPRB has no authority over the prices of non-patented drugs, including generic drugs sold under compulsory licenses, and does not have jurisdiction over prices charged by wholesalers or retailers or over pharmacists' professional fees. Also, matters such as distribution and prescribing are outside the purview of the PMPRB.

⁸ IMS Health, Canadian Health and Pharmacy Audit

⁹ See the PMPRB's A description of the Laspeyres Methodology used to construct the Patented Medicine Price Index (PMPI), March 1997, revised June 2000, for a detailed explanation of the PMPI. The PMPI measures the overall change in the prices of existing patented drug products, and is constructed by taking a sales-weighted average of rates of price change at the level of individual products. It is not designed to measure the effects of changes in the quantities of drugs consumed or substitution among drugs (for example, the use of newer drugs in place of older, and possibly less costly drugs) on sales. As of the 1999 Annual Report, the PMPI encompasses prices of patented drugs for human use only.

¹⁰ The money reported as non-respendable revenue does not represent revenues generated by the PMPRB. This money is a result of payments made by patentees to the Government of Canada through Voluntary Compliance Undertakings (VCUs) or Board orders to offset excess revenues. In 2005-2006 the Board accepted 5 VCUs. Additional information on VCUs is available on the website: www.pmprb-cepmb.gc.ca, under Publications, Voluntary Compliance Undertakings.

¹¹ The Treasury Board Ministers have approved supplementary funding of $5.1 million for fiscal years 2006-2007 and 2007-2008 for the PMPRB to conduct public hearing and modernize the Excessive Price Guidelines. In 2007-2008 the PMPRB will seek approval to revise its permanent funding to reflect ongoing operational needs.

¹² The increase in the number of FTEs for 2006-2007 and 2007-2008 is a result of additional resources provided through a Memorandum of Understanding between the PMPRB and Health Canada for the PMPRB to monitor and report on prices of non-patented prescription drugs.

¹³ The reduction in the estimated planned spending and FTEs for 2008-2009 is due to the expiration of the Memorandum of Understanding between the PMPRB and Health Canada to fund the PMPRB's work under the NPDUIS and a reduction in funding the PMPRB received to enhance its price review process through Health Canada's Therapeutic Access Strategy. It is expected that new funding arrangements will have been negotiated prior to the expiration of the current MOU.

¹⁴ The reduction in estimated total planned spending and full-time equivalents for 2005-2006 is a result of the fact that funding arrangements for NPDUIS had not been finalized beyond 2004-2005. Continued funding for NPDUIS was approved in 2006-2007.

¹⁵ The money reported as non-respendable revenue does not represent revenues generated by the PMPRB. This money is a result of payments made by patentees to the Government of Canada through Voluntary Compliance Undertakings or Board orders to offset excess revenues. The Minister of Health may enter into agreements with any province respecting the distribution to that province of amounts received by the Receiver General, less any costs incurred in relation to the collection and distribution of those amounts.

 

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