Source: The Conversation – Canada – By Joel Lexchin, Professor Emeritus of Health Policy and Management, York University, Canada
Drug pricing in Canada just got more industry-friendly.
Canadian drug prices are already the fourth highest in the industrialized world. Now, with the release of new guidelines for the staff at the Patented Medicine Prices Review Board (PMPRB) at the end of June, the situation is poised to potentially get even worse.
The review board is the federal agency that was set up 1987 to ensure that the prices for patented drugs are not “excessive.”
Comparing prices
Up until now, one of the criteria the PMPRB used in making the decision about what was an excessive price was to compare the proposed Canadian price for a new drug with the median price in 11 other countries. The median is the 50 per cent mark; in other words, the price in half of the other countries was below what’s proposed for Canada, and the price in the other half was above the proposed Canadian price. Under the new guidelines, set to take effect on Jan. 1, 2026, the Canadian price can be up to the highest in those other 11 countries.
Right now, the median price in the 11 countries Canada is compared to is 15 per cent below the price of patented drugs in Canada. The highest international price, which will be the new standard, is 21 per cent above the median Canadian price, meaning Canadian prices for new drugs will be significantly higher than they otherwise would have been.
Sometimes a drug is not available in any of the 11 other countries when it comes onto the Canadian market. In that case, the company can price the drug at whatever level it wants and keep it at that price until it comes up for its annual price review. The executive director of the PMPRB told the Globe and Mail that this would incentivize drugmakers to bring their products to the Canadian market first.
Incentivizing drug companies may be a reasonable idea, but that’s not part of the mandate of the PMPRB. As laid out in Section 83 of the Patent Act, its mandate is to ensure drug prices aren’t excessive.
Additional therapeutic value
In the past, one of the factors that the PMPRB took into account in determining if prices were excessive was the additional therapeutic value of a new drug compared to what was already on the market. The lower the value, the lower the price. In this regard, the PMPRB was advised by its Human Drug Advisory Panel, an independent group of experts.
The ranking of new drugs against existing ones was also of significant value to Canadian clinicians. It helped them to decide on the best treatment option for their patients and countered the hype about new drugs that came from the manufacturers.
Since the new guidelines have abandoned looking at therapeutic improvement of new drugs, that leaves only one remaining Canadian source for that type of information, the Therapeutics Letter, a bimonthly publication targeting identified problematic therapeutic issues in a brief, simple and practical manner.
Complaints about prices can be made by federal, provincial and territorial health ministers and by senior officials who are authorized to represent Canadian publicly funded drug programs. “Other parties who have concerns about the list prices … are encouraged to raise their concerns with their relevant Minister(s) of Health or Canadian publicly-funded drug program (sic).” This advice is cold comfort for people working low-wage jobs who aren’t covered by provincial and territorial drug plans and don’t have any access to their health minister.
If there is an in-depth review of a new drug’s pricing — a preparatory step to determine whether there should be a formal hearing to investigate if the price is excessive — it is only the manufacturer that is allowed to submit information to the PMPRB. Clinicians who prescribe the drug, patients who take the drug, and organizations and individuals that pay for the drug do not have that same right.
Donald Trump’s on-again, off-again tariffs are already threatening to drive up drug prices and make prescription drugs inaccessible to many Canadians. Higher drug prices will also almost certainly affect Canada’s already limited pharmacare program. Higher prices for new drugs will make an expanded pharmacare plan more expensive and less appealing to the federal government. The new PMPRB guidelines help ensure higher drug prices and no pharmacare expansion.
Between 2022-2025, Joel Lexchin received payments for writing a brief for a legal firm on the role of promotion in generating prescriptions for opioids, for being on a panel about pharmacare and for co-writing an article for a peer-reviewed medical journal on semaglutide. He is a member of the Boards of Canadian Doctors for Medicare and the Canadian Health Coalition. He receives royalties from University of Toronto Press and James Lorimer & Co. Ltd. for books he has written. He has received funding from the Canadian Institutes of Health Research in the past.
– ref. Canada’s new drug pricing guidelines are industry friendly – https://theconversation.com/canadas-new-drug-pricing-guidelines-are-industry-friendly-261062
