This article originally appeared in the Hill Times.
By Nigel Rawson, June 28, 2023
The Patented Medicine Prices Review Board (PMPRB), Canada’s drug-price regulator, is meant to prevent time-limited, patent monopolies granted for new medicines from being abused by excessive prices. But correspondence submitted to the House Standing Committee on Health by former acting PMPRB chair Mélanie Bourassa Forcier, former Board member Matthew Herder, and former PMPRB executive director Douglas Clark demonstrate such dysfunction and bias within the PMPRB it should be disbanded.
The documents submitted to the Health Committee reveal much mud-slinging and finger-pointing by Board members and senior staff internally, at Health Canada, and the biopharmaceutical industry. Together with other information, it is apparent that the PMPRB has, at best, failed to maintain public-service impartiality, and, at worst, been hijacked by anti-biopharmaceutical industry activists.
Since 1987, the PMPRB has performed its regulatory role by setting ceiling prices for new patented medicines based predominantly on a comparison of the manufacturer’s Canadian list price with prices in seven countries. Thirty years later, then-federal health minister Jane Philpott set the PMPRB on a new road. The original plan, proposed in December 2017, was to replace two higher-price countries with six lower-price countries in the international comparison, use untried pharmacoeconomic tests for setting prices, and require drug developers to report details of confidential rebates negotiated with public and private insurers.
In 2022, the PMPRB released revised draft guidelines. Instead of using its comparison with the new countries in the way it had done for more than three decades, the PMPRB invented new and complicated ways to reduce drug prices. The PMPRB’s intention was clear: it would be more intimidating by threatening to launch an investigation if a manufacturer’s list price wasn’t as low as it wanted using vague criteria. The PMPRB appeared to be trying to flout a Federal Court of Appeal decision that “excessive pricing provisions in the Patent Act are directed at controlling patent abuse, not reasonable pricing, price-regulation or consumer protection at large.”
The PMPRB knew its plan was a “paradigm shift” from its usual practice, as an email to Clark from PMPRB director of policy and economic analysis, Tanya Potashnik, states. Nevertheless, when the draft guidelines were released in October 2022, only a short 60-day consultation was allowed. A shift in direction this major would normally require working groups over a much longer period, and, in an ideal world, multi-stakeholder development of new rules.
Health Canada recognized the magnitude of the change. Late in November 2022, federal Health Minister Jean-Yves Duclos wrote to Bourassa Forcier stating the “new version of the guidelines signal a pivotal change from a longstanding practice of including price tests and price ceilings, to instead including investigation criteria,” and asked the PMPRB to pause the consultation. Bourassa Forcier and Clark met with Health Canada officials two days later, during which the deputy health minister clarified that their recommendation was to “take more time” and meet with stakeholders.
Bourassa Forcier informed the other three Board members and senior PMPRB staff of her concern about the consultation’s validity. The other Board members wanted the consultation to end as planned, which she opposed and instructed staff to announce suspension to allow for a “meaningful consultation,” citing sections of the Patent Act as empowering her to take that action. The other Board members, who had been meeting in twos and threes behind Bourassa Forcier’s back, decided she couldn’t act alone and that any decision to suspend the consultation had to be taken by the whole Board.
Bourassa Forcier wanted any communication to the health minister and biopharmaceutical industry to include her dissent, but was told it would breach the confidentiality of Board deliberations. Realizing she was going to be overruled and not allowed to make her dissent public, Bourassa Forcier resigned. Without an acting Board chair, the PMPRB ultimately suspended the consultation.
Canadians with unmet health-care needs whose quality of life or longevity depends on access to new innovative medicines are the losers in this debacle, because it has led to fewer new drugs coming to Canada and later arrivals of those that have been launched here. While patients would undoubtedly like lower drug prices, they don’t want PMPRB actions to lead to developers deciding not to launch new medicines in Canada.
The PMPRB has outlived its usefulness and is now a problem. It should be disbanded.
Nigel Rawson is an affiliate scholar with the Canadian Health Policy Institute and a senior fellow with the Macdonald-Laurier Institute.
