Law Times

PAGE 12 FOCUS September 22, 2008 • Law times setting structure since a court challenged its methodology. The board has been grap- Pharmaceutical clients grapple with price setting T BY DARYL-LYNN CARLSON For Law Times he Patent Medicine Prices Review Board is poised to settle its price pling with setting a consistent pricing regime since the Fed- eral Court of Canada's deci- sion in the Leo Pharma Inc. v. Canada (Attorney General) case in March of 2007. The PMPRB sets maximum prices that can be charged on the market for drugs based on an av- erage transaction price; its man- date is to prevent pharmaceutical companies from charging exces- sive prices for their products. In the LEO decision, the Federal Court upheld the maxi- mum price the company could charge for its topical medica- tion, Dovobet, as determined Dimock Stratton is pleased to welcome Ryan Evans and Jennifer Ko to the firm as associates Ryan received his ��� in 2007 from the University of Western Ontario. He also received his �.�ng.�c. in Chemical and Biochemical Engineering from Western in 2005, with a minor specialization in Biochemical and Environmental Engineering. Jennifer received her ��� from Dalhousie Law School in 2007. She received her �.�.�c. in Engineering Science from the University of Toronto in 2001, having specialized in Biomedical-Electrical Engineering. She also received her �.�.�c. from McMaster University in Electrical Engineering. D����� S������ ��� experience. results. 20 Queen W. 32nd fl, Toronto | 416.971.7202 | dimock.com Untitled-1 1 9/16/08 12:46:48 PM by the PMPRB, although the court also ruled that the board had erred in its choice to exclude free drugs LEO had provided to some disadvantaged consumers, which in turn lowered the mean price it could charge. "It's an interesting case be- cause LEO Pharma wanted to include a program it offered to bring its price down," says In- grid VanderElst of Torys LLP. She notes that the board has enabled companies to routinely factor in wholesale prices they provide to institutions such as hospitals and other care fa- cilities so they can lower their threshold of "excess revenue" they generate from the retail sales of their products, which is also monitored by the PMPRB. "This can be of benefit to a company if they look like the price is creeping up," she says. But in the LEO case, the board "looked at it and said, 'We don't think this is a legitimate program where you're actu- ally helping people, this is not a bona fide free goods program, it's a self-serving program and we're not going to let you take it into account.'" Dovobet contains two medi- cines that are sold separately as Dovonex and Diprosone, and the board, in making price comparisons with other inter- national jurisdictions, found that the price of Dovobet was more than the cost the two in- gredients in Canada. As well, in rejecting LEO's argument that its free supplies should be taken into account, the board determined the company only began providing some prod- uct for free after the PMPRB be- gan investigating the company. "At the same time, Ontario overhauled its provincial drug 'Patient groups and govern- ments all have a stake in this,' says Ingrid VanderElst. programs offered to seniors and low income individuals, and, as part of that, is saying to manu- facturers, 'We may require you to enter into agreements with us that you're going to offer volume dis- counts,'" VanderElst points out. "So it's been a catch-22 situation." Since the decision, the board has been accepting submissions from drug manufacturers in an effort to resolve whether all dis- counting deals should be factored in when setting the maximum price for a product. Many are contacting their lawyers to assist with sorting the matter out. "Patient groups and govern- ments all have a stake in this," she says. "Governments don't want to have a tougher time negotiating with manufacturers because of concerns over what's going on with the PMPRB and this also has implications for hospitals, taxpayers, and patient groups. Everyone has an interest in having a system that works." The PMPRB is accepting submissions until Oct. 6. LT Presented by Enroll Today! 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