Law Times

Law Times • sepTember 25, 2017 Page 11 www.lawtimesnews.com Government aims to increase affordability Potential changes concern pharma companies BY MICHAEL MCKIERNAN For Law Times P roposed changes to the way Canada puts a ceil- ing on patented drug prices have put pharma- ceutical companies on alert, says an Ottawa intellectual property lawyer. Earlier this summer, Health Canada released a consultation report entitled "Protecting Ca- nadians from Excessive Drug Prices" that included a number of suggested amendments to the federal Patented Medicines Regulations, which are in turn used by the Patented Medicines Prices Review Board to deter- mine the level at which a drug's price crosses the threshold to become excessive. But Daphne Lainson, part- ner in the Ottawa office of intel- lectual property boutique Smart and Biggar, says the breadth of the potential changes has drug companies worried. "We have a system that has been in place for a while, with some certainty around it. Com- panies understand how it works and what to expect," says Lain- son, whose practice includes ad- vising clients on pharmaceutical regulatory law. "By changing the metrics, it has the potential to introduce some uncertainty in the market, which is not great for Canadian consumers." Many of the issues dealt with in the report are better left to re- imbursement negotiations with provincial bodies and private drug plans once drugs come to market, she says. "The government appears to be creating basically a parallel workstream to one that is al- ready handled by other bodies. I'm not sure it makes sense to have that duplicative effort in advance of any kind of market access," Lainson says. "It's unfortunate, because the PMPRB only deals with drugs under patent protection, which is only a very small segment of the market. If they really want to address pricing, the mechanism shouldn't be via the PMPRB but via reimbursement negotia- tions." Chandimal Nicholas, a law- yer in the intellectual property practice group at Cassels Brock & Blackwell LLP, says the time is right for a fresh look at the pro- cess. Although the PMPRB was created in 1987, its associated regulations have not seen sub- stantial alterations in more than two decades, according to Health Canada. "It's hard to say how much of an impact the changes would have at this stage, but I like the fact that they seem to be taking a more nuanced approach and looking at things on a drug- by-drug basis," Nicholas says. "That's a good step in the right direction." In a statement announc- ing the consultation, Minister of Health Jane Philpott put the emphasis firmly on affordabil- ity, pointing out that only the U.S. and Mexico pay more than Canadians for patented medi- cines, according to statistics gathered by the Organization for Economic Co-operation and Development. In addition, the OECD me- dian is 22-per-cent lower than the Canadian level. "Canadians are paying too much for prescription drugs, and the Government of Canada is committed to making drugs more affordable," Philpott said. "Modernizing our approach to the regulation of patented drug prices is a big step in this direction, and will complement the work we are already doing with the provinces and territo- ries through the pan-Canadian Pharmaceutical Alliance to make prescription drugs cheap- er. These measures will go a long way towards helping Canadians afford the medicines they need to live healthy, productive lives." One of the most significant proposals by Health Canada in- volves a change to the basket of comparator countries the agen- cy uses when setting its price ceiling. Until now, drug companies needed to submit their whole- sale prices in seven countries. What has attracted the most at- tention to the new basket is not the additions to the expanded 12-country list but the removal of the U.S., which typically had the highest price in the group for most drugs. Eileen McMahon, chair- woman of Torys LLP's intellec- tual property and food and drug regulatory practice groups, says American drug companies are worried that the change will ex- ert downward pressure on price caps and reignite old fears about a black market in cheaper Cana- dian versions of drugs. "Given Canada's close prox- imity to the U.S., the chance that some of these drugs will leak back into the U.S. market is FOCUS Daphne Lainson says regarding patenting, 'Canada's regime is much more consistent with the U.S. than other jurisdictions.' [I] like the fact that they seem to be taking a more nuanced approach and looking at things on a drug-by-drug basis. Chandimal Nicholas See Could, page 12 Untitled-1 1 2017-09-21 8:23 AM

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