On May 6, 2024, Canada’s Standing Committee on Health (“HESA”) issued a report containing “ten recommendations on how the Government of Canada can enable the Patented Medicine Prices Review Board (“PMPRB”) to more effectively carry out its mandate and implement its reforms” (“Report”). HESA called on the Government of Canada to “table a comprehensive response to this report” within 120 days.
On September 18, 2024, the Government delivered its Response to the Report with a seven-page letter signed by the Minister of Health that addresses six of the ten recommendations made by HESA. The Government redirected four recommendations to the PMPRB for a response, though this was not expressly contemplated by the Committee or permitted by the Report.
Further details of the Government’s response and links to the relevant documents are provided below.
What is HESA?
HESA is a federal Parliamentary committee. Its mandate is to “study and report on all matters relating to the mandate, management and operation of Health Canada”, to provide oversight of four agencies that report to Parliament through the Minister of Health, including the PMPRB, and to study other matters that it chooses to examine. HESA makes public its findings and recommendations on these topics by presenting a report to the House of Commons. The current HESA chair is a member of the governing Liberal party.
Purpose of the Study
The purpose of this particular study was to assess “concerns regarding the Board’s operations and its ongoing efforts to implement drug pricing reforms” that have been under consideration since 2016. HESA was particularly interested in events giving rise to the delayed implementation of Guidelines that were expected to come into force in January 2023, and the sudden resignations of the Acting Chairperson, a Board member, and the Executive Director shortly thereafter (“Resignations”).
Committee Hearings
In April-May 2023, the Committee heard testimony from seven witnesses, including the (now former) Minister of Health, who provided “contrasting accounts” of the events leading up to the Resignations. HESA noted that “[s]ome blamed pressures exerted on the Board by the Minister of Health and pharmaceutical industry, while others refuted the existence of external interference and pointed to problems within the PMPRB, such as resistance to meaningful stakeholder engagement or ambiguities in operating procedures.” Seven health-related organizations also submitted briefs to the committee.
The Report and the Government’s Response
HESA released its Report on May 6, 2024. The Report summarizes the relevant evidence and presents ten recommendations “to enable the PMPRB to more effectively carry out its mandate of protecting Canadian consumers against excessive drug pricing and ensure that the Board is successful in reforming its approach to evaluating drug prices”. The Government delivered its Response on September 18, 2024.
- Recommendation 1
That the Government of Canada implement a clear communications protocol between the Minister of Health and the Chairperson and members of the PMPRB.
Response (in part): The Government is supportive of strengthening communications within the legal and policy frameworks currently in place that guide the federal relationship with the PMPRB. Health Canada will continue to work with the PMPRB to facilitate regular interactions and improve communication processes between the two organizations in a way that respects the Patent Act and the PMPRB’s arm-length status.
- Recommendation 2
That the Government of Canada review the process by which it enacts PMPRB regulatory reform.
Response (in part): It is the duty of the Government to respect the authorities granted by Parliament, as expressed in legislation, and to work to ensure that regulations result in the greatest overall benefits to current and future generations of the Canadian population. Regulatory amendments may be pursued when a need for modernization is identified, such as through stakeholder consultations, or if there is a need relating to the operational requirements of the PMPRB. The PMPRB contributes to the implementation of regulatory amendments as well as the issuance of non-binding Guidelines that operationalize them. These Guidelines help to establish, and ensure that stakeholders are generally aware of, the usual policies and procedures undertaken by the PMPRB to identify the medicines that might be priced excessively and therefore may warrant further in-depth review and, potentially, a public hearing.
- Recommendation 3
That the Government of Canada review the way in which it interacts with the pharmaceutical industry as a regulated sector with monopolistic patent pricing power.
Response (in part): The Government interacts with stakeholders on a variety of issues at various stages of policy and regulatory development, including consultations on guidance, statutory and policy development; public opinion research; external advisory bodies; public health concerns; system gaps and needs; sector innovation; market trends; opportunities for collaboration; how to meet regulatory requirements. Regarding drug pricing, the Government engages the PMRPB on issues of common interest drawn from various stakeholder perspectives, while respecting the Patent Act and the PMPRB’s arm-length status.
- Recommendation 4
That the mandate of the PMPRB be clarified. The Board “should be mandated to ensure that the prices of patented medicines are not excessive while also ensuring that pricing does not ultimately limit patient access, particularly in the case of rare diseases.”
Response (in part): The Government is supportive of clarifying the mandate of the PMPRB, and the intent of the recommendation as it relates to improving patient access. The Government also recognizes that a balance between supporting innovation and improving the affordability and accessibility of patented drugs in Canada is essential.
- Recommendation 5
That the PMPRB review its internal operating rules to ensure that they are clear and transparent. In addition, members appointed to the organization should be provided with independent, external support to help them in the event of misunderstandings and issues.
Response: The Government deferred to the Board to respond on its own behalf.
- Recommendation 6
That the PMPRB consider case studies to gain insight into how its future Guidelines would be applied in practice and to have a firmer idea of their potential consequences on patients and the life sciences ecosystem.
Response: The Government deferred to the Board to respond on its own behalf.
- Recommendation 7
That the PMPRB include a broader range of stakeholders in policy development.
Response: The Government deferred to the Board to respond on its own behalf.
- Recommendation 8
That the members of the PMPRB always have real-time access to the contents of submissions presented in consultations.
Response: The Government deferred to the Board to respond on its own behalf.
- Recommendation 9
That a registry be created to track drug penetration rates in Canada and compare them with similar countries.
Response (in part): The Government is supportive of the intent of the recommendation to track and compare drug penetration rates and highlighted several ongoing initiatives to support evidence-based decision making.
- Recommendation 10
That the Government of Canada maintain a public registry of publicly funded innovations, alone or in partnership with the industry, and ensure that what it funds is available in the Canadian marketplace.
Response (in part): The Government is supportive of the intent of the recommendation to improve access to health innovations in Canada, and to ensure that information regarding such investments is available to the public
Next Steps
We expect that the PMPRB will respond to the four recommendations that the Government declined to address specifically, although the timeline is unclear. We also anticipate that the PMPRB will continue to move forward with the three-phase guideline consultation process that began in late-2023.
Relevant Links
Record of Proceedings: HESA – Patented Medicine Prices Review Board (ourcommons.ca)
Response: 441_HESA_Rpt17_GR-e.pdf (ourcommons.ca)