Mind the GAP: The PMPRB Changes Definition of GAP Medicines and Reduces Compliance Timeline

On January 15, 2021, the Patented Medicines Prices Review Board (“PMPRB”) initiated a consultation on two proposed amendments to the new PMPRB Guidelines (“Guidelines”): (1) the definition of Gap medicines; and (2) the compliance timeline for Grandfathered and Gap medicines. 

According to the PMPRB, the two amendments were required due to the change in the coming-into-force date of the Regulations Amending the Patented Medicines Regulations (“Regulations”), which was pushed from January 1, 2021 to July 1, 2021.

And so, on March 17th, the PMPRB rendered its decision.

Definition of Gap Medicines.

Under the Guidelines, Gap medicines were defined as those which were assigned a DIN was on or after August 21, 2019 (the date the Regulations were adopted) and were first sold in Canada prior to January 1, 2021. Following the consultation, the PMPRB has extended the date of first sale to July 1, 2021. This means the Gap medicine provisions in the Guidelines will now apply more broadly.

Gap medicines are subject to the harshest price standards under the Regulations. More specifically, the Maximum List Price (“MLP”) for this category of medicine is  the lower of:

• the median international price for the medicine in the PMPRB11; and

• the medicine’s ceiling under the previous Guidelines.

In contrast, the MLP for Grandfathered medicines (i.e. those launched prior to August 21, 2019) is the lower of:

• the highest international price; and

• the medicine’s ceiling under the previous Guidelines.

By contrast, the MLP of new medicines (i.e. those with a first sale after July 1, 2021) is determined only by reference to the median international price for the medicine in the PMPRB11.

The revised definition of Gap medicines works against the interests of patentees, as medicines that were launched between January 1, 2021 and March 17, 2021 (i.e., today) will now be subject to more stringent limits on the MLP set out above.

New Compliance Timelines.

The PMPRB has also modified the compliance timeline for Gap medicines and grandfathered medicines. The initial version of the Guidelines stated that patentees of these products would have two reporting periods (i.e. until July 1, 2022) to ensure the MLP was consistent with the median international price. This timeline has been shortened to December. 1, 2021

While the federal government delayed the coming into force of the Regulations “to minimize the imposition of new administrative burden on industry as patented drug manufacturers face increased demands related to supply chains and shortages of existing products and, potentially, new treatments and vaccines in response to COVID-19”, patentees of Gap medicines who are now subject to more stringent price regulation may be wondering whether the administrative burden was actually minimized at all.

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About Dara Jospé

Dara Jospé practises law in the area of life sciences, health and food regulation. She advises manufacturers on all stages of the lifecycle of a pharmaceutical product, from conception until it reaches the consumer. In all cases, Dara develops low-risk and creative ways to adjust to the legal prohibitions and policy restrictions while keeping business interests and the safety of patients in mind.