On September 1, 2022, the Patent and Drug Pricing Board (PMPRB) announced a decision regarding the drug Procysbi (cysteamine delayed-release capsules). PMPRB determined that Procysbi was priced too high. Interestingly, this issue was submitted to the PMPRB following a complaint by the Pan-Canadian Pharmaceutical Alliance (“pCPA”). Guidelines automatically initiate an investigation when a complaint is received.
This decision provides useful insight following the Federal Court of Appeals decision. Alexion Pharmaceuticals Inc. v Canada (Attorney General), 2021 FCA 157 (“Soliris FCA”), and how the PMPRB reviews prices for drugs under investigation, including:
- What is the PMPRB’s mandate?
- What is medicine?
- What is a Treatment Comparator?
- What is an improvement and price test?
What are PMPRB permissions?
The PMPRB focused on excessive pricing rather than “reasonable pricing,” which the Federal Court of Appeals found to be the problem in the Soliris FCA. This decision includes a lengthy discussion of PMPRB’s mandate.
“The task of the Board is to ensure that patentees do not abuse their statutory monopoly rights by charging excessive prices, and in this respect the Board has a consumer protection mandate.”
What are drugs?
As a first step, the PMPRB will consider whether Procysbi and Cystagon are the same drug given the presence of the same active ingredient, cysteamine bitartrate, and their use for the same indication, nephrogenic cystinosis. bottom. A key question was whether the presence of the same active ingredient, albeit in different formulations, meant that the drugs were the same drug. It refers to the commercial formulation (Procysbi) rather than the active ingredient (cysteamine bitartrate).”
This analysis is interesting in light of the PMPRB’s decision to redefine Galderma. In that case, the PMPRB paid close attention to the active ingredient and found that a later patent claiming 0.3% adapalene was related to an earlier 0.1% formulation of the drug.
What is a Treatment Comparator?
The PMPRB did not determine that Procysbi and Cystagon are the same drug, but found Cystagon to be a therapeutic comparator for Procysbi based on active ingredients and indications. The PMPRB determined that offering Cystagon through a special access program he would be “sold in the relevant market” for comparison purposes.
What is an improvement and price test?
PMPRB then determined the appropriate pricing test given the level of improvement Procysbi offered. PMPRB found that Procysbi provided modest improvement over its therapeutic comparator, Cystagon. So the moderate improvement test was appropriate. Moderate improvement tests include the Treatment Class Comparison (TCC) test, the Median International Price Comparison (MIPC) test, and the midpoint analysis of these two tests. The price of moderate improvement drugs is constrained by the high end of the TCC test and the midpoint between the TCC test and his MIPC test.
Applying the TCC test and comparing with Cystagon, PMPRB found Cystagon’s median ex-works price to be C$0.0197/mg. In applying the MIPIC test, the PMPRB found that the median international ex-works price for Procysbi was 0.4207 CAD/mg. The midpoint between the TCC and MIPC tests is 0.2202 CAD/mg, representing the maximum non-excess price for Procysbi in Canada.
Given that Procysbi entered the Canadian market at C$0.4140 per mg, Horizon was ordered to reduce the price of Procysbi and pay Canada the excess earnings earned by Horizon.