Canadian Prescription Drugs

Health Canada is the Canadian government's body charged with the assessment of all new medications and their conformity to the Canadian Food and Drugs Act and Regulations. Health Canada is responsible for granting a Notice of Compliance (NOC) for every medication, authorizing it's marketing and distribution in Canada. Occasionally, a medication can be distributed prior to receiving an NOC through special programs, such as the Emergency Drug Release (EDR) Program (veterinary) or as an Investigational New Drug.

Canadian Drug Prices

Prescription medication prices in Canada are heavily regulated. The system differs considerably from that in the United States. Prescription drugs in Canada are regulated through the Patented Medicine Prices Review Board (PMPRB).

About the Patented Medicine Prices Review Board (PMPRB)

The PMPRB was created in 1987 under the Patent Act. It is an independent body put in place to protect consumer interests in the face of increasing patent protection for pharmaceutical companies. The PMPRB's responsibilities include; ensuring that patented drug manufacturers prices are not excessive, and reporting annually to Parliament on price trends of medications and the ratio of R&D expenditures to sales by companies holding drug patents. The PMPRB does not examine as part of it's mandate prices of non-patented medications, how medications are prescribed, or how drugs fall into provincial drug plans.

The PMPRB regulates maximum drug prices for both non-prescription and prescription patented drugs used for both human and veterinary use. Typically, the maximum price is the "factory-gate" price, which refers to the prices paid by pharmacies, hospitals or wholesalers to the drug manufacturer. The PMPRB does not regulate prices of non-patented drugs, including generic drugs.

The price of every patented drug, including every strength and dosage of the drug, is regulated by the PMPRB. Every product is assigned a Drug Identification Number (DIN) or General Public (GP) number. The PMPRB regulates pricing only. The Department of Health is responsible for the regulation of every medication in terms of it's safety for use under the Food and Drugs Act and Regulations.

Drug Price Controls

The PMPRB subjects all patented medicines to direct price controls. It follows the guidelines provided in the Patent Act to ensure that the prices of drugs sold in Canada are not excessive. The primary aim of the PMPRB is to limit the price paid for medications to keep them within the range of prices paid for already existing drugs used to treat the same illness or disease. The Patented Medicines Regulations states that drug prices cannot increase beyond the median price paid for the same drug in seven other industrialized countries, including Germany, France, Sweden, Italy, U.K., Switzerland and the U.S. Other guidelines must also be followed. The Canadian price of any patented medicine cannot be the highest in the world, and patented drug prices cannot increase by more than the CPI (Consumer Price Index).

The PMPRB can order the holder of the patent to reduce the price it charges after a public hearing demonstrates that the price is excessive. The patentee can offset excessive revenues received by further reducing the drug price or by making a payment to the Canadian government.

Drug manufacturers are not required to obtain PMPRB approval prior to raising prices. Manufacturers are expected to comply with the guidelines contained in the Food and Drugs Act and Regulation. The PMPRB monitors changes in drug prices and can launch an investigation if:

1) The increased price is 5% or more above the maximum non-excessive price and there are cumulative excess revenues of $25,000 or more

2) The patentee's cumulative excess revenues are $50,000 or more

3) In response to complaints with significant evidence of excessive prices

The PMPRB and the Canadian government believe strongly in the efficacy of the PMPRB. Although, like other industrialized countries, expenditures on patented drugs have been increasing, the rise in Canada is less than many other industrialized nations.