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 The changes are the biggest reform to Canada's drug price regime
since 1987 and could eventually cut the earnings of drugmakers in
the United States, the world's largest pharmaceutical market.
The new rules, described in a statement by Health Canada, were
largely in line with a December 2017 draft. They came after months
of delay prompted speculation the government would back down in the
face of industry lobbying or simply run out of time before Canada's
October election.
"We are taking the biggest step in a generation to lower the price
of drugs in Canada by moving forward with these regulations,"
Minister of Health Ginette Petitpas Taylor said in an interview.
Under the new rules, Canada will change the countries the federal
drug price regulator, the Patented Medicine Prices Review Board (PMPRB),
compares domestic prices to, dropping the United States and
Switzerland where prices are highest, and let the agency consider
the cost-effectiveness of new medicines.
It will also force drugmakers to disclose some confidential
discounts to the PMPRB, which sets maximum prices.
Initially expected to go into effect in January, the regulations
were delayed so the government could review feedback. Petitpas
Taylor said the regulations should now go into force within a year.
She said while the new features of the regulations, which would take
into account cost-effectiveness of medicines and their impact on
government budgets, would only apply to new drugs, changes to the
countries Canada compares its prices with could affect some drugs
already on the market.
REFORMS COULD AFFECT U.S. MARKET
Global drugmakers, including Johnson & Johnson <JNJ.N>, Merck & Co <MRK.N>
and Amgen Inc <AMGN.O>, argued against the draft plan.
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Petitpas Taylor said the new rules would lay the foundation for a
new national pharmaceutical care program. Prime Minister Justin
Trudeau's government is expected to announce a program to cover the
cost of prescription drugs for some or all Canadians, but the
program's scope is not yet clear.
While the Canadian government's focus is on reducing domestic
patented drug prices that are among the highest in the world, the
new policy could eventually have consequences south of the border.
The Trump administration in July said it would allow U.S. states and
other groups to start pilot programs related to importing drugs from
Canada. It has also said it may start determining what the
government healthcare program Medicare pays for certain medicines
based on prices in some other countries, including Canada.
Reuters reported in February that pharmaceutical lobby groups had
offered to give up C$8.6 billion in revenue over 10 years, freeze
prices or reduce the cost of treating rare diseases in order to head
off the Canadian reforms.
Innovative Medicines Canada (IMC), the main industry lobby group,
has argued lower prices could result in delayed drug launches and
reduce life sciences investment in Canada.
The federal government has argued many countries with lower prices
have more pharmaceutical industry investment and access to drugs
that meets or exceeds Canada's.
"This is something that we wanted to get right," Petitpas Taylor
said. "We took the time that was necessary, and I'm extremely
pleased that we're moving forward."
(Reporting by Allison Martell; editing by Denny Thomas and Nate
Raymond)
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