A Regulatory Agency in Canada is Calling Down the Thunder on Rare Disease Drug Prices

According to a story from Yahoo News, the Patented Medicine Prices Review Board (PMPRB), a small agency of the Canadian government that employs less than 100 people in total, is starting to make its presence felt. The ultimate goal is bringing down drug prices; Canada’s are among the highest on the planet. One target that the agency has selected is Horizon Pharma, which currently produces a therapy for the rare condition cystinosis that costs C$325,000 per year.

Calling out Excessive Prices

Changes to Canadian law that could be coming soon could also expand the capabilities of the PMPRB. The activities of the agency are relatively straight forward: it can offer a challenge to the currently listed price of a patented drug in the company and, if it is deemed excessive, order that company to repay some if its revenue. In recent years, the PMPRB has been opening up a steady stream of investigations into a number of drugs that could potentially be overpriced. 

Drug Companies Getting Nervous

These changes to the law have pharma companies on high alert. While they could cut into precious profits, the regulations stand to benefit Canada’s provincial governments, and, more critically, could reduce costs for patients. It is possible that dropping prices in Canada could also have residual effects in the US as well, which far and away has the highest drug prices anywhere. Meanwhile, pharma lobbyists in Canada have been doing their best to argue against the changes. They claim that they could delay access to new patented drugs for patients.

The PMPRB is not an agency that negotiates with drug makers. Instead, it draws its legal reasoning from Canada’s federal patent laws. When a drug is determined to be overpriced, the agency can claim an illegal abuse of the rights allotted to the patent holder. Many drug companies find the recent behavior of the agency unreasonable, but the director of the PMPRB, Douglas Clark, sees things differently. He says that the increased activity is the result of drug prices that have climbed more rapidly in recent years.

While it is unclear if new changes in the law will proceed, expect the PMPRB to continue to play a prominent role in Canada for the time being.

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