Price Controls

The Patented Medicine Prices Review Board (PMPRB) is in the process of revising its overall approach to setting price ceilings, including consideration of the use of U.S. Department of Veterans Affairs (DVA) prices as part of the basis on which those ceilings are established.

The use of international price comparisons and the establishment of price ceilings on patented medicines are counterproductive to initiatives to provide high quality health care, and thus improve the health of patients, or to help contain health care spending. The following are among the principal concerns regarding such practices.

Within the broader context of concerns with the practice of comparing prices for patented products across countries, the prices associated with the DVA formulary are an inappropriate benchmark for PMPRB purposes, for the following reasons:

In deciding how best to allocate health care resources and resolve the tension between controlling health care spending, improving the health of the population, and ensuring that the research-based pharmaceutical industry can continue to deliver cost-effective innovations for patients, the PMPRB's proposed approach has the potential to negatively impact the latter.

Additional concerns have been raised regarding ongoing efforts at the provincial level, particularly in Ontario and British Columbia, to impose ceilings on pharmaceutical expenditures without a full evaluation of the positive contribution of the research-based pharmaceutical industry to an overall reduction in health care costs. These cost containment measures threaten the economic viability of introducing innovative products in provincial markets, a situation further aggravated by restrictive formulary listing practices.

Potential Exports/Foreign Sales

It is not possible at this time to determine the impact on sales for PhRMA member company affiliates in Canada if the aforementioned issues were to be resolved.