Actuarial Notes

Patented Drug Pricing: The PMPRB Releases New Price-Review Guidelines

By A. Chandimal Nicholas, Kassandra Shortt, Dakota Bundy and Joshua Grant · Cassels · 2025 · GH201-726-26

Study guide: Exam GH-201C

A legal commentary published by the Canadian law firm Cassels on July 24, 2025. It describes the Patented Medicine Prices Review Board's new Guidelines for PMPRB Staff, published June 30, 2025, which outline the two-step process by which staff monitor, review and make recommendations on patented drug prices. The SOA lists it as study note GH201-726-26, titling it with the spelling "PMPBR".

On the syllabus

  • Exam GH-201C — GH201-726-26: Patented Drug Pricing: The PMPRB Releases New Price-Review Guidelines; Outcomes 4a.

Background

  • The Guidelines result from proposed amendments to the Patented Medicines Regulations in 2019, multiple court proceedings challenging them and a number of stakeholder consultations, and come into effect on January 1, 2026.
  • The PMPRB is an independent, quasi-judicial body that monitors the prices of patented medicines sold in Canada to ensure they are not excessive.
  • Under the Guidelines, companies set their own list prices for patented medicines and are not subject to pre-set pricing by the PMPRB; the PMPRB can review the listed prices at any time and, after a hearing, decide whether a price is excessive.

The New Two-Step Review Process

  • Step One
    • An Initial Review compares the Canadian list price of a patented medicine with the highest price reported in the PMPRB11: Australia, Belgium, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden and the United Kingdom.
    • If the Canadian price is higher, the drug moves to the In-Depth Review stage; an Annual Review each January compares each patented medicine's price with the PMPRB11 list prices to decide whether it is subject to an In-Depth Review.
  • Step Two
    • The In-Depth Review considers the section 85 factors of the Patent Act to prepare a recommendation on whether the matter should go to a hearing, including the price at which the medicine and others in its therapeutic class have been sold in Canada and in other countries, and how any price change compares with the Consumer Price Index.
    • A hearing panel of at least two PMPRB members sits in public, de novo proceedings; if it finds the list price excessive it can order a lower price going forward and an offset of excess revenue, and in serious cases a repayment of up to twice the excess revenue.
    • A company may avoid a hearing by submitting an Undertaking, a unilateral and non-binding promise, which closes the In-Depth Review if accepted; once a Notice of Hearing is issued an Undertaking is no longer available.

Beware of Complaints

  • The PMPRB automatically begins an In-Depth Review if a complaint is filed by the federal Minister of Health, a provincial or territorial health minister, or a senior official from a publicly funded drug program; complaints from other companies do not lead to In-Depth Reviews.

Takeaway

  • Companies should continue to craft their pricing strategies for patented medicines in Canada carefully in light of the new Guidelines.

Sources