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Drugmakers Offer Canada $1 billion To Scrap New Pricing Guidelines

In our previous blog post (published on November 4th), we introduced the new guidelines outlined by the Canadian Patented Medicines Prices Review Board (PMPBR) that are intended to further control drug pricing for drugs, such as those used to treat rare disease. The new guidelines are to be implemented on January 1st, 2021 and outline significant changes that were developed in consultation with the public, advocacy groups, and industry partners, which represent a significant break from the original guidelines developed in 1987 (Patented Medicine Prices Review Board, 2019). The call for change has emerged from the Government of Canada’s initiative to lower the price of patented drugs, which they describe as being too high; while other countries with lower cost have similar access to these medicines (Patented Medicine Prices Review Board, 2019).

The new regulations would result in significant changes to the ways that drugs are approved and priced in the Canadian context. Firstly, as per the new guidelines, pricing will be benchmarked against countries that are more like Canada economically, and according to the PMPBR would be priced from a consumer price protection standpoint (Patented Medicine Prices Review Board, 2020). Secondly, the new guidelines would be based on actual prices paid in Canada. According to the PMPBR, many pharmaceutical companies have made “back-door deals” and therefore a majority of patients in Canada are not actually paying the marketed prices for drugs (Patented Medicine Prices Review Board, 2020). Lastly, the maximum price would be considered based on the value of the medicine and the overall affordability of medicine based on market calculations, which some have argued are inaccurate means of determining the practical importance of a drug (Patented Medicine Prices Review Board, 2020).

Innovative Medicines Canada (i.e. the pharmaceutical industry’s lobby group in Canada) met with the Minister of Health, Parrt Hajdu, on October 18th, and submitted a proposal the following week calling for the Government of Canada to reconsider these regulations (Martell, 2020). In a statement released by Innovative Medicines Canada on October 23rd, they state that if the new PMPBR regulations are implemented “they will have a negative impact on Canadian patients. Specifically, innovative new medicines will not launch in Canada, depriving patients of potentially life-changing new treatments” (Innovative Medicines Canada, 2020). Further, they state that their “members remain committed to their offer to work with government on a solution that meets their important public policy objectives, without undermining Canadians’ access to new medicines, or driving away investment” (Innovative Medicines Canada, 2020).

As a result, the pharmaceutical industry has made a last-ditch C$1 billion proposal to the Canadian government in hopes of fending off parts of a drug pricing crackdown set to go into effect on January 1, according to industry documents reviewed by Reuters (Martell, 2020). Further, it has been made public that if “other costly reforms are shelved, the industry is willing to spend C$1 billion over the same period to boost local manufacturing and commercialization, and on new programs to improve access to drugs for rare diseases” (Martell, 2020).

How can we make sense of this proposal?

It looks a lot like money promised to influence the judgment of the Government of Canada to prevent the implementation of these guidelines. “Money or favor given or promised in order to influence the judgment or conduct of a person in a position of trust” (Merriman-Webster, 2020), is literally the definition of a bribe.

Semantics aside, the fact that this industry alliance would make such an offer may be a sign that the pending changes to the PMPRB guidelines could work to drive the prices of drugs and treatments down within the Canadian context.

What this action also signals is the industry’s attempt to continue business as usual, charging the Canadian health systems -and patients and taxpayers by proxy- virtually unregulated cost for treatment.

What all of this has made clear is that both the Government of Canada and Innovative Medicines Canada are both institutions that are acting in their own self-interest in hopes of creating an outcome that is most financially beneficial for them. It is instances such as these that reignite and highlight the importance of developing treatments that align with our understanding of social pharmaceutical innovation (SPIN). Through the development of SPINs, various stakeholders can work together to research and fund treatments that not only meet the Government of Canada’s quality-adjusted life year (QALY) calculation for the efficiency of drugs, but also provide patients with rare disease access to treatments, and affordable ones, that they so desperately need to survive.



Innovative Medicines Canada. (2020, October 23). Innovative Medicines Canada responds to the release of Patented Medicine Prices Review Board’s (PMPRB) final Guidelines. Retrieved December 1, 2020, from Innovative Medicines Canada:

Martell, A. (2020, November 15). Drugmakers offer Canada C$1 billion to scrap some pending pricing rules. Financial Post, pp. 4-6.

Merriam-Websiter Dictionary. (2020, November 24). Bribe. Retrieved December 4, 2020, from Merriam-Webster:,bribed%3B%20bribing

Patented Medicine Prices Review Board. (2019, November 21). PMPBR draft guidelines consultation. Retrieved December 1, 2020, from Government of Canada:

Patented Medicine Prices Review Board. (2020). Public Webinar on the New PMPRB Guidelines. Government of Canada. Ottawa: Government of Canada.


Written by: Conor Douglas (PhD) and Shir Grunebaum (MA)

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1 Comment

Faisal Ali
Faisal Ali
Jan 29, 2021

Indeed this is a business as usual approach. The PMPRB Annual report for 2018 has finally been released, and the numbers for the R&D to sales ratio are not looking good. R&D to sales for all patentees was at a record low of 4% since the agency started measuring this metric in 1988. Even if the industry as a whole in Canada spent that additional 1 billion dollars in R&D in 2018, that would only account for approximately another 4.3% to the R&D to sales ratio. In other words, all else equal, it would still be under the 10% (non legally binding) agreement of R&D to sales spending.

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