The PMPRB and Discounted Canadian Drugs
Many patients from around the world are digitally flocking to purchase Canada drugs online. Why are many brand name prescription drugs cheaper in Canada? One substantial reason is the Patented Medicine Prices Review Board, or PMPRB. This Canadian agency was established in 1987 to control disproportionate price increases for patented drugs due to market exclusivity resulting from the drug’s patent. In essence, this panel regulates how much prescription drugs cost.
To decide what price increases are disproportionate, the PMPRB uses four basic guidelines:
1. For the better part of all new Canadian drugs, the cost of the drug cannot go beyond the highest cost of using an existing drug used to treat the same condition in Canada. For example, Drug Company A has an existing drug that has been used to treat breast cancer successfully for 20 years. They call this drug “Cancer Drug 1”, and it costs patients $20 for 30 days worth of medication. Now, Drug Company B introduces a new drug onto the market; it is called “Cancer Drug 2”, and it also treats breast cancer successfully. Drug Company B cannot sell Cancer Drug 2 for more than $20—the established price of the successful Cancer Drug 1—according to the PMPRB.
2. In the case of brand new “wonder” drugs, pharmaceutical companies can charge a price that is an average of the prices charged for the identical medication in the countries listed in the PMPRB’s “Regulations”. The countries listed in the “Regulations” include France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the United States. To continue with the above example, if Cancer Drug 2 is a breakthrough new medication, Drug Company B must find out how much it sells for in the seven listed countries and compute an average price; that average price is the most they can sell their new drug for.
3. All price increases after the new medication is on the market cannot be higher than the increases in Canada’s Consumer Price Index. The latest increase in Canada’s CPI is 1.5%. This means that this year, Drug Company B cannot sell Cancer Drug 2 at a Canadian pharmacy online for more than a 1.5% increase in its current price, even if Drug Company B’s operating, research and development or other costs rise.
4. The price for a medication can never be more than the highest price for the same medication in the countries listed in the “Regulations”. Therefore, if Germany has the most expensive Cancer Drug 2 out of all of those seven countries and they sell Cancer Drug 2 for $30 for a month’s supply, Drug Company B can never sell Cancer Drug 2 for more than $30 for a month’s supply in Canada, per the PMPRB regulations.
All of these rules can become confusing, but by the PMPRB controlling the price of prescription medications sold within Canada’s borders, they have, so far, been able to make prescription drugs fairly affordable for not only their own citizens, but patients from around the globe. Today an American can go to a Canada pharmacy online, and as long as they have a valid prescription from their physician, purchase Canadian drugs at a lower price than that drugs’ American counterpart.
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