PMPRB Provides New Interpretation of its Excessive Price Guidelines

A Hearing Panel (Panel) of the Patented Medicines Prices Review Board (Board) has departed from its Excessive Price Guidelines (Guidelines) in a case which, according to the Board, raised "important considerations of policy" in the way in which the Board should determine when a medicine is excessively priced. The issue in the case of Shire BioChem Inc and the medicine "Adderall XR" was whether newer drugs to treat attention deficit hyperactivity disorder (ADHD) such as Adderall XR and which involve different dosages produce benefits that are so substantial in relation to competitive drugs that they warrant establishing a higher maximum non-excessive (MNE) price that would otherwise apply under the Guidelines. In general, the Guidelines lay down categories of new medicines that give (i) little or no improvement, (ii) moderate improvement, or (iii) substantial improvement. Board staff argued that any added benefits of Adderall XR (a single dose, rather than several taken throughout the day) amounted only to a "moderate improvement" and thus did not warrant a higher MNE price. The manufacturer of Adderall XR, on the other hand, argued that the benefits represented a "substantial improvement", thereby justifying a higher price than existing medicines for the same condition. The Panel, in effect, rejected both positions. It concluded that Adderall XR falls midway between the existing categories which relate to "moderate' and "substantial" improvements, constituting, in effect, a fourth category, "one that, on the findings of this Panel, is unique to once-daily medicines for ADHD". However, the Panel clearly did not intend to rule out the use of this fourth category in non-ADHD medicines:

"There could be other medicines that otherwise represent more than a moderate improvement , but less than a substantial improvement, over existing medicines and thus arguably warrant pricing tests that are more liberal … "

For the full text of the Panel's decision, see: http://tinyurl.com/6dvfwf Summary by: The Editor