CAPDM’s Response to the PMPRB Phase 2 Consultations on New Guidelines

CAPDM's Response to the PMPRB Phase 2 Consultations on New Guidelines

Last month, CAPDM submitted a written response to the Patented Medicine Prices Review Board (PMPRB) regarding Shaping the Future: A Discussion Guide for PMPRB Phase 2 Consultations on New Guidelines.

Following our submission, we were invited to a virtual stakeholder meeting on October 2, 2024, to discuss our concerns and recommendations on the new guidelines. Below are key points we presented during the discussion.

At the core of CAPDM’s advocacy is a simple yet essential principle: while paying a fair price for medications is important, reducing the list price of drugs without careful consideration of the supply chain's structure and sustainability could endanger access to vital medications—particularly for those in rural communities.

Why This Matters for Canadian Patients
Pharmaceutical distributors play a critical role in the drug supply chain, ensuring next-day delivery of over 90% of the medicines consumed by Canadians, reaching over 12,000 hospitals and pharmacies nationwide. Despite their pivotal role, distributors are not directly targeted by PMPRB's guidelines, but are undoubtedly impacted by any changes to drug pricing policies.

CAPDM’s submission to the PMPRB highlights the unintended consequences that new price regulations may have on the distribution system. As the prices of patented medicines are lowered, the funding that supports distribution—directly linked to these prices—diminishes. This reduction in funding could result in lower inventory levels, reduced service capacity, and a greater risk of drug shortages, especially in regions where reliable access is already fragile.

Key Concerns Raised by CAPDM

  1. Sustainability of Drug Distribution: CAPDM warns that ongoing reductions in drug prices, coupled with escalating operating costs, have placed immense pressure on the pharmaceutical distribution sector. Factors such as fuel costs, labour, regulatory demands, and cold-chain logistics have driven operational costs to unprecedented levels. This situation is further complicated by global supply chain disruptions and geopolitical tensions, increasing the risk of drug shortages.
  2. Impact on Rural Communities: Distributors serve some of the most remote parts of Canada. Any disruption in their ability to maintain buffer stock or deliver medications promptly would disproportionately affect patients in rural areas, creating barriers to timely access.
  3. Physical Access to Medications: CAPDM believes that reducing the prices of existing drugs will not improve patient access but will instead hinder it by destabilizing the already fragile drug supply chain. We emphasize the importance of maintaining stable distribution funding to ensure that all Canadians continue to have access to the medicines they need.​

CAPDM’s Recommendations to the PMPRB
To address these concerns, CAPDM offers three key recommendations to safeguard the pharmaceutical distribution sector and patient access to medications:

  1. Limit Application of New Guidelines to New Drugs: CAPDM urges applying the new guidelines only to new drugs, exempting existing ones to avoid disruptions in distribution and patient care. If exemption isn’t possible, a mechanism similar to a confidential listing agreement should be introduced. A three-year delay in reviewing prices of existing drugs would also allow time for the supply chain to adapt and manage inventory effectively, ensuring continued access to medications across Canada.
  2. Adopt the Highest International Price (HIP) for New Drugs: Using HIP as the standard for international price comparisons would balance price reductions with the need to maintain viable supply chains, ensuring that Canadian patients do not experience drug shortages due to underfunded distribution systems.
  3. Report on Supply Chain Impacts: Use the power to report to the Governor-in-Council, conferred on the Council by section 100 of the Patent Act, to inform the government of the broader economic effects that drug pricing decisions have on the pharmaceutical supply chain, including distributors, pharmacies, and patients. This would equip the government with valuable insights into the economic challenges faced by distributors, enabling them to make informed decisions about reinvesting in drug distribution to help offset the losses experienced by these critical players in the healthcare system.
A Call for Collaborative Solutions

At CAPDM, we recognize the importance of balancing medication affordability with accessibility. We remain committed to working with the PMPRB and other key stakeholders to develop sustainable policies that protect both. As we face a future filled with challenges—ranging from global supply chain disruptions to the rising costs of drug distribution—it is essential that the voices of all stakeholders, including pharmaceutical distributors, are heard and considered in these vital discussions.

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