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Patented Medicine Prices Review Board Regulatory Affairs and Outreach Branch

Patented Medicine Prices Review Board Regulatory Affairs and Outreach Branch. Regular DIP Methodology – a refresher Ottawa, May 16, 2013. Preparing for a successful Regular DIP Application Benefits Block 5 Canadian price list Invoking the Regular DIP Methodology Administrative forms

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Patented Medicine Prices Review Board Regulatory Affairs and Outreach Branch

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  1. Patented Medicine Prices Review BoardRegulatory Affairs and Outreach Branch Regular DIP Methodology – a refresher Ottawa, May 16, 2013

  2. Preparing for a successful Regular DIP Application Benefits Block 5 Canadian price list Invoking the Regular DIP Methodology Administrative forms Application-Related Issues and Solutions Understanding what happens after successfully invoking the Regular DIP CPI Methodology Dealing with future increases Overview

  3. Preparing for a successful DIP application

  4. Benefits at Introduction Q: How to apply the DIP Methodology when benefits exist at introduction? A: Report customers with and without benefits as separate lines in the Form 2 Block 4 at introduction and as long as benefits are given. The ATP excluding the benefits will be used to calculate the IBP*.

  5. Example : customers with and without benefits within the same class 2010: Drug product X introduced to Canadian market on September 1 DIN 1234567; strength/unit 1 MG/TAB; dosage form S1; pack size 10; 1000 packages sold only to hospitals, in Ontario Price to some hospitals: $20.00/tablet Price to other hospitals: $15.00/tablet (contract). MAPP is $20.00$/tablet N-ATP is $17.50/tablet H-ATP is $17.50/tablet 2012: Contract ends. Same quantities sold as in 2010 but price is now $20.00 to all hospitals. N-ATP is now $20/tablet Benefits at Introduction

  6. Form 2 Block 4 September-December 2010 N-ATP = $17.50 ; H1-ATP (class without benefits) = $20.00; H2-ATP (class with benefits) = $15.00 Form 2 Block 4 January-June and July-December 2012 Benefits at Introduction N-ATP = $20.00; H1-ATP = $20.00; H2-ATP = $20.00 When invoking the Regular DIP Methodology, the H1-ATP in 2010 (class without benefits) will be used to calculate the IBP* in 2012

  7. Are you selling above your list price? Block 5 Canadian list price Patentees are reminded to ensure that the reported Block 5 and Block 4 data are accurate. An ATP cannot be higher than the list price.

  8. Block 5 Canadian list price Block 5 prices as originally filed No more benefits in 2012 – investigation Regular DIP Methodology not successful; ATP>IBP*

  9. Block 5 Canadian list price Prices reported in Part B (copies of list prices provided) No more benefits in 2012 – investigation Regular DIP Methodology successful; ATP<IBP*

  10. Invoking the Regular DIP Methodology

  11. Application forms

  12. Application forms

  13. Part A: as described previously Part B Application forms

  14. Patented drug product has been sold to various customers since April 1, 2007. Its price became under investigation in 2012. Patentee believes that Regular DIP Methodology can be applied. Only one List Price $20.00/tab in 2007, 2008 and 2009 $21.00/tab in 2010, 2011 and 2012 Price increase was effective as of April 1st 2010 Maximum selling price was list price Regular DIP application

  15. Regular DIP application PART A Drug product information, background and description of benefit to be provided as required in the Form Copies of the List Price to be provided for each year reported in the Price Increase Chart

  16. Patented drug product has been sold to various customers since April 1, 2007. Its price became under investigation in 2012. Patentee believes that Regular DIP Methodology can be applied. Two List Prices: Wholesaler $20.00/tab in 2007, 2008 and 2009 $21.00/tab in 2010, 2011 and 2012 Quebec $15.00/tab in 2007, 2008 and 2009 $15.60/tab in 2010, 2011 and 2012 Price increases were effective as of April 1st 2010 Maximum selling price was list price: Regular DIP application

  17. Regular DIP application PART A Drug product information, background and description of benefit to be provided as required in the Form Copies of the List Price to be provided for each year reported in the Price Increase Chart

  18. Regular DIP Methodology: Calculation of IBP* To calculate the IBP*, Board Staff applies the lower of the CPI Methodology and The Block 5 increases *Subject to the Highest International Price However there are two “Quick tips”.

  19. Regular DIP Methodology: Calculation of IBP* Quick Tip 1: Block 5 Canada price increase vs. annual (one year) CPI Use lower of : annual (one year) CPI and % increase of Form 2 Block 5 Canada price

  20. Regular DIP Methodology: Calculation of IBP* Quick Tip 2: No increase in Form 2 Block 5 Canada price for at least 3 years Use lower of: Cap % increase in Form 2 Block 5

  21. Regular DIP Methodology: Calculation of IBP* When Form 2 Block 5 Canada price increases every year, CPI-Adjustment Methodology considered. 2010 CPI 20.0000 X 1.045 = 20.9000 CAP 20.5414 X 1.027 = 21.0960 % Bl5 increase 20.5414 X 1.018 = 20.9111

  22. Regular DIP Methodology: Calculation of IBP* Block 5 Canada price decrease

  23. DIN previously sold Q: In cases involving the acquisition of a patented drug product prior to January 1, 2010, what is the appropriate Introductory Benchmark Price (IBP) where a patentee acquires a DIN(s) that had been previously sold by another patentee? A: The IBP for the product sold by the second patentee would be equal to the IBP for the product sold by the first patentee provided the second patentee receives this information from the first patentee.

  24. Understanding what happens after successfully invoking the Regular DIP

  25. What happens after successfully invoking the Regular DIP Methodology? A: Change the year in which the Regular DIP is applied to year 1 for the purposes of the CPI-Adjustment Methodology. YR 1 - DIP successfully applied and N-NEAP = N-ATP • Excess revenue = 0 YR 2 - N-NEAP = YR 1 N-NEAP/N-ATP + CPI methodology

  26. Regular DIP Methodology Regular DIP applied in 2010 (Year 1)

  27. Regular DIP Methodology: Scenario 1 Scenario 1 – Year 2 N-ATP < Year 2 N-NEAP

  28. Regular DIP Methodology: Scenario 2 Scenario 2 – Year 2 N-ATP > Year 2 N-NEAP, But < IBP*

  29. Regular DIP Methodology: Scenario 2Post Regular DIP application in Year 2 Scenario 2 – Year 2 N-ATP > Year 2 N-NEAP, But < IBP*

  30. Regular DIP Methodology: Scenario 3 Scenario 3 – Year 2 N-ATP > N-NEAP, and > IBP* - no list price increase in Year 2

  31. Regular DIP Methodology: Scenario 4 Scenario 4 – Year 2 N-ATP > N-NEAP and > IBP*, However - list price increase in Year 2

  32. Regular DIP Methodology: Scenario 4 Scenario 4 – Year 2 N-ATP > N-NEAP and > IBP*, However - list price increase in Year 2

  33. Considerations and General Reminders DIP has to be applied for – the forms must be filled out Pay attention and consider changes to CPI Product must be sold at list price – Block 4 sale Pay attention to your Block 5 data and your MAPP at introduction HIPC is always a factor Your SRO (Senior Regulatory Officer assigned to your company) is always available for discussion on specific issues

  34. QUESTIONS ?

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