On this webinar, we’ll hear from experts on the issue and invite an open conversation with stakeholders. We need discussion, shared questions and answers and a review of case studies, which is why we are hosting this session. Panelist: Neil Palmer, Principal Consultant, WN Palmer & Co. and former PMPRB staff Michael Dietrich, Executive Director, Policy, Innovative Medicines Canada Laurene Redding, Global Head, Strategic Pricing (ex-China), BeiGene Durhane Wong-Rieger, President & CEO, CORD Moderator: Bill Dempster, CEO, 3Sixty Public Affairs

1. PMPRB NEW Guidelines
and Impact on Rare Diseases
November 18, 2022

2. FOR PMPRB
• Lives matter. Explore impact of pricing policies on patients’ lives and build polices
to support drugs getting to Canadian patients
• PMPRB should act less like a punitive body and more like a “public good” agency. Collaborate
with patients, clinicians, payers, and other stakeholders to arrive at pricing guidelines that work
for all
• If goal is 20% reduction toward OECD median, as announced, implement new 11-country
comparison; economic factors assessed by CADTH/INESSS as starting point for negotiation; do
not set PMPRB maximum $/QALY
FOR POLICY MAKERS
• This next generation of drugs are revolutionary. Ensure that Canada’s pharmaceutical policies,
including pricing policies, will allow Canadians to have access as soon as possible
• STOP the PMPRB … until all of the proper consultations and considerations have been conducted
• Expand upon COVID-19 Public-Private partnerships between government and pharmaceutical
industry. Engage Early in development process; Communicate Continuously; Seek Preferred
Partner Pricing
Recall where we were TWO YEARS ago
2

3. Neil Palmer Principal Consultant
Michael Dietrich Executive Director – Policy
Laurene Redding Global Head – Strategic Pricing (ex. China)
Durhane Wong-Rieger President and CEO
Bill Dempster
(Moderator)
Today’s panel
3

4. Canadian pathway for medicines is already uncertain and long
Health technology
assessments
• Comparative clinical
and economic reviews
pCPA
• Long and uncertain
process (10 months on
average)
• $3.4 billion in rebates
to public plans
PMPRB
• Reform has created
significant business
uncertainty over past 6
years
• Damaged Canada’s
position in global launch
sequencing
Provincial listings
• Long and variable from
one province to
another
Since mid-2019, of the 140
medicines approved by
FDA, less than half have
been submitted to Health
Canada
4

5. 5
Number of annual NAS launches in Canada has declined every year
since 2016 and lags behind the global NAS launches
5

6. Rare disease drugs face a funnel of uncertainty in Canada
( f u n d i n g fo r o r p h a n d r u g s a p p ro ve d b y E M A f ro m J a n . 2 0 1 5 – M a r. 2 0 2 0 )
Source: Ward et al. Orphanet Journal of Rare Diseases (2022) 17:113: https://doi.org/10.1186/s13023-022-02260-6
63 drugs with EMA approval and orphan designation
44 drugs with Health Canada approval
30 drugs with positive
CADTH recommendation
(20 INESSS)
24 drugs with
completed pCPA
negotiation
6

7. What is the Patented Medicine Prices Review Board
(PMPRB)?
• Federal Quasi-Judicial Regulatory Agency
• Two functions: regulate patented medicine prices; reports
• Regulatory mandate is to ensure that prices for patented
medicines are not “excessive”
— Determines the maximum prices that can be charged for patented
medicines in Canada
— Previous guidelines: assed prices based on a treatment’s therapeutic
value vs. alternatives; considered prices for same medicine in 7 other
countries:
GERMANY
FRANCE UK ITALY SWEDEN SWITZERLAND USA
PMPRB7
7

8. The current situation: the “interim” period
• “Economic factors” removed from
the regulations by Health Canada
(and courts):
— pharmacoeconomic value
— market size adjustment
• New reference countries – basket of
11 rather than 7
• New regulations implemented on
July 1, 2022
• Currently an “interim period” – new
guidelines are not in effect – no rules
for “new” medicines launched since
July 1
• So what could go wrong?
New list (PMPRB-11)
FRANCE UK BELGIUM NORWAY
GERMANY ITALY JAPAN SPAIN
SWEDEN
USA
NETHERLANDS AUSTRALIA
SWITZERLAND
USA & Switzerland removed
from original PMPRB-7
Added to
original
PMPRB-7
8

9. How the changes continue
to be problematic
• What will price reductions be?: Previous
analyses suggested 20% price decrease due to
basket of countries, however…
• No certainty of pricing: Impossible to know what
the impact will be – there are no longer any price
tests – just criteria that “may” start
investigations; process is vague, complicated and
untried anywhere else
• Reference: Canada’s prices are a direct and
indirect reference country for other markets
• Pharmacare / rare disease drug program: Not
connected to pharmacare programs or any
guarantee of funding
Source: PMPRB Guidelines, 2022
9

10. The PMPRB explored
this issue – going back
to 1989
Where is the guidance?
10

11. Potential Impact of Proposed PMPRB 2022 Guidelines on New Medicines
PMPRB-11 Median = 0.86
PMPRB11 Country
Annotated by N Palmer / PDCI
Reduction to Median International Price Lower of… combinations of MIPC, LIPC, dTCC
©2022 PDCI Market Access 11

12. Proposed Guidelines Focus on low prices inconsistent with Court rulings
Federal Court of Appeal (Alexion)
• Over and over again, authorities have stressed that the excessive pricing provisions
in the Patent Act are directed at controlling patent abuse, not reasonable pricing,
price-regulation or consumer protection at large.
• Were the excessive pricing provisions of the federal Patent Act aimed at reasonable
pricing, price-regulation or consumer protection at large, they would be
constitutionally suspect…”
• By obfuscating, the Board has effectively put itself beyond review on this point
[relying on the lowest international price], asking the Court to sign a blank cheque in
its favour. But this Court does not sign blank cheques.
©2022 PDCI Market Access 12

13. PMPRB 2022 Draft Guidelines –Takeaways
• PMPRB “Modernization”: intent is to make Canada a “low” price country
• Launch sequencing is an industry best practice (high price countries first)
• Innovation (level of therapeutic improvement) ignored – impactful for rare disease drugs
• Benefit of patent monopoly (ie price premium) doesn’t apply to pharma / biotech
industry
• Landmark court decisions ignored by PMPRB
• The “Policy Intent” cited by PMPRB is at best “constitutionally suspect”
• Impact on price ceilings of latest draft guidelines significantly more severe
• Vague guidelines (“investigation criteria”) engenders uncertainty for industry
• Overall, PMPRB will be perceived as a barrier to entry to the Canadian market for
innovative new drugs
©2022 PDCI Market Access 13

14. 14
Why should government and stakeholders pay attention?
Life Sciences Strategy
Cross purposes to
Canadian LS leadership:
Will Minister Champagne
intervene?
PMPRB resolution
PMRPB wants to go further
than the basket changes.
This will prevent all parties
from moving forward.
Rare Disease Strategy
Antithetical to RD
strategy success where
Gov’t wants a win and we
all want progress!
ACCESS and investment
Foreseeable impacts to
new medicines in Canada
(where already lags peers)

15. 15
Key Challenge:Targets future products, even in some cases
where Canadian prices are below international prices
Median
dTCC (e.g. old generic)
List price
Mid-point of
dTCC and
Lowest
Lowest
Who decides price test?
Lack of predictability for companies
Launch
?
consistent???
“The dTCC is more than 50% lower than the lowest
international price, and the list price exceeds the midpoint
between the dTTC and lowest international price.”

16. 16
Key Challenge: Incentive to delay launch to avoid
automatic PMPRB investigation?
Launch Order (time)
Product automatically under investigation
if Canada is the first International launch
(i.e. only avail in U.S.)
investigation
Investigation avoided by delaying
launch

17. Consultations on guidelines (due Dec 5th!)
and resources to learn more and share
• Stakeholder input via PMPRB – DUE DECEMBER 5th:
https://www.canada.ca/en/patented-medicine-prices-
review/services/consultations/2022-proposed-updates-guidelines.html
• PDCI early insights on the draft guidelines https://www.pdci.ca/pdcis-early-insights-
on-pmprb-draft-guidelines/
• Sharing site for those developing submissions: https://www.pdci.ca/sharing-
responses/
17

18. 18