1. Outreach Sessions Montreal, November 22, 2012Toronto, November 23, 2012 Patented Medicine Prices Review Board Regulatory Affairs and Outreach Branch

2. Overview  Regulatory Filing – Latest Changes  Form 1  Form 2 Block 1, 2, 3  Interim Maximum Average Potential Price (MAPP)  DIP Methodology  Simplified  Regular  PMPRB 101 2

3. Regulatory Filing Latest Changes in Form 1 and Form 2 Block 1, 2, 3 3

4. 4 Changes in Form 1

5. 5

6. 6

7. 7

8. 8 Changes in Form 2, Block 1, 2, 3

9. 9

10. 10 Changes in Form 2, Block 1, 2, 3

11. 11 Interim Maximum Average Potential Price (MAPP)

12. 12 Interim MAPP Compendium of Policies, Guidelines and Procedures, Schedule 5, Section 1.3 1.3 When the new patented drug product is sold in fewer than five countries at the time it is first sold in Canada, the median international price will be calculated on an interim basis. At the end of three years or when the same patented drug product with the same strength and dosage form is sold in at least five countries, whichever occurs first, Board Staff will re-determine the median international price. Whenever this occurs, the drug product’s Non-Excessive Average Price will be the lower of: (a)The re-determined median international price, and (b)The Non-Excessive Average Price derived from the ordinary application of the CPI-Adjustment Methodology (see Schedule 9).

13. Substantial Improvement Higher of: - Top of TCC - MIPC Level of Therapeutic Improvement MIPC in Introductory Price Tests BreakthroughMIPC Introductory Price Tests 13 If no comparator is identified Or if price of comparator is excessive Or if cannot derive dosage regimen Or If no public price is found MIPC Moderate Improvement Higher of: - Mid point (Top of TCC and MIPC) - Top TCC Slight/No Improvement Top of TCC Lower of: - Bottom of TCC - MIPC

14. 14 Interim MAPP: Example 1 (MIPC)  Drug product A introduced in March 2010  Pivotal test establishing the MAPP at introduction : Median International Price Comparison (MIPC) test  In 2010, Drug product A is sold in Italy ($10) and in the US ($20) Interim MIPC = Interim MAPP (2010) = $15

15. 15 Interim MAPP: Example 1 (MIPC) Scenario 1: Three years (2013)  In 2011, 2012 and 2013, drug A still sold in only 2 countries MIPC = $15  Post-Interim MAPP is set by MIPC  2013 N-NEAP (based on CPI-Adjustment Methodology) = $14  Impact on future requests for DIP application: IBP remains at $15 Post-Interim MAPP (2013) = $15 Final 2013 N-NEAP = $14

16. 16 Interim MAPP: Example 1 (MIPC) Scenario 2: Five countries (lower PI-MAPP)  In 2012, Drug product A is now sold in 5 countries: Italy ($10), France ($10), Germany ($10), Switzerland ($10), US ($20) MIPC = $10  Post-Interim MAPP is set by MIPC  N-NEAP (based on CPI-Adjustment Methodology) in 2012 is $13  If 2012 N-ATP > Final 2012 N-NEAP, Company is given one year to adjust N-ATP to be ≤ 2013 N-NEAP (2012 N-NEAP + CPI)  Impact on future requests for DIP application: IBP reset in 2012 to $10 Post-Interim MAPP (2012) = $10 Final 2012 N-NEAP = $10

17. 17 Interim MAPP: Example 1 (MIPC) Scenario 3 : Five countries (higher PI-MAPP)  In 2012, Drug product A is now sold in 5 countries: Italy ($10), France ($17), Germany ($17), Switzerland ($17), US ($20) MIPC = $17  Post-Interim MAPP is set by MIPC  N-NEAP (based on CPI-Adjustment Methodology) in 2012 is $13  Impact on future requests for DIP application: IBP remains at $15 Post Interim MAPP (2012) = $17 Final 2012 N-NEAP = $13

18. 18 Interim MAPP: Example 2 (Higher of TCC and MIPC)  Drug product A introduced in March 2010  Level of therapeutic improvement : Substantial Improvement  Test establishing the MAPP at introduction : Higher of top of Therapeutic Class Comparison (TCC) test and the MIPC test  In 2010, top of TCC = $10 A is sold in Italy ($10) and in the US ($20) Interim MIPC = $15  In this case, the Interim MAPP is set by the Interim MIPC Interim MAPP (2010) = $15

19. 19 Interim MAPP: Example 2 (Higher of TCC and MIPC) Scenario 1 : Three years (2013)  Drug product A still sold in only 2 countries. MIPC =$15  Post-Interim MAPP is set by MIPC  N-NEAP (based on CPI-Adjustment Methodology) = $14  Impact on future requests for DIP application: IBP remains at $15 Post-Interim MAPP (2013) = $15 Final 2013 N-NEAP = $14

20. 20 Interim MAPP: Example 2 (Higher of TCC and MIPC) Scenario 2 : Five countries (lower PI-MAPP)  In 2012, Drug product A now sold in 5 countries: Italy ($10), France ($9), Germany ($9), Switzerland ($9), US ($20) MIPC = $9  Post-Interim MAPP is set by TCC ($10)  N-NEAP (based on CPI-Adjustment Methodology) in 2012 is $13  If 2012 N-ATP > Final 2012 N-NEAP ($10) Company will be given one year to adjust N-ATP to be ≤ 2013 N-NEAP (2012 N-NEAP + CPI)  Impact on future requests for DIP application: IBP reset in 2012 to $10 Post-Interim MAPP (2012) = $10 Final 2012 N-NEAP = $10

21. 21 Interim MAPP: Example 2 (Higher of TCC and MIPC) Scenario 3 : Five countries (higher PI-MAPP)  In 2012, Drug product A now sold in 5 countries: Italy ($10), France ($17), Germany ($17), Switzerland ($17), US ($20) MIPC = $17  Post-Interim MAPP is set by MIPC  N-NEAP (based on CPI-Adjustment Methodology) in 2012 is $13  Impact on future requests for DIP application: IBP remains at $15 Post-Interim MAPP (2012) = $17 Final 2012 N-NEAP = $13

22. 22 Interim MAPP: Example 3 (Higher of TCC and Mid Point)  Drug product A introduced in March 2010  Level of therapeutic improvement : Moderate Improvement  Test establishing the MAPP at introduction : Higher of top of TCC test and Mid Point (Average of top of TCC and MIPC)  In 2010, Top of TCC = $10 Drug product A is sold in Italy ($10) and the US ($20) Interim MIPC = $15 Mid Point = $12.50 Interim MAPP is set by Mid Point Interim MAPP (2010) = $12.50

23. 23 Interim MAPP: Example 3 (Higher of TCC and Mid Point) Scenario 1: Three years (2013)  Drug product A is still only sold in 2 countries MIPC =$15  Mid Point = $12.50  Post-Interim MAPP is set by Mid Point  N-NEAP (based on CPI-Adjustment Methodology) in 2013 is $13  If 2013 N-ATP > Final 2013 N-NEAP ($12.50) Company will be given one year to adjust N-ATP to be ≤ 2014 N-NEAP (2013 N-NEAP + CPI)  Impact on future requests for DIP application: IBP remains at $12.50 Post-Interim MAPP (2013) = $12.50 Final 2013 N-NEAP = $12.50

24. 24 Interim MAPP: Example 3 (Higher of TCC and Mid Point) Scenario 2: Five countries (lower PI-MAPP)  In 2012, Drug product A now sold in 5 countries: Italy ($10), France ($9), Germany ($9), Switzerland ($9), US ($20) MIPC = $9 Mid Point = $9.50  Post-Interim MAPP is set by TCC ($10)  N-NEAP (based on CPI-Adjustment Methodology) in 2012 is $13  If 2012 N-ATP > Final 2012 N-NEAP ($10) Company will be given one year to adjust N-ATP to be ≤ 2013 N-NEAP (2012 N-NEAP + CPI)  Impact on future requests for DIP application: IBP reset in 2012 to $10 Post-Interim MAPP (2012) = $10 Final 2012 N-NEAP = $10

25. 25 Interim MAPP: Example 3 (Higher of TCC and Mid Point) Scenario 3: Five countries (higher PI-MAPP)  In 2012, Drug product A now sold in 5 countries: Italy ($10), France ($17), Germany ($17), Switzerland ($17), US ($20) MIPC = $17 Mid Point = $13.50  Post-Interim MAPP is set by the Mid Point  N-NEAP (based on CPI-Adjustment Methodology) in 2012 is $13  Impact on future requests for DIP application: IBP remains at $12.50 Post-Interim MAPP (2012) = $13.50 Final 2012 N-NEAP = $13

26. Interim MAPP – Meaning and implications - A MAPP based on any test that includes a MIPC test is interim when the MIPC is based on data from less than 5 countries. - A post interim MAPP is calculated 3 years after intro or when the drug product is sold in five countries, whichever comes first. - The final N-NEAP will be the lower of the post-interim MAPP and the N-NEAP based on the CPI-Adjustment Methodology 26

27. DIP Methodology 27

28. Simplified DIP Methodology: Reminders  Patentee acquires DIN from previous patentee prior to January 1, 2010: patentee to obtain original IBP from previous patentee for DIP applications  Benefits at introduction: consider reporting transactions with and without benefits on separate lines in Form 2 Block 4  Pay attention to Form 2 Block 5 Canada price 28 2003200420052006 Form 2 Block 5 Canada $20.00$16.00 N-ATP $20.00$12.00 $20.00 IBP/IBP* $20.00$16.00

29. Regular DIP Methodology: Calculation of IBP* Block 5 Canada price increase < annual (one year) CPI Use lower of : annual (one year) CPI and % increase of Form 2 Block 5 Canada price 29 200520062007200820092010 Form 2 Bl5 Canada $0.8085$0.8284 $0.8391 $0.8533 % Bl5 increase 2.5% 1.3%1.7% % annual CPI2% 2.1%2.4%0.3%1.8% IBP/IBP* $0.8085$0.8101 $0.8206 $0.8346 N-ATP $0.8085$0.7958$0.7724$0.7277$0.7304$0.8300 N-NEAP $0.8085$0.8247$0.8213$0.8002$0.7313$0.7501

30. Regular DIP Methodology: Calculation of IBP* No increase in Form 2 Block 5 Canada price for at least 3 years Use lower of: Cap % increase in Form 2 Block 5 30 200520062007200820092010 Form 2 Bl5 Canada $0.8085$0.8284 $0.8533 % Bl5 increase 2.5%3% % annual CPI2% 2.1%2.4%0.3%1.8% Cap 3%3.2%3.6%0.5% 2.7% IBP/IBP* $0.8085$0.8101 $0.8320 N-ATP $0.8085$0.7958$0.7724$0.7277$0.7304$0.8300 N-NEAP $0.8085$0.8247$0.8213$0.8002$0.7313$0.7501

31. Regular DIP Methodology: Calculation of IBP* When Form 2 Block 5 Canada price increases every year, CPI-Adjustment Methodology considered. 2010 CPI 0.8412 X 1.045 = 0.8791 CAP 0.8606 X 1.027 = 0.8838 % Bl5 increase 0.8606 X 1.022 = 0.8795 31 200520062007200820092010 Form 2 Bl5 Canada $0.8085$0.8284$0.8450$0.8872$0.8961$0.9158 % Bl5 increase 2.5% 2% 0.3% 2.2% % annual CPI2% 2.1%2.4%0.3%1.8% % Cap 3%3.2%3.6%0.5%2.7% % CPI Adj. Factor 2%4.2%6.6%4.9% 4.5% IBP/IBP* $0.8085$0.8247$0.8412$0.8580$0.8606$0.8791 N-ATP $0.8085$0.7958$0.7724$0.7277$0.7304$0.8300 N-NEAP $0.8085$0.8247$0.8213$0.8002$0.7313$0.7501

32. PMPRB 101 32

33. SOLD OUT PMPRB 101  Where? PMPRB office, 14 th floor, 333 Laurier Avenue West, Ottawa  When? December 6, 2012 from 10:00 a.m. to 3:30 p.m.  For whom? Employees from pharmaceutical companies who need to understand PMPRB basic operations such as filing, calculation of intro prices and ongoing NEAPs  What? Introduction to PMPRB processes 33

34. The different forms that need to be filed Section 82: Notification of Intent to Sell Form 1 Form 2 Overview of Filing Session for PMPRB 101 Filing timelines 34 Reporting process

35. Overview of Filing Session for PMPRB 101 35 Failure to File Common filing errors Compliance Status Reports Where to find the forms on the PMPRB website

36. Overview of the Introductory Price Analysis Scientific Review  Submission Process for Scientific Data on New Drug Products  Human Drug Advisory Panel (HDAP)  Scientific Review Process  Levels of Therapeutic Improvement  Selection of Comparators  Selection of Dosage Regimens 36

37. Introductory Price Review  Introductory Price Tests  Median International Price Comparison (MIPC)  Therapeutic Class Comparison (TCC)  Mid-point  Reasonable Relationship (RR)  Highest International Price (HIPC)  Criteria for Investigation at Introduction  Communication of Results to Patentees 37 Overview of the Introductory Price Analysis

38. 38 Price Review of Existing Medicines CPI Adjustment Methodology Highest International Price Comparison PMPRB 101 Let’s Talk Numbers Exchange Rates Verification of International Prices Calculating ex-factory prices Criteria for an investigation Application forms for the DIP Methodology

39. 39 Communication with Board Staff  Query to PMPRB Staff  Guidelines: Ginette Tognet Tel: (613) 954-8297E-mail: ginette.tognet@pmprb-cepmb.gc.ca  Scientific and new meds: Catherine Lombardo Tel: (613) 952-7620E-mail: catherine.lombardo@pmprb-cepmb.gc.ca  Filing Form 1 and 2: Beatrice Mullington Tel: (613) 952-2924E-mail: beatrice.mullington@pmprb-cepmb.gc.ca  Investigation: Senior Regulatory Officer assigned to Company  Form 3: Lokanadha Cheruvu Tel: (613) 954-9812E-mail: lokanadha.cheruvu@pmprb-cepmb.gc.calokanadha.cheruvu@pmprb-cepmb.gc.ca  Website: Carol McKinley Tel: (613) 960-4550E-mail: carol.mckinley@pmprb-cepmb.gc.cacarol.mckinley@pmprb-cepmb.gc.ca  All other questions: 1-877-861-2350 pmprb@pmprb-cepmb.gc.capmprb@pmprb-cepmb.gc.ca