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Canada Pharmaceutical companies file constitutional challenge to Canada’s new drug price regulations

A group of pharmaceutical companies is taking the federal government to court over its plan to reduce Canada’s drug prices, arguing Ottawa does not have the constitutional authority to set ceiling prices for medications.

Several prominent drug-makers, including Merck Canada Inc., Janssen Inc. and Boehringer Ingelheim Canada Ltd., filed the constitutional challenge on Friday, two days after the Trudeau government passed final regulations beefing up the powers of the Patented Medicine Prices Review Board (PMPRB,) the agency that controls the prices of brand-name drugs.

Companies have said lower prices will make international drug manufacturers less likely to bring new medications to Canada.

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“The changes recently made by the federal government to the patented medicines regulations will slow and limit Canadians’ access to new breakthrough medicines,” a spokeswoman for Merck said by e-mail on Friday.

“We are also very concerned that the changes will have a negative impact on the 30,000 high-quality jobs in the life-sciences sector across Canada and will limit our ability to invest in health research programs and clinical trials in Canada, which provide Canadians with access to potentially life-saving new medications.”

Other companies participating in the court challenge include Servier Canada Inc. and Bayer Inc.

The five companies – all of which provided The Globe and Mail with a similar statement – say the federal government does not have the authority to regulate drug prices because health care is a provincial responsibility.

Health Canada declined to comment because the case is before the courts.

Innovative Medicines Canada (IMC), an industry group representing more than 40 brand-name drug-makers, also declined to comment because it is not a party to the case.

The constitutional challenge comes less than two months before a federal election in which drug prices and drug spending could be key issues.

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Canada has either the third-highest or fourth-highest drug prices in the Organization for Economic Co-operation and Development (OECD), depending on how average prices are measured.

In June, a Liberal government appointed advisory panel led by former Ontario health minister Eric Hoskins, recommended Canada adopt a single-payer national pharmacare program that would do for drugs what medicare did for care in hospitals and doctors’ offices.

Earlier this month, Health Minister Ginette Petitpas Taylor said the government needed to focus on cutting drug prices before it could move forward with national pharmacare. She called the new regulations a step in that direction.

The review board has been regulating ceiling prices for patented drugs since 1987.

The regulator used to determine those ceilings by measuring the Canadian “list” or sticker prices of drugs against prices in seven other well-off countries, including the United States, which has the highest drug prices in the world.

More than two years in the making, the new regulations remove the U.S. and Switzerland from the list and add other countries with lower drug prices.

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The changes also empower the board to take into account a drug’s value-for-money when setting maximum prices.

The changes, to take effect on July 1, 2020, have been lauded by drug-policy experts and some patient groups that are worried about high drug prices.

Other patient groups agree with the pharmaceutical industry’s contention that the overhaul is likely to discourage companies from offering new medications in Canada.

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