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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 - PowerPoint PPT PresentationTRANSCRIPT
Regular DIP Methodology – a refresher
Ottawa, May 16, 2013
Patented Medicine Prices Review BoardRegulatory Affairs and Outreach Branch
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
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Overview
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Preparing for a successful DIP application
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*.
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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/tabletPrice 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
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Benefits at Introduction
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
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Benefits at Introduction
4 SALES OF THE MEDICINE BY THE PATENTEE IN FINAL DOSAGE FORM IN CANADA 1
Drug Identif ication Number (DIN) or Assigned Number Strength/Unit Dosage Form Package Size
Number of Packages Sold INDICATE EITHER (6) Province
Class of Customer
(2) (3) (3,4) (3,5) (5) Net Revenue AVG Price/Package (4) (4)1234567 1 MG/TAB S1 10.00 500.00 100000.0000 6 1
1234567 1 MG/TAB S1 10.00 500.00 100000.0000 6 1
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
4 SALES OF THE MEDICINE BY THE PATENTEE IN FINAL DOSAGE FORM IN CANADA 1
Drug Identif ication Number (DIN) or Assigned Number Strength/Unit Dosage Form Package Size
Number of Packages Sold INDICATE EITHER (6) Province
Class of Customer
(2) (3) (3,4) (3,5) (5) Net Revenue AVG Price/Package (4) (4)1234567 1 MG/TAB S1 10.00 500.00 100000.0000 6 11234567 1 MG/TAB S1 10.00 500.00 75000.0000 6 1
Are you selling above your list price?
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Block 5 Canadian list price
2009 2010 2011 2012Form 2 Block 5 Canada $20.00 $20.00 $20.00 $20.00ATP $20.00 $19.00 $19.00 $21.00
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.
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Block 5 Canadian list price
2007 2008 2009 2010 2011 2012
Form 2 Bl5 Canada $20.0000 $20.6000 $20.6000 $20.6000 $20.6000 $20.9000
% Bl5 increase 3.0% 1.4%
% annual CPI 2.4% 0.3% 1.8% 2.9% 1.5%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800 $20.4800 $20.7664
N-ATP $20.0000 $19.0000 $18.0000 $17.0000 $17.0000 $21.0000
MAPP/N-NEAP $20.0000 $20.4800 $19.0950 $18.4860 $17.7480 $17.3910
Block 5 prices as originally filedNo more benefits in 2012 – investigationRegular DIP Methodology not successful; ATP>IBP*
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Block 5 Canadian list price
2007 2008 2009 2010 2011 2012
Prices reported in Part B (and substantiated)
$20.0000 $20.6000 $20.6000 $20.6000 $20.9000 $21.2000
% Bl5 increase 3.0% 1.5% 1.4%
% annual CPI 2.4% 0.3% 1.8% 2.9% 1.5%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800 $20.7872 $21.0782
N-ATP $20.0000 $19.0000 $18.0000 $17.0000 $17.0000 $21.0000
N-NEAP $20.0000 $20.4800 $19.0950 $18.4860 $17.7480 $17.3910
Prices reported in Part B (copies of list prices provided)No more benefits in 2012 – investigationRegular DIP Methodology successful; ATP<IBP*
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Invoking the Regular DIP Methodology
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APPLICATION FORM TO INVOKE THE DIP METHODOLOGY
Which methodology are you invoking: Simplified DIP (Please complete Part A only)
Regular DIP (Please complete Part A and Part B)
PART A
Background Information: Please describe the circumstances that support the application of the DIP methodology to this DIN
Product Information
Brand Name: Generic Name:
DIN: Strength/Unit: Period of Review:
Application forms
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Description of the benefit: Please indicate when the benefit commenced and was terminated, the type and value of the benefit, customer classes that received it, whether there are on-going benefits, etc.
Certified by I hereby certify that the information presented is true and correct.
Signature of duly authorized person for the reporting patentee: Name: Title: Organization: Date: Tel Number: ( ) Fax Number: ( ) E-mail:
Please send the completed Form to the PMPRB Senior Regulatory Officer assigned to your company
Application forms
Part A: as described previously Part B
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PART B Price Increase Chart
Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
List Price (price/unit)
% List Price Increase
Maximum Selling Price/Unit
Effective Date of List Price increase
Year 1
Application forms
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
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Regular DIP application
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Regular DIP application
PART B Price Increase Chart
2007 2008 2009 2010 2011 2012
List Price (price/unit) 20.00 20.00 20.00 20.00 21.00 21.00 21.00
% List Price Increase 5.00%
Maximum Selling Price/Unit 20.00 20.00 20.00 20.00 21.00 21.00 21.00
Effective Date of List Price increase 1-Apr-10
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
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:
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Regular DIP application
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Regular DIP application
PART B Price Increase Chart
2007 2008 2009 2010 2011 2012
List Price (price/unit) 20.00 20.00 20.00 20.00 21.00 21.00 21.00
% List Price Increase 5.00%
Maximum Selling Price/Unit 20.00 20.00 20.00 20.00 21.00 21.00 21.00
Effective Date of List Price increase 1-Apr-10
Quebec 2007 2008 2009 2010 2011 2012
List Price (price/unit) 15.00 15.00 15.00 15.00 15.60 15.60 15.60
% List Price Increase 4.00%
Maximum Selling Price/Unit 15.00 15.00 15.00 15.00 15.60 15.60 15.60
Effective Date of List Price increase 1-Apr-10
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
Regular DIP Methodology: Calculation of IBP*
To calculate the IBP*, Board Staff applies the lower of the1) CPI Methodology and 2) The Block 5 increases *Subject to the Highest International Price
However there are two “Quick tips”.
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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
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2007 2008
Form 2 Bl5 Canada $20.0000 $20.6000
% Bl5 increase 3.0%
% annual CPI 2.4%
IBP/IBP* $20.0000 $20.4800
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
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2007 2008 2009 2010 2011 2012
Form 2 Bl5 Canada $20.0000 $20.0000 $20.0000 $20.0000 $20.0000 $20.5000
% Bl5 increase 2.5%
Cap 3.6% 0.5% 2.7% 4.4% 2.3%
IBP/IBP* $20.0000 $20.0000 $20.0000 $20.0000 $20.0000 $20.4600
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
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2007 2008 2009 2010 2011 2012
Form 2 Bl5 Canada $20.0000 $20.5000 $20.5615 $20.8700 $21.2875 $21.6068
% Bl5 increase 2.5% 0.3% 1.8% 2.0% 1.5%
% annual CPI 2.4% 0.3% 1.8% 2.9% 1.5%
% Cap 3.6% 0.5% 2.7% 4.4% 2.3%
% CPI Adj. Factor 2.4% 2.7% 4.5% 5.1% 6.3%
IBP/IBP* $20.0000 $20.4800 $20.5414 $20.9000 $21.3180 $21.6378
N-ATP $20.0000 $19.5000 $19.0000 $18.5000 $18.0000 $21.5000
N-NEAP $20.0000 $20.4800 $19.5975 $19.5130 $19.3140 $18.4140
Regular DIP Methodology: Calculation of IBP*
Block 5 Canada price decrease
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2007 2008
Form 2 Bl5 Canada $20.0000 $19.5000
% Bl5 increase
% annual CPI 2.4%
IBP/IBP* $20.0000 $19.5000
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.
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Understanding what happens after successfully invoking the
Regular DIP
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
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What happens after successfully invoking the Regular DIP Methodology?
Regular DIP Methodology
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2007 2008 2009 2010 – Yr. 1 2011 – Yr. 2
List Price Canada $20.0000 $20.5000 $20.5000 $20.5000 $20.5000
% list price increase 2.5%
% annual CPI 2.4% 0.3% 1.8% 1.5%
Cap 3.6% 0.5% 2.7%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800 $20.4800
N-ATP $20.0000 $19.0000 $18.0000 $20.0500
N-NEAP $20.0000 $19.4560 $18.4860 $20.0500 $20.3508
Regular DIP applied in 2010 (Year 1)
Regular DIP Methodology: Scenario 1
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2007 2008 2009 2010 – Yr. 1 2011 – Yr. 2
List Price Canada $20.0000 $20.5000 $20.5000 $20.5000 $20.5000
% list price increase 2.5%
% annual CPI 2.4% 0.3% 1.8% 1.5%
Cap 3.6% 0.5% 2.7%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800 $20.4800
N-ATP $20.0000 $19.0000 $18.0000 $20.0500 $20.2500
N-NEAP $20.0000 $19.4560 $18.4860 $20.0500 $20.3508
Scenario 1 – Year 2 N-ATP < Year 2 N-NEAP
Regular DIP Methodology: Scenario 2
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2007 2008 2009 2010 – Yr. 1 2011 – Yr. 2
List Price Canada $20.0000 $20.5000 $20.5000 $20.5000 $20.5000
% list price increase 2.5%
% annual CPI 2.4% 0.3% 1.8% 1.5%
Cap 3.6% 0.5% 2.7%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800 $20.4800
N-ATP $20.0000 $19.0000 $18.0000 $20.0500 $20.4500
N-NEAP $20.0000 $19.4560 $18.4860 $20.0500 $20.3508
Scenario 2 – Year 2 N-ATP > Year 2 N-NEAP,But < IBP*
Regular DIP Methodology: Scenario 2Post Regular DIP application in Year 2
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2007 2008 2009 2010 – Yr. 1 2011 – Yr. 1
List Price Canada $20.0000 $20.5000 $20.5000 $20.5000 $20.5000
% list price increase 2.5%
% annual CPI 2.4% 0.3% 1.8% 1.5%
Cap 3.6% 0.5% 2.7%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800 $20.4800
N-ATP $20.0000 $19.0000 $18.0000 $20.0500 $20.4500
N-NEAP $20.0000 $19.4560 $18.4860 $20.0500 $20.4500
Scenario 2 – Year 2 N-ATP > Year 2 N-NEAP,But < IBP*
Regular DIP Methodology: Scenario 3
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2007 2008 2009 2010 – Yr. 1 2011 – Yr. 2
List Price Canada $20.0000 $20.5000 $20.5000 $20.5000 $20.5000
% list price increase 2.5%
% annual CPI 2.4% 0.3% 1.8% 1.5%
Cap 3.6% 0.5% 2.7%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800 $20.4800
N-ATP $20.0000 $19.0000 $18.0000 $20.0500 $20.7500
N-NEAP $20.0000 $19.4560 $18.4860 $20.0500 $20.3508
Scenario 3 – Year 2 N-ATP > N-NEAP,and > IBP* - no list price increase in Year 2
Regular DIP Methodology: Scenario 4
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2007 2008 2009 2010 – Yr. 1 2011 – Yr. 2
List Price Canada $20.0000 $20.5000 $20.5000 $20.5000 $20.8075
% list price increase 2.5% 1.5%% annual CPI 2.4% 0.3% 1.8% 1.5%
Cap 3.6% 0.5% 2.7% 2.25%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800
N-ATP $20.0000 $19.0000 $18.0000 $20.0500 $20.7500
N-NEAP $20.0000 $19.4560 $18.4860 $20.0500 $20.3508
Scenario 4 – Year 2 N-ATP > N-NEAP and > IBP*,However - list price increase in Year 2
Regular DIP Methodology: Scenario 4
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2007 2008 2009 2010 – Yr. 1 2011 – Yr. 1
List Price Canada $20.0000 $20.5000 $20.5000 $20.5000 $20.8075
% list price increase 2.5% 1.5%% annual CPI 2.4% 0.3% 1.8% 1.5%
Cap 3.6% 0.5% 2.7% 2.25%
IBP/IBP* $20.0000 $20.4800 $20.4800 $20.4800 $20.7872
N-ATP $20.0000 $19.0000 $18.0000 $20.0500 $20.7500
N-NEAP $20.0000 $19.4560 $18.4860 $20.0500 $20.7500
Scenario 4 – Year 2 N-ATP > N-NEAP and > IBP*,However - list price increase in Year 2
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
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QUESTIONS ?
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