Issue link: http://clhia.uberflip.com/i/406567
10 2. Reporting – to report on pharmaceutical trends of all medicines and on R&D spending by pharmaceutical patentees. With respect to pricing, the PMPRB sets the maximum price (the Therapeutic Class price) for new drugs in Canada using a blend of therapeutic improvement reviews and international referencing. PMPRB prices primarily impact those covered by private insurance and those paying out-of-pocket for their drugs and are of lessor importance for those on public drug plans due to the widespread use of product listing agreements (PLAs) by the provinces. b.1.1 Fundamental Reform to PMPRB Mandate The Canadian life and health insurance industry believes that the overall mandate of the PMPRB needs to be fundamentally reformed. Rather than setting therapeutic drug class pricing with the goal of ensuring drug prices "are not excessive" we believe that the mandate should be to strive for prices that are as low as possible based on the prevailing market forces. This would be more in keeping with the overall consumer protection goal of the PMPRB. It would also reduce many of the distortions and inequities currently in the market that result from artificially high PMPRB prices that then incent the proliferation of confidential PLAs by the provinces. Indeed, it is clear that the PMPRB reference price does not represent the true price in the market for the majority of Canadians. Accordingly, we believe that the PMPRB should no longer explicitly target prices against a select group of comparator countries. 7 Rather as we outline in section b.1.2, the PMPRB should use a market-based approach to strive for the lowest possible price for Canadians. International price referencing should only be one input into what an appropriate price should be. Fundamental reform often takes time to accomplish. Therefore, while this fundamental reform is being implemented, we believe that short-term action should be taken to help reduce prices 7 The PMPRB currently strives to set prices at the median of 7 OECD comparator countries, which include France, Germany, Italy, Sweden, Switzerland, U.K., and the U.S.