Absence of a Canadian patent leaves the PMPRB powerless to control the price of Cystadrops

By Osman Ismaili, February 4th, 2020

While the Patented Medicines Prices Review Board (“the PMPRB”) polices the prices of patented medicines in Canada, a recent article in The Globe and Mail suggested that a loophole may exist for drug manufacturers that have chosen not to acquire Canadian patent protection.

Cystadrops, a cysteamine hydrochloride-based eye drops formulation is produced by Recordati Rare Diseases Inc. (“Recordati”), and is used to treat a rare disease known as cystinosis. Cystinosis is characterized by the abnormal accumulation of the amino acid cystine in various organs of the body, including crystal build up in the eyes. While about one hundred Canadians suffer from cystinosis, the cost for a year’s supply of Cystadrops is approximately $111,000 per individual.

This price is largely due to the fact that Cystadrops does not fall within the jurisdiction of the Canadian federal regulatory body for medicines pricing. As Recordati chose not to obtain a Canadian patent for its formulation, any price regulation for Cystadrops by the PMPRB would be ultra vires. Compounding pharmacies in Canada largely stopped making cheaper versions of the drug when Recordati’s version was given the green light by Health Canada.

Another interesting aspect to note is that typically data privacy regimes provide innovative drugs with a data protection period of eight or eight and a half years, during the first 6 of which a (typically generic) manufacturer seeking a Notice of Compliance (“NOC”) will be prevented from filing its drug submission.

A search of the Register of Innovative Drugs has revealed that while there is no active data protection over Cystadrops, a related formulation of cysteamine bitartrate is protected and is associated with another company. Whether any patent or NOC links exist between the two formulations, or another third party for that matter, remains unclear. Furthermore, perhaps the very small market of just one hundred people acts a natural barrier to entry for generics or compounding pharmacies to invest in preparing the formulation.

With drug pricing regulations already being a contentious issue in Canada, it will certainly be of interest to see how this particular situation will develop, or if more information will be brought to light. In any case, as a result of the price of Cystadrops, Ontario became the first province to fund the drug, with other provinces expected to follow suit.