I should specify that there are three legal instruments that make up the legal framework of the PMPRB: the Patent Act, the regulations and our guidelines. The act is obviously the responsibility of Parliament, the MPs. The regulations are the responsibility of the Minister of Health, subject to being ratified by the Treasury Board. The guidelines are our own responsibility.
So, it's not that we're recommending these regulations or sponsoring them. They originate from the Minister of Health, from Health Canada.
That being said, I can describe in very broad strokes the nature of the changes that are proposed. For people who are interested in the details, the actual proposed regulations were gazetted on December 2.
There are basically three types of changes. It's proposed that the basket of countries that we compare ourselves to for pricing purposes be changed so that it's no longer such a premium set of countries because we realized, as I mentioned, that this aspirational policy didn't bear fruit over time in terms of an R and D footprint in Canada. We're looking at a group of countries that are a bit more similar to Canada in terms of health systems and economy, and more reflective of OECD median prices.
The second thing that Health Canada is doing is introducing new factors that the PMPRB can consider in trying to make a determination as to whether a price is excessive. Currently, there are only four or five factors in the act that we can look at, and they don't provide us with much insight, especially in the current context with the types of drugs that are posing sustainability challenges to payers. These new factors are pharmacoeconomics, market size and GDP. They'll enable us to leverage the work of CADTH, for example, in trying to set a cost-effective threshold for a lot of these new drugs and take a look at overall affordability in terms of the expected market size of the drug relative to GDP or GDP per capita.
Then the third type of change is enabling us to have visibility into what prices are actually being charged in Canada. The whole pricing issue has gone underground in recent years. I'm sure you're familiar with this. Most public payers negotiate confidential rebates with patentees, so list prices really don't reflect what's truly being paid in the market. Unfortunately, the PMPRB is doubly handicapped in the sense that it doesn't know what prices are truly being paid in the countries that we're comparing ourselves to, and in addition, it doesn't even know the current prices being paid by public payers in Canada. This is because of a very unfortunate court decision dating back to 2009.
It's proposed that we actually can compel that type of information. The main rationale for enabling us to do this is so that companies will be able to comply with these new, much lower price ceilings that will result from our application of these new factors of pharmacoeconomics, market size and GDP. So, it's in the companies' interests to provide us with that information.
I should emphasize, however, that this information will not be made public. It will be kept confidential by the PMPRB. Unfortunately, if we were to reveal the true prices in Canada, it would have a domino effect, a cascading effect. Internationally, it would be a race to the bottom, and we would no longer be able to secure those kinds of deals.
I hope that answers your question.