Ottawa has doubled down on the fantasy that government can legislate lower drug prices without causing unintended consequences. The federal government is expanding the regulatory powers of the Patented Medicine Prices Review Board (PMPRB). The final public consultation on the guidelines for implementing the amended regulations closes Feb. 14. Barring a last-minute policy reversal, the new price-control regime will go into effect July 1.
The government says the changes are required because prices for patented drugs are too high. The PMPRB evidently believes that with new regulatory tools it can ascertain what the correct prices should be. The guidelines are more extreme than drug pricing policies in other countries. It is not too much of a stretch to say that the new regime reflects Soviet-style thinking on price controls.
Until now the review board’s mandate has been to ensure that the prices of patented medicines are not “excessive,” although the regulations do not specify what constitutes “excessive.” The board itself has discretion to set rules for determining when prices are too high.