CPI-Adjustment Factors for 2007
The Patent Act (Act) specifies the factors to be used by the PMPRB in determining whether the price of a patented drug product sold in Canada is excessive. One of these factors is the Consumer Price Index (CPI). The Excessive Price Guidelines (Guidelines) limit price increases to changes in the CPI over a three-year period.
To allow patentees to set prices in advance, the Board's CPI-Adjustment Methodology provides for the calculation of the CPI-Adjustment factors based on forecast changes in the CPI. The Board informs patentees on an annual basis of the CPI-adjustment factors for future pricing period.
The CPI-adjustment factors for 2007 are as follows:
2007 CPI-Adjustment Factors for All Patented Drug Products
(CPI 1992=100)
Benchmark Year
| |
(1) 2004 |
(2) 2005 |
(3) 2006 |
| Base-CPI |
124.56 |
127.34 |
n/a |
| 2007 Forecast CPI |
132.75 |
132.75 |
132.75 |
| 2007 CPI-Adjustment Factor |
1.066 |
1.042 |
1.019 |
The Base CPI is the average of the monthly CPI figures, as published by Statistics Canada, for the benchmark year.
The 2007 Forecast CPI is 132.75 (1992=100) and is based on the actual CPI figures for 2005 (127.34), as published by Statistics Canada, and the latest available inflation projections (2.3% for 2006 and 1.9% for 2007) from the federal Department of Finance.
Calculations: Latest actual available
(Dec. 2005) = 127.34
Forecast for 2006 = 127.34 x 1.023 = 130.27
Forecast for 2007 = 130.27 x 1.019 = 132.75
Cap for 2007 = 1.5 x 1.9% = 2.9%