CPI-Adjustment Factors Based on Inflation Forecasts - 2006

The 2006 CPI-adjustment factors included in Table 1 were published in the April 2005 NEWSletter. These factors are based on forecasts of annual CPI-inflation rates for 2005 and 2006. The Base-CPI is the average of the monthly CPI figures, as published by Statistics Canada, for the benchmark year.

Table 1 2006 CPI-Adjustment Factors for All Patented Drug Products (CPI 1992=100)

The 2006 Forecast CPI was 129.47 (1992=100) and was based on the actual CPI figures for 2004 (124.56), as published by Statistics Canada, and the latest available inflation projections (1.9% for 2005 and 2.0% for 2006) from the federal Department of Finance.

Cap for 2006 = 3.0% (1.5 x 2.0)

CPI-Adjustment Factors Based on Actuals

As of January 2007, Statistics Canada reports annual average CPI values of 127.34 and 129.90 for 2005 and 2006, respectively. Table 2 gives revised CPI-adjustment factors incorporating these actuals.

Table 2 2006 CPI-Adjustment Factors for All Patented Drug Products (CPI 1992=100)

The actual 2006-over-2005 CPI-inflation rate was 2.0% and equal to the forecast. This implies a 2006-over-2005 price increase cap of 3.0% (= 1.5 x 2.0%).