Canada: Supreme Court Of Canada Confirms Patented Medicine Prices Review Board Interpretation Of The Term "Sold In Any Market In Canada" And Underlines The Consumer Protection Purposes Of The Board's Role

On January 20th the Supreme Court of Canada issued a decision which confirms the role of the Patented Medicine Prices Review Board (PMPRB) and the consumer protection purposes of ss. 80(1)(b), 83(1) and 85 of the Patent Act.

In Celgene Corp v. Canada (Attorney General) 2011 SCC 1, Justice Abella, writing for the full court, addressed the term "is being or has been sold in any market in Canada" and determined that ordinary commercial definitions of place of sale were not determinative of the jurisdiction of the PMPRB to decide if prices being charged for a patented medicine are excessive or not.

Celgene is a global biopharmacuetical manufacturer headquartered in New Jersey. In the United States, Celgene markets thalidomide under the brand name Thalomid. Celgene has not obtained a Notice of Compliance from Health Canada with respect to the drug. Rather, since 1995, all sales of the medicine in Canada have been made pursuant to the Special Access Programme of Health Canada (SAP). When a doctor in Canada orders Thalomid under the SAP, it is packed in Celgene's U.S. facility and shipped FOB to Canada. The invoice is prepared by Celgene in the U.S. and mailed to Canada. Payment is made in U.S. dollars to Celgene in the U.S. No Canadian taxes are paid on the transaction, the medicine is never redistributed in Canada and any unused product must be returned to Celgene in the U.S.

Celgene argued before the PMPRB that under general commercial law principles the medicine was "sold" in New Jersey, not in Canada, and that the PMPRB had no jurisdiction because its authority under s. 80(1)(b) of the Patent Act extends only to medicines "sold in any market in Canada". The PMPRB disagreed and concluded that it had authority over the sales of Thalomid through the SAP. The PMPRB concluded that, in order to comply with its mandate, sales "in any market in Canada" for the purposes of the relevant provisions, should be interpreted to include sales of medicines that are (a) regulated by the public laws of Canada, (b) will be delivered and dispensed in Canada, and (c) the cost of which will be borne by Canadians. All of these prerequisites were satisfied in the case of the sales of Thalomid to Canadians through the SAP.

Celgene sought judicial review before the Federal Court, which concluded that while the medicine is being sold to Canadians, it is being sold in the U. S., not in Canada. It found that the PMPRB did not have jurisdiction. However, the Federal Court of Appeal agreed with the PMPRB's determination of its mandate and jurisdiction and allowed the appeal. The Court of Appeal focused on the words "sold in any market in Canada". Because the language of the statute is capable of different interpretations, the one chosen should be the one that best implements the consumer protection objectives of the price-regulation provisions of the Patent Act. An interpretation which would exempt Thalomid sales through the SAP, would deprive Canadians of the price protections underlying the enactment of those provisions.

The Supreme Court agreed with the Court of Appeal. Because the provision is question is open to differing interpretations, it framed the question as being whether the one selected by the PMPRB was justified. It found that it was. The PMPRB was justified in rejecting the technical commercial law definition urged by Celgene for the reasons articulated by the Federal Court of Appeal and because that interpretive choice is supported by the legislative history and purpose of the PMPRB. ". . . the approach to its mandate that the PMPRB applied, one that took into paramount account its responsibility for ensuring that the monopoly that accompanies the granting of a patent is not abused to the financial detriment of Canadian patients and their insurers" was reasonable and justified. The Court also affirmed that since the PMPRB is a specialized tribunal interpreting its enabling legislation, only if the PMPRB's decision is unreasonable should it be set aside. To be unreasonable the Court reiterated its comments in Dunsmuir1 that the decision must fall outside "a range of possible, acceptable outcomes which are defensible in respect of the facts and law". Far from falling outside this range, the Court saw the PMPRB's decision as unassailable under either a reasonableness or correctness standard of review.

COMMENTS

The Court has affirmed the PMPRB's long standing view that patentees are required to notify the PMPRB of an intention to sell a patented medicine in a new market in Canada and the date on which the patentee intends to offer the medicine for sale, and that this requirements includes investigational new drugs and drug products to be sold under the SAP.

The Court appears to have settled, for the time being, the debate between the pharmaceutical industry and the PMPRB as to whether the PMPRB has a consumer protection mandate in addition to an obligation to ensure that the prices of patented medicines are not excessive. In so doing, the Court relied on statements of Ministers of the Government of Canada at the time of the introduction in the House of Commons of legislation related to the PMPRB.

As for pharmaceutical industry, the case is likely to attract careful study by manufacturers and their counsel. Several recent decisions of the Federal Court has sided with manufacturers suggesting that the PMPRB has interpreted its jurisdiction too broadly. This decision will rebalance, to some extent, the debate over the extent of the PMPRB's jurisdiction.

Footnote

1 Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at para 47.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions