Edited by Adrienne Blanchard and Jane B.H.
On January 20, 2011, the Supreme Court of Canada decided the
first case brought before it concerning the jurisdiction of the
Patented Medicine Prices Review Board ("PMPRB"),
Canada's federal pricing regulator for patented
medicines. The Court decided that the PMPRB
does have the jurisdiction to seek sales and pricing
data from a patentee, even if the "sales" that
occurred, from a commercial law perspective, were sales that
occurred in another country and did not occur in Canada.
By way of background, this matter initially arose when the PMPRB
sought reports of data in respect of the THALOMID product.
Celgene, the patentee, challenged the jurisdiction of the Board to
seek the data in respect of medicines, which were sold under
Canada's special access regime (SAP) for pharmaceuticals,
given that the locus of the sale was the U.S. and not
Canada, given that the Board held that it had jurisdiction to
require the reporting of prices for the product. However, the
Federal Court disagreed with the Board, and held that it did not
have jurisdiction to require disclosure of pricing data relating to
these sales as they were not sales in Canada. The
sales were for product shipped "Free on Board" New
Jersey, making the locus of sale the U.S. from a commercial
perspective (see our earlier report on the Federal Court
decision, released March 17, 2009, at:
The Federal Court's decision was appealed, and the Federal
Court of Appeal overturned the decision on December 23, 2009.
The Supreme Court agreed with the Federal Court of
Appeal that the Board has jurisdiction, finding that
"sold" may have a commercial law meaning in some
statutory contexts, "but that does not mean that the Board
misinterpreted the words "sold" and "selling"
in the context of ss. 80(1)(b), 83(1) and 85. In
rejecting the technical commercial law definition, the Board was
guided by the consumer protection goals of its mandate, concluding
that Celgene's approach would undercut these objectives by
preventing the Board from protecting Canadian purchasers of
Thalomid and other foreign-sold SAP patented
medicines. The Board's interpretive choice is
supported by the legislative history..."
Justice Abella wrote, "In my view, therefore, the
legislative context and the consumer protection purpose of ss.
80(1)(b), 83(1) and 85 of the Patent Act support
the Board's conclusion that, based on the language of those
provisions, it has authority over Celgene's sales of Thalomid
to Canadians through the SAP."
The Court also addressed the issue of standard of review, even
though neither party took issue with the finding of the Court of
Appeal that the standard of review of the Board's decision was
"correctness". The Supreme Court disagreed,
holding, "This specialized tribunal is interpreting its
enabling legislation. Deference will usually be accorded in
these circumstances: see Dunsmuir, at paras. 54 and 59;
Canada (Citizenship and Immigration) v. Khosa, 2009 SCC
12,  1 S.C.R. 339, at para. 44; and Nolan v. Kerry
(Canada) Inc., 2009 SCC 39,  2 S.C.R. 678. Only if
the Board's decision is unreasonable will it be set
aside. And to be unreasonable, as this Court said in
Dunsmuir, the decision must be said to fall outside
"a range of possible, acceptable outcomes which are defensible
in respect of the facts and law" (para. 47). Far from
falling outside this range, I see the Board's decision as
unassailable under either standard of review."
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