Statutory Interpretation – Patented Medicine Prices
Review Board – Consideration of Mandate –
Standard of Review
In this case, the Supreme Court of Canada upheld a regulatory
board's decision to interpret its statutory mandate with
reliance on a consumer protection purpose.
The issue before the Patented Medicine Prices Review Board
("Board") was the extent of the Board's jurisdiction
over medicine "sold in any market in Canada". The Board
is constituted under the Patent Act. This Act permits the Board to
investigate the price of a medicine, or to require the patentee of
that medicine to provide the Board with information on that
medicine's price, where the medicine "is being or has been
sold in any market in Canada".
New Jersey-based Celgene made Thalomid. Since 1995, Celgene sold
Thalomid directly to medical practitioners in Canada pursuant to
the Special Access Programme. Under ordinary rules of commercial
law, these sales took place in New Jersey – Celgene
prepared the invoices in New Jersey and sent them to the
practitioner with the medicine, and practitioners paid Celgene by
mailing payment to New Jersey, in U.S. dollars and without Canadian
When Celgene obtained a Canadian patent for Thalomid in 2006,
the Board requested pricing information since 1995. Celgene began
to supply that information but then refused, arguing that Thalomid
had been "sold" in New Jersey during the relevant period
and so fell outside the Board's jurisdiction. In making this
argument, Celgene chose an interpretation of "sold in any
market in Canada" that relied on commercial law principles.
The Board disagreed with this approach. It held that its mandate
was consumer protection and was unrelated to commercial concerns.
This would mean that the interpretation of "in any market in
Canada" includes sales of medicine delivered and used in
Canada, medicine regulated by Canadian law, and medicine for which
Canadians will bear the cost.
Justice Abella agreed on behalf of a unanimous Supreme Court of
Canada. She held that although "sold in any market in
Canada" may have a commercial law purpose in some contexts,
the Board was correct in interpreting the phrase through the
Board's consumer protection mandate. The legislative history
underlying the Board's establishment supported this
interpretive choice. The result is that the Board has jurisdiction
to monitor and regulate prices of medicine that, while on a
technical commercial interpretation is "sold" in a
foreign market, is brought into Canada for use by Canadians, is
regulated by the public laws of Canada (i.e., through the Special
Access Programme), and for which Canadian patients or taxpayers
bear the cost.
Both parties proceeded on the basis that the applicable standard
of judicial review was correctness, although neither presented
argument on this point. Justice Abella, like Evans J.A. in the
Federal Court of Appeal below, questioned whether this was the
applicable standard. The Board is a specialized tribunal
interpreting its home legislation, and should be accorded
deference, such that the operative standard is reasonableness.
While Abella J. commented that parties should not be able, by
agreement, to contract out of the appropriate standard of review,
the Board's decision ultimately could be upheld under either
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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