In early June, the Patented Medicines Prices Review Board
(PMPRB) released a decision finding that ratiopharm Inc., a generic
pharmaceutical company, had sold its ratio Salbutamol HFA product
at an excessive price from September 2002 to January 2010. ratio
Salbutamol HFA was an authorized generic version of Ventolin HFA, a
patented drug, which is marketed and sold in Canada by
GlaxoSmithKline Inc. While the PMPRB considered a number of issues,
two are of particular note: (i) whether ratiopharm was a
"patentee" under the pricing provisions of the Patent
Act; and (ii) whether rebates given by ratiopharm should be
used in determining the price at which ratio Salbutamol HFA was
sold in Canada. This decision provides further clarity on how the
PMPRB interprets "patentee" under the pricing provisions
of the Patent Act and establishes the level of evidence
required for rebates to be considered in the calculation of the
average sale price of a medicine.
On the patentee issue, both parties agreed that the patents
pertaining to ratio Salbutamol HFA were owned exclusively by Glaxo
and that, with the exception of a license to market and sell ratio
Salbutamol HFA, ratiopharm had no entitlement to any right or
interest in the patents. The PMPRB stated that for the purposes of
the pricing provisions of the Patent Act, a patentee
includes any person entitled to exercise any rights in relation to
a patent pertaining to a medicine. The license gave ratiopharm the
exclusive right to set the price of and sell ratio Salbutamol HFA
and to obtain the necessary regulatory approvals to do so. Absent
the license, these acts would have violated the rights held
exclusively by Glaxo. Although Glaxo held title to the patents,
ratiopharm was deemed the patentee of ratio Salbutamol HFA under
the pricing provisions of the Patent Act.
On the rebates issue, prior to the issuance of the Notice of
Hearing in the subject Proceeding, the pricing information
submitted by ratiopharm did not take into account the rebates
issued for ratio Salbutamol HFA. However, following the issuance of
the Notice of Hearing, ratiopharm revised its average price
calculation for ratio Salbutamol HFA by deducting rebates from
gross revenues leading to a significant reduction in the average
transaction price of the drug. While it is clear from the
Patented Medicines Regulations that rebates are to be
included in the calculation of the average price of a medicine, the
PMPRB stated that a patentee must file supporting documentation of
any rebate claimed in respect of a medicine to show that it is
"clearly, directly and verifiably" related to the
medicine involved. Further, the PMPRB held that it has the
discretion not to consider rebates that are, in its view, not
specifically supported by the evidence. Based on the evidence at
hand, ratiopharm did not satisfy this requirement. Accordingly, the
PMPRB did not take into account any of the rebates claimed by
ratiopharm in determining the price at which ratio Salbutamol HFA
was sold during the period in question.
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