Federal Court Remits PMPRB Matter Back for Reconsideration
The Federal Court, in a July 12, 2011 decision, in the case of
Sanofi Pasteur Limited v. Attorney General of Canada 2011
FC 859 (T-83-10) ("Sanofi"), declared a
decision of the Patented Medicines Price Review Board
("Board") to be null and void, and required the Board to
return amounts paid by Sanofi pursuant to the Board's order,
and directing the matter back for reconsideration.
Sanofi had challenged, by way of judicial review, the
Board's decision on the remedy it directed in respect of a
finding of excessive pricing for the period 2002 to 2006 in respect
of the medicines PENTACEL and QUADRACEL. The Board had
ordered Sanofi to offset its revenues earned. The decision of
the Board (amended March 1, 2010) can be found at: http://www.pmprb-cepmb.gc.ca/cmfiles/Quadracel-Pentacel-Merits-Reasons-D5-Amended-March-1-2010.pdf).
Notably, there was a difference in the "remedy" ordered
by the Board in the original and amended reasons. In the December
2009 reasons (in original paragraph 84, specifically noted in the
Court's review) the Board recognized that the most appropriate
remedy "given the stability of the customer base for Quadracel
and Pentacel" was for Sanofi to reduce the price to a level to
offset excessive revenues earned. However, the Board amended
the reasons in March 2010, and the reference in the
"remedy" to the stability of Sanofi's customer base
was removed. In its case before the Court, Sanofi claimed
that its lower prices in the years following 2006 should be taken
into account as offset for the excess revenues found to have been
The Court considered a number of issues, including whether the
Board had erred by imposing a "penalty" on Sanofi, or had
fettered its discretion in an absolute reliance on its
Guidelines. The Court answered these questions in the
negative. Sanofi also claimed that the Board ignored
the evidence and the particular circumstances of the case and had
made findings that were based on pure speculation. The Court
agreed with Sanofi and held that the Board's decision did not
meet the level of transparency, intelligibility and justification
required by the "reasonableness" standard.
Specifically, the Court had difficulties with the Board's
position on the issue of offsetting the revenues earned, and noted
in particular the following questions at paragraphs 68 and 69, in
referencing the Board's original reasons:
What did the Board mean when it said that "the later
reduction in prices cannot be presumed, or even expected, to remedy
the potential harm done [...] this is true whether or not the
customer base remained the same throughout the two periods
[...]"? Could this really be intended to deal with this
particular case when one considers that in its original paragraph
84, the Board decided that it was appropriate to remedy the harm
done in this case through a price reduction because the customer
base remained essentially the same?
When it notes, in the last two sentences of para 55,
"because the effect of excessive prices on the purchasing
decisions made by the customer base will likely be a matter for
speculation only", was the Board making a finding based on the
evidence it heard or was it making a general statement? If the
former, was this conclusion reached because of the lack of
credibility of a particular witness or was it because the probative
value of the evidence produced was simply insufficient?
The decision was unclear as to whether the Board thought that
any remedial action by a patentee, outside of a Voluntary
Compliance Undertaking and without a prior Board Order, should be
disregarded. The Court could not decipher on what basis the
Board discarded the patentee's argument that it had already
compensated for its excessive revenues.
As such, the Court found that it was not in a position to
exercise its duty to review the Board's decision and to
determine whether it was in the range of possible and acceptable
outcomes. The Board's decision, therefore, did not meet
the reasonableness standard and was set aside, and remitted back to
the Board for reconsideration.
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