On April 30, 2013, Justice Zinn of the Federal Court set aside a
decision of the PMPRB (the “Board”), which ordered (Order, Reasons) Teva to pay the government $2,801,285
for having sold COPAXONE Syringes (glatiramer
acetate) at an “excessive price” between 2004
and 2010: Teva Canada Innovation v Canada (Attorney
General), 2013 FC 448.
This is not the first time a decision of the Board regarding
COPAXONE has been overturned by the Federal Court. As reported in
the December 2009 edition of Rx IP Update,
Justice Hughes set aside the Board's first decision on
excessive pricing of COPAXONE and returned the matter to the Board
for redetermination. Justice Zinn concluded that the
redetermination by the Board suffered from the same problem as was
found by Justice Hughes in the first decision. The decision was
accordingly set aside and sent back for a second
While the price of the COPAXONE Syringe increased by 20% between
2004 and 2010, the Board found that it was the lowest-priced
medicine in its therapeutic class in Canada between 2002 and 2010,
and that it was also consistently the lowest compared to the seven
relevant comparator countries.
Teva argued, inter alia, that the decision of the Board
was unreasonable in its interpretation of the term
“medicine” as found in section 85(1)(a) of the
Patent Act, namely by equating it with the DIN. As such,
the COPAXONE Vial was not an appropriate comparator for the pricing
of the COPAXONE Syringe. Justice Zinn held that this decision was
entitled deference and there was nothing unreasonable with the
Board’s interpretation, particularly in light of the fact
that Teva had initially argued before the Board that the COPAXONE
Vial should not be used as a comparator for the purposes of
sections 85(1)(b) and (c).
Justice Zinn then reviewed the Board’s analysis of the
factors under section 85(1) of the Patent Act and
concluded that the Board “again paid no more than lip service
to the factors favouring the conclusion that the medicine was not
excessively priced, namely paragraphs 85(1)(b) and (c), and again
treated paragraph 85(1)(d), CPI, as a conclusive factor.”
Regarding section 85(1)(b), pertaining to the prices at which other
medicines in the same therapeutic class have been sold in the
relevant market, Justice Zinn concluded that the Board offered no
explanation as to why it considered the removal of the COPAXONE
Vial from the market as relevant.
Regarding section 85(1)(c), pertaining to the prices at which
the medicine and other medicines in the same therapeutic class have
been sold in countries other than Canada, Justice Zinn concluded
that the Board was unreasonable in lessening the significance of
the fact that the COPAXONE Syringe was priced lower in Canada than
in other countries for the years 2004-2010 without pointing to any
concrete examples of exogenous factors that lessen the impact of
this factor in this particular case. Justice Zinn noted that,
“[h]aving enacted this provision, Parliament is presumed to
be aware of the difficulties in comparing the price of medicines
across borders... What the Board appears to be saying is that this
factor is inherently unreliable and should be given little if not
no weight. The Board appears therefore to be subverting the will of
Parliament, which clearly saw this as a relevant factor to be
Justice Zinn finally held that the most fundamental legal error
was the decisive weight the Board gave to section 85(1)(d), changes
in the Consumer Price Index. Justice Zinn held that this was an
unreasonable interpretation of section 85(1): “the meaning of
the opening words in subsection 85(1) is straightforward and allows
for only one reasonable interpretation: each of the factors listed
in that provision are relevant to a singular determination, which
is whether a medicine is or has been sold at a price that is
‘excessive.’” The Court noted that in giving
decisive weight to the Consumer Price Index the Board erred in
treating the Guidelines to be binding.
Justice Zinn therefore allowed Teva’s application, quashed
the Board’s decision, and returned the matter for
redetermination by a Board differently constituted than that which
rendered either of the two decisions, if available, in accordance
with his reasons.
The preceding is intended as a timely update on Canadian
intellectual property and technology law. The content is
informational only and does not constitute legal or professional
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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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