Canada: Patented Medicines Prices Review Board Jurisdiction Is Limited By The Federal Court

On May 27, 2014, Justice O'Reilly of the Federal Court released two decisions relating to the jurisdiction of the Patented Medicines Prices Review Board (PMPRB) (Sandoz Canada Inc. v. Canada (AG), 2014 FC 501 and Ratiopharm Inc. v. Canada (AG), 2014 FC 502).

The PMPRB had held that the generic company Sandoz Canada Inc. was a "patentee" under the Patent Act by virtue of the fact that Sandoz is a wholly-owned subsidiary of Novartis AG, an innovator which authorizes Sandoz to sell generic versions of Novartis' drugs. With respect to ratiopharm inc. (now Teva Canada Limited), the PMPRB held that ratiopharm was a "patentee" since it was an authorized generic with respect GlaxoSmithKline Inc.'s anti-asthmatic product Ventolin HFA® (salbutamol HFA).

As a result of these findings, the PMPRB held that it had jurisdiction over both ratiopharm and Sandoz. With respect to Sandoz, the PMPRB held that it had reporting obligations for generic versions of certain drugs in respect of which Novartis owned patents. In the case of ratiopharm, the PMPRB found that it had reporting obligations with respect to ratiopharm's generic version of Ventolin HFA®. It further held that ratiopharm had been charging an excessive price for its product and thus had to pay over $65 million in damages.

Both Sandoz and ratiopharm applied to the Federal Court to judicially review the PMPRB's decisions. The parties' arguments in both cases were two-fold: (1) they were not subject to the PMPRB's jurisdiction as they were not "patentees" and (2) the PMPRB's pricing control powers were unconstitutional.

While the Court reviewed the PMPRB's decision with respect to whether Sandoz and ratiopharm were "patentees" using the deferential standard of reasonableness, it differed from the PMPRB and held that these companies were not subject to the PMPRB's jurisdiction. In doing so, the Court rejected the government's argument that these companies were "patentees" since they were entitled to the benefit of a patent and/or to exercise rights in relation to the patent. Instead, the Court held that since generic companies were not entitled to the principle benefit of a patent monopoly (the right to exclude others), they were not "patentees". However, the Court noted that a generic company could be "patentee" if it owned a patent relating to a drug.

Further, the Court noted that the federal government had no jurisdiction to regulate the prices of generic versions of patented medicines; this is a provincial responsibility. The PMPRB's jurisdiction thus had to be tied to patents and not to protecting consumers from high drug prices. Thus constitutionally, price control is not within the mandate of the PMPRB; its jurisdiction is limited to patents and abuse of the monopoly associated with patents. In this regard, the Court held:

That approach suggests that the definition of "patentee" should take into account the limitations on federal jurisdiction over the pricing of medicines and, therefore, should recognize that a patentee is the holder of the exclusive rights that inure to a patent holder. To expand the definition to include generic companies who neither hold patents nor enjoy monopolies would expose the legislation to an attack on constitutional grounds. In other words, if the legislation were interpreted as applying to, and giving the Board jurisdiction over, products sold by generic pharmaceutical companies, its constitutionality would be in doubt.

Generally speaking, generic companies either help create or join a competitive marketplace, which helps keep the costs of patented medicines down. Reviewing the prices charged by generic companies who hold no patents and no monopolies, on its face, appears to be beyond the Board's mandate.

The objectives the legislation sought to achieve do not include regulating the prices charged by companies who do not hold a monopoly. The constitutionality of the legislation depends on its close connection to patent protection and the potential undue exploitation of the concomitant monopolies. Generic companies, like Sandoz, do not generally hold monopolies and, in fact, do not normally operate in a market where any monopoly exists.

While these decisions could be read as limited in application only to generic companies, nothing in the legislation limits such application based on the type of company. Thus it is possible that this decision could be applied to other companies that no longer enjoy a monopoly in fact because the market has been genericized, even though a patent may still "pertain" to the company's product.

With respect to the constitutional issue, Sandoz and ratiopharm had argued that the PMPRB's pricing control functions were ultra vires since they encroached on the provincial constitutional power over property and civil rights. While the PMPRB's jurisdiction had been previously found to be constitutional in the Manitoba Court of Appeal's decision Manitoba Society of Seniors Inc v Canada (AG),1 this was prior to the PMPRB being awarded in 1993 the power to reduce the price of patented medicines and to require patentees to pay damages to the federal government.

The Court only briefly dealt with this issue. Without giving substantive reasons, it held that the awarding of the new powers did not enlarge the PMPRB's mandate or alter the basic purpose of the legislation, which had been previously held to be to: (a) increase patent protection for new medicines and (b) address the potential abuse of monopolies through excessive pricing by patent holders. Thus, the Court held that the pricing control powers did not exceed federal jurisdiction over patents.

Sandoz Canada Inc v Canada (AG), 2014 FC 501

Ratiopharm v Canada (AG), 2014 FC 502


1 (1992), 96 DLR (4th) 606.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.