On October 23, 2014, the Minister of National Revenue (the
Minister) filed Notices of Application in the
Federal Court against a number of generic drug manufacturers,
including Actavis Pharma Company, Apotex Inc., Mylan
Pharmaceuticals ULC, Pharmaceutical Partners of Canada Inc.,
Pharmascience Inc., Ranbaxy Pharmaceuticals Canada Inc., Sandoz
Canada Inc., Taro Pharmaceuticals, and Teva Canada
Respondents), to authorize the Minister to
require the Respondents to provide information on rebates and other
incentives paid to pharmacies and pharmacists.
The Notices of Application state that in the course of an audit
of an unidentified pharmaceutical company in Canada, the Canada
Revenue Agency discovered that pharmaceutical companies were paying
rebates, incentive payments, professional allowances, promotional
allowances, fees for service or other payments (referred to
collectively in the Notices of Application as Incentive
Payments) to pharmacies and pharmacists who were not
reporting such Incentive Payments for tax purposes.
Under the Income Tax Act (Canada) (the
ITA) the Minister (through the Canada Revenue
Agency (CRA)) can require any person to provide
documents or information for any purpose related to the
administration or enforcement of the ITA. However, when the
information sought relates to unnamed persons such
requirement cannot be imposed without judicial authorization.
As the CRA intends to require the Respondents to identify the
pharmacies and pharmacists who received Incentive Payments and the
nature of the payments received the Applications are brought
pursuant to section 231.2(3) of the ITA to obtain judicial
authorization to require the Respondents to provide the requested
information. CRA has limited the authorization to Incentive
Payments made from January 1, 2010 to December 31, 2012 to
pharmacies and pharmacists located in Canada.
The Respondents may oppose the Applications. If the
Applications are granted, the CRA will issue the Respondents a
formal "Requirement to Provide Information". The
Respondents will then be required to provide the information within
the time stipulated in the Requirement.
1 Actavis Pharma Company (T-2183-14),
Apotex Inc. (T-2182-14), Mylan Pharmaceuticals ULC (T-2181-14),
Pharmaceutical Partners of Canada Inc. (T-2179-14), Pharmascience
Inc. (T-2178-14), Ranbaxy Pharmaceuticals Canada Inc. (T-2177-14),
Sandoz Canada Inc. (T-2176-14), Taro Pharmaceuticals Inc.
(T-2174-14), and Teva Canada Limited (T-2173-14).
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