The Supreme Court of Canada has released today its judgment in
the case of Option Consommateurs v. Novopharm et al
dismissing, with costs, Option Consommateurs' application
for leave to appeal from the decision of the Québec
Court of Appeal (the "QCA") which had refused to
authorize a proposed $3.9 billion class action instituted on behalf
of all Quebecers against nine generic drug manufacturers.
Davies, with a team made up of Guy Du Pont, Nick Rodrigo and
David Stolow, successfully represented Pharmascience Inc. in these
proceedings at all levels of court.
The case dates back to February 2003 when a newspaper article
appeared in La Presse reporting that certain unnamed
generic pharmaceutical manufacturers would have given
"illegal" rebates and other benefits to pharmacists in
Québec and other provinces. Two days later, based on
this newspaper article, a proposed class action was launched. The
action sought $3.9 billion in damages against nine generic drug
manufacturers on the grounds that these manufacturers would have
allegedly failed to deduct the "value" of these rebates
and other "benefits" from the prices of medications that
all Quebecers would have paid under either
Québec's publicly administered drug insurance
plan or under private insurance plans.
By judgment of January 17, 2006, the Québec Superior
Court (the "QSC") refused to allow the proposed class
action to proceed. The QSC held that although the 2003 amendments
to Québec's class action authorization regime had
simplified the criteria for authorization to a minimum, a motion
seeking authorization of a class action had to at least contain
some factual foundation for the court to appreciate the seriousness
of the proposed action. The QSC held that in this case, this
information was simply lacking ("faisait cruellement
défaut") and that there was no basis for the
Court to find that there was any appearance of fault, damages, or a
causal link that would have triggered the liability of the
manufacturers. The QSC held that the proposed action, which had
been amended on numerous occasions, was a "moving target"
that lacked a factual foundation and that the Court was simply not
prepared to conclude that this was a serious case based on
"pure speculations" drawn from a newspaper article.
By its judgment of June 11, 2008, the QCA agreed with the
QSC's holding that there was no causal link between the
alleged fault (i.e. the alleged payment of rebates to pharmacists)
and the alleged prejudice suffered by Quebecers (i.e. the alleged
higher prices for medications). The QCA also found that the claims
that Quebecers paid higher contributions as a result of the alleged
actions of the generic drug manufacturers was hypothetical, purely
speculative and had not been established. The QCA held, in
obiter, that the two proposed designated representatives
of the class, who had only purchased medications from four of the
generic manufacturers in question, had failed to establish that
they were adequate representatives for the entire class. Finally,
the QCA reiterated that the QSC exercises discretion in determining
whether the criteria for authorization are met and that Option
Consommateurs failed to establish that the trial judge had
incorrectly exercised this discretion.
Today's judgment of the Supreme Court of Canada denying
leave to appeal to Option Consommateurs marks the end of this case.
As is generally the case when the Supreme Court denies or grants
leave to appeal, no reasons are given.
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