On November 12, 2009, Justice Hughes of the Federal Court
allowed two judicial review applications of Teva Neuroscience
G.P.-S.E.N.C. in respect of two decisions made by the Patented
Medicine Prices Review Board ("PMPRB"). In its decisions,
the PMPRB decided that Teva had priced its medicine Copaxone
excessively and that a payment of approximately 2.4 million should
be made as a result. Justice Hughes quashed both decisions on the
basis that the PMPRB acted unreasonably and outside its mandate
under the Patent Act by focusing on the application of one
factor to the exclusion of the others.
Justice Hughes in reaching his decision addressed a number of
issues and made a number of particularly notable comments. In
discussing the origin and nature of the PMPRB, Justice Hughes
reviewed the legislation and authorities which addressed the
non-binding nature of the PMPRB's Compendium of Guidelines,
Policies and Procedure ("Guidelines") and
added that they do not have the force of law and are "at
best" soft law. Justice Hughes emphasized that primary
attention must be paid to the Patent Act and
Regulations, which must prevail in cases of conflict with
the PMPRB's Guidelines.
In addressing the issue of the Consumer Price Index
("CPI") increases, which was considered the central issue
before the PMPRB, Justice Hughes questioned the reasoning applied
by the Board in making a finding of excess pricing based on the
factors set out in section 85(1) of the Patent Act.
Justice Hughes noted that the Guidelines appeared to
provide for conclusive presumptions of excessive pricing in two
situations; when price increases exceeded the Board's CPI
Adjustment methodology and when a medicine was priced higher in
Canada than in any of the seven comparator countries. However,
Justice Hughes held that no such presumptions are provided for in
the Patent Act, each factor in section 85 is to be given
reasonable consideration and no factor can be ignored, nor can one
factor be given dominance such that the others are essentially
irrelevant. Justice Hughes placed significant emphasis on how the
PMPRB failed to demonstrate clearly what consideration, if any, was
given to the other factors and how focus was placed exclusively on
the CPI issue. Indeed, attention was even drawn to the how the
PMPRB did not give any consideration to the fact that Copaxone had
been priced significantly lower than its competitive products.
Justice Hughes was also critical of the PMPRB's calculation
of excess revenues. The court held that the figure was
unintelligible as no basis was provided for arriving at it in the
Board's reasons. Comment was also made that counsel for each
party as well as the court remained puzzled as to how this figure
In the result, Justice Hughes ordered that the matters be
returned for redetermination by a differently constituted Board, if
available and that this Board reconsider the matters. The court
also cautioned that the reconstituted Board should not merely pay
"lip service" to these matters and return the same
The Board panel that heard the Copaxone matter was composed of
the Chair, Vice-Chair and one other Member. There are two sitting
members who did not participate and under Board practice, as well
as under its draft rules of procedure, a two member panel is
On an issue not engaged in the case before him, Justice Hughes
indicated the decision of Shire Biochem Inc. v. Canada
(Attorney General) 2007 FC 1316, appears to authorize the
PMPRB to require a patentee to file information before a patent had
issued, once a patent was laid open to the public. Should the
matter arise in the future this will require further consideration.
In the Shire decision the Court held that it is not until
the patent was granted that a patentee is considered a patentee,
retroactively, from the date the patent application is laid open.
While the Shire decision did not squarely address the
issue of when the PMPRB may require information, it is a reasonable
interpretation of Shire that the PMPRB can only require
information once a patent has issued. This would be consistent with
the earlier decision in Hoechst Marion Roussel Canada Inc.v. Canada (Attorney General) 2005 FC 1552, where the Court
held that prior to the issuance of a patent the Board is without
jurisdiction during the laid open application period.
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