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Supreme Court of Canada Takes a Pass on Patented Drug Price Dispute

April 1, 2022

By: Nyrie Israelian and Noel Courage

The Supreme Court of Canada dismissed the Canadian Patented Medicines Prices Review Board’s (PMPRB) request for leave to appeal a decision in a case involving the Alexion drug Soliris. In July 2021, the Federal Court of Appeal (FCA) held that the Canadian Patented Medicines Prices Review Board must stay within its mandate of preventing excessive pricing.  The Board does not have the power to pursue a more general mandate of ensuring reasonable pricing, price-regulation, or consumer protection at large. As well, the Board’s decision was considered unreasonable by making an unprecedented departure from its Compendium of Policies, Guidelines, and Procedures (“the Guidelines”) to require that the price of Alexion’s drug Soliris be lower than that of all seven comparator countries. The Board decision was quashed, and the case was sent back to the Board for redetermination. See our recent article for more information on the FCA’s decision.

This is the second significant setback for the PMPRB.  In addition to the FCA’s decision in the Soliris case, the Federal Court (FC) and the Quebec Court of Appeal (QCCA) have dealt blows to recent amendments to the Patented Medicines Regulations before they even came into force.  These regulations provided the PMPRB with a revised framework to further limit the price of patented medicines (see our article on how these recent decisions have left important drug pricing issues in limbo). Both courts held invalid draft amendments that required patentees to use a new price calculation that included discounts, rebates or other benefits provided to third parties (e.g. public and private insurers) when reporting medicine prices and revenue information to the Board. The QCCA went a step further than the FC, finding that the Regulation’s new pharmacoeconomic price regulatory factors were also invalid. The FC decision is currently under appeal and cross-appeal, and it is unclear still whether the federal government will seek leave to appeal to the Supreme Court of Canada in the Quebec case.

Implications

The Supreme Court of Canada’s decision to deny leave to appeal provides more certainty for innovator drug companies that the PMPRB will have to operate within the mandate as set out by the FCA.  Patented drug owners have more leverage in price negotiations now that the FCA clearly limited the PMPRB mandate to preventing excessive pricing, and not price control or consumer protection.

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Author(s):

Noel Courage Noel Courage
B.Sc. (Biochem.), LL.B.
Partner
416.957.1655  email Noel Courage
Nyrie Israelian Nyrie Israelian
Ph.D. (Immunology), BA&Sc. (Biomedical Science)
Articling Student
416.957.6300  email Nyrie Israelian