Federal Court Of Appeal Dismisses Appeal Challenging Amended Basket Of Comparator Countries In PMPRB Regulations

• Published date: 15 December 2022
• Subject Matter: Intellectual Property, Food, Drugs, Healthcare, Life Sciences, Patent, Food and Drugs Law, Biotechnology & Nanotechnology
• Law Firm: Smart & Biggar
• Author: Ms Nancy Pei, Daphne Lainson and Urszula Wojtyra

On December 5, 2022, the Federal Court of Appeal (FCA) dismissed Innovative Medicines Canada (IMC) and sixteen innovative pharmaceutical companies' appeal regarding the validity of the amended basket of comparator countries in the Patented Medicines Regulations: Innovative Medicines Canada v Canada (Attorney General), 2022 FCA 210 (Appeal Decision).

Background

The Patented Medicines Regulations set out reporting requirements for patentees to the Patented Medicine Prices Review Board (PMPRB). Proposed amendments were first published on August 21, 2019 which, broadly, would have introduced:

1. New price regulatory factors based on pharmacoeconomic value market size and GDP/GDP per capita in Canada, and related reporting obligations (pharmacoeconomic factors);
2. Expanded reporting of price and revenue information to include confidential third-party rebates (rebate reporting);
3. An amended basket of foreign reference countries for reporting purposes (amended basket); and
4. Reduced reporting obligations for patented veterinary over-the-counter (apart from non-prescription schedule D drugs such as vaccines and insulin) and generic medicines.

Court challenges to the validity of amendments (1)-(3) quickly followed.

The Federal Court held amendments to rebate reporting (2) were invalid, but amendments for pharmacoeconomic factors (1) and the amended basket (3) were valid. The Appeal Decision is discussed below.

The Quebec Court of Appeal held amendments for both pharmacoeconomic factors (1) and rebate reporting (2) were invalid, but the amended basket (3) was valid.

Ultimately, the Governor in Council proceeded with amendments (3) and (4) only, and the amendments came into force on July 1, 2022. Draft amended Guidelines are currently under consideration.

Amendment at issue

For context, s. 85(1) of the Patent Act sets out five factors for the Board to consider in assessing whether pricing is excessive, and includes:

"(c) the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada".

Subsection 101(1)(a) of the Patent Act gives the Governor in Council the power to make regulations:

"(a) specifying the information and documents that shall be provided to the Board ..."

The Patented Medicines Regulations require patentees to report relevant pricing information regarding the medicine sold in a basket of countries other than Canada. Before the amendment, the basket of seven countries was: France, Germany...