On 18 February 2022, the Quebec Court of Appeal released its decision in Merck Canada Inc v Procureur général du Canada.(1) This is the appeal of the Quebec Superior Court decision declaring price and revenue calculation provisions of the amended Patented Medicines Regulations (the Regulations) unconstitutional.

The Quebec Court of Appeal varied the judgment of the Quebec Superior Court, and declared ultra vires, invalid and of no effect:

  • new paragraphs 4(4)(a) and (b) of the amended Regulations, which would have required price and revenue reporting to take into account confidential rebates provided to provincial payers; and
  • new sections 4.1, 4.2, 4.3 and 4.4 introducing three new price regulatory factors (pharmacoeconomic value, market size, and gross domestic product (GDP) in Canada and GDP per capita in Canada), and the related reporting requirements.

The Quebec Superior Court had found only new paragraphs 4(4)(a) and (b) unconstitutional.

The Quebec Court of Appeal affirmed the lower-court judgment declaring valid the remainder of the amended Regulations, including the amended "basket" of reference countries used to establish the price ceiling for a patented medicine (the Patented Medicine Prices Review Board (PMPRB) 11), and the provisions in the Patent Act relating to PMPRB jurisdiction.

Leave to appeal to the Supreme Court of Canada may be sought.

The amended Regulations will also come under judicial scrutiny in the appeal of the Federal Court decision striking down the price and revenue reporting provisions of the Regulations, which is scheduled to be heard on 28 February 2022.

For further information on this topic please contact Daphne Lainson or Nancy Pei at Smart & Biggar by telephone (+1 416 593 5514) or email ([email protected] or [email protected]). The Smart & Biggar website can be accessed at www.smartbiggar.ca.


(1) 2022 QCCA 240.