By a decision of Justice Zinn dated April 30, 2013, the Federal Court quashed a Board’s decision on excessive pricing of Copaxone – for the second time. In 2009, Justice Hughes heard a judicial review application by Teva in respect of a first Board decision which had found excessive pricing. As with the current decision, the Court in that instance found that the Board’s decision was unreasonable in not effectively considering each of the factors set out in section 85(1) of the Patent Act.
In the instant decision, the Court found the Board only paid “lip service” in considering factors of relative price of the medicine when compared to domestic ((1)(b)) and international ((1)(c)) therapeutic comparators. The Board found the Consumer Price Index (CPI) factor ((1)(d)) as being determinative, despite having found that Copaxone was the lowest priced medicine amongst both its domestic and international comparators,
“[I]n the period following 2004, the impact of the prices increases that were imposed upon the consumer exceeded the protection that Parliament has provided."
In particular, the Board found excessive pricing despite Copaxone being the lowest medicine in its therapeutic class. This finding was based solely on increases above CPI in the years 2004 and 2005 (equalling approximately 2.8 million dollars). While this is one of the factors to be considered, an increase above CPI in and of itself is not determinative of excessive pricing. The Court’s decision criticizing the Board is virtually identical to Justice Hughes’ 2009 decision. Justice Zinn in discussing the application of the CPI factor acknowledges and accepts the Court’s earlier decision:
“In short, the Board has fallen into exactly the error suggested by Justice Hughes – it has considered the Guidelines, and specifically, those portions dealing with CPI to be binding. The Guidelines are not binding….
“For these reasons this decision is unreasonable and must be set aside on terms identical to those issued by Justice Hughes previously.”
Consequently, the Board’s decision was quashed and sent back to be redetermined by a different panel of the Board.
With its decision, the Court expresses frustration with the PMPRB, but declined to “provide the Board with further directions in the nature of a directed verdict, specifically that the Board redetermine the matter on the basis that the allegations against [Teva] be dismissed”, which relief Teva had requested.