Celgene v. Canada; judicial review of a PMPRB decision; 2009 FC 271; thalidomide; March 17, 2009

Celgene is the current owner of several patents relating to thalidomide. It does not have full market authorization from Health Canada to market or sell the product in Canada. However, Celgene's Thalomid thalidomide product is approved for market in Canada by way of the Special Access Program (SAP).

Under the SAP, a Canadian doctor makes a request to Health Canada for authorization to treat a patient with Thalomid. When that authorization is granted, Celgene in the United States packages the product and ships it free-on-board directly to the medical practitioner in Canada. An invoice is sent instructing that payment is to be made in U.S. dollars and couriered to Celgene in the U.S. No Canadian taxes are paid on the transactions and all shipments from the U.S. have U.S. packaging and labelling. The drug is never redistributed in Canada and all unused portions are to be returned to Celgene.

The PMPRB asserted jurisdiction over these sales. The Board found that the locus of the sale was a commercial choice and not determinative of its jurisdiction. The Board reasoned that it was not Parliament's intention to leave medicine purchasers who are in Canada without the price protection of the Board.

Upon review, the Court held that the Board does not have the jurisdiction to regulate these sales. The Patent Act serves a public policy function but functions within a commercial reality. A market in the commercial sense cannot exist without a buyer and a seller. Thus, for the market to exist in Canada, the purchase and sale must both be in Canada. Furthermore, there was no evidence that an object of the Patent Act is to provide jurisdiction over sales of medicines outside of Canada.

Thus, the Court held that the Board's opinion was without basis in law. A textual, contextual, and purposive analysis of section 80(1)(b) of the Patent Act does not support the Board's opinion of its own jurisdiction. Thalomid is sold to Canadians but the medicine is not sold in any market in Canada. Thus, these sales are not within the jurisdiction of the Board.

The full text of the decision can be found at:

http://decisions.fct-cf.gc.ca/en/2009/2009fc271/2009fc271.html