In early June, the Patented Medicines Prices Review Board (PMPRB) released a decision finding that ratiopharm Inc., a generic pharmaceutical company, had sold its ratio Salbutamol HFA product at an excessive price from September 2002 to January 2010. ratio Salbutamol HFA was an authorized generic version of Ventolin HFA, a patented drug, which is marketed and sold in Canada by GlaxoSmithKline Inc. While the PMPRB considered a number of issues, two are of particular note: (i) whether ratiopharm was a "patentee" under the pricing provisions of the Patent Act; and (ii) whether rebates given by ratiopharm should be used in determining the price at which ratio Salbutamol HFA was sold in Canada. This decision provides further clarity on how the PMPRB interprets "patentee" under the pricing provisions of the Patent Act and establishes the level of evidence required for rebates to be considered in the calculation of the average sale price of a medicine.

On the patentee issue, both parties agreed that the patents pertaining to ratio Salbutamol HFA were owned exclusively by Glaxo and that, with the exception of a license to market and sell ratio Salbutamol HFA, ratiopharm had no entitlement to any right or interest in the patents. The PMPRB stated that for the purposes of the pricing provisions of the Patent Act, a patentee includes any person entitled to exercise any rights in relation to a patent pertaining to a medicine. The license gave ratiopharm the exclusive right to set the price of and sell ratio Salbutamol HFA and to obtain the necessary regulatory approvals to do so. Absent the license, these acts would have violated the rights held exclusively by Glaxo. Although Glaxo held title to the patents, ratiopharm was deemed the patentee of ratio Salbutamol HFA under the pricing provisions of the Patent Act.

On the rebates issue, prior to the issuance of the Notice of Hearing in the subject Proceeding, the pricing information submitted by ratiopharm did not take into account the rebates issued for ratio Salbutamol HFA. However, following the issuance of the Notice of Hearing, ratiopharm revised its average price calculation for ratio Salbutamol HFA by deducting rebates from gross revenues leading to a significant reduction in the average transaction price of the drug. While it is clear from the Patented Medicines Regulations that rebates are to be included in the calculation of the average price of a medicine, the PMPRB stated that a patentee must file supporting documentation of any rebate claimed in respect of a medicine to show that it is "clearly, directly and verifiably" related to the medicine involved. Further, the PMPRB held that it has the discretion not to consider rebates that are, in its view, not specifically supported by the evidence. Based on the evidence at hand, ratiopharm did not satisfy this requirement. Accordingly, the PMPRB did not take into account any of the rebates claimed by ratiopharm in determining the price at which ratio Salbutamol HFA was sold during the period in question.

Click here to access the link to the decision.