On April 30, 2013, Justice Zinn of the Federal Court set aside a decision of the PMPRB (the “Board”), which ordered (Order, Reasons) Teva to pay the government $2,801,285 for having sold COPAXONE Syringes (glatiramer acetate) at an “excessive price” between 2004 and 2010: Teva Canada Innovation v Canada (Attorney General), 2013 FC 448.

This is not the first time a decision of the Board regarding COPAXONE has been overturned by the Federal Court. As reported in the December 2009 edition of Rx IP Update, Justice Hughes set aside the Board's first decision on excessive pricing of COPAXONE and returned the matter to the Board for redetermination. Justice Zinn concluded that the redetermination by the Board suffered from the same problem as was found by Justice Hughes in the first decision. The decision was accordingly set aside and sent back for a second redetermination.

While the price of the COPAXONE Syringe increased by 20% between 2004 and 2010, the Board found that it was the lowest-priced medicine in its therapeutic class in Canada between 2002 and 2010, and that it was also consistently the lowest compared to the seven relevant comparator countries.

Teva argued, inter alia, that the decision of the Board was unreasonable in its interpretation of the term “medicine” as found in section 85(1)(a) of the Patent Act, namely by equating it with the DIN. As such, the COPAXONE Vial was not an appropriate comparator for the pricing of the COPAXONE Syringe. Justice Zinn held that this decision was entitled deference and there was nothing unreasonable with the Board’s interpretation, particularly in light of the fact that Teva had initially argued before the Board that the COPAXONE Vial should not be used as a comparator for the purposes of sections 85(1)(b) and (c).

Justice Zinn then reviewed the Board’s analysis of the factors under section 85(1) of the Patent Act and concluded that the Board “again paid no more than lip service to the factors favouring the conclusion that the medicine was not excessively priced, namely paragraphs 85(1)(b) and (c), and again treated paragraph 85(1)(d), CPI, as a conclusive factor.” Regarding section 85(1)(b), pertaining to the prices at which other medicines in the same therapeutic class have been sold in the relevant market, Justice Zinn concluded that the Board offered no explanation as to why it considered the removal of the COPAXONE Vial from the market as relevant.

Regarding section 85(1)(c), pertaining to the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada, Justice Zinn concluded that the Board was unreasonable in lessening the significance of the fact that the COPAXONE Syringe was priced lower in Canada than in other countries for the years 2004-2010 without pointing to any concrete examples of exogenous factors that lessen the impact of this factor in this particular case. Justice Zinn noted that, “[h]aving enacted this provision, Parliament is presumed to be aware of the difficulties in comparing the price of medicines across borders... What the Board appears to be saying is that this factor is inherently unreliable and should be given little if not no weight. The Board appears therefore to be subverting the will of Parliament, which clearly saw this as a relevant factor to be accorded weight.”

Justice Zinn finally held that the most fundamental legal error was the decisive weight the Board gave to section 85(1)(d), changes in the Consumer Price Index. Justice Zinn held that this was an unreasonable interpretation of section 85(1): “the meaning of the opening words in subsection 85(1) is straightforward and allows for only one reasonable interpretation: each of the factors listed in that provision are relevant to a singular determination, which is whether a medicine is or has been sold at a price that is ‘excessive.’” The Court noted that in giving decisive weight to the Consumer Price Index the Board erred in treating the Guidelines to be binding.

Justice Zinn therefore allowed Teva’s application, quashed the Board’s decision, and returned the matter for redetermination by a Board differently constituted than that which rendered either of the two decisions, if available, in accordance with his reasons.