The Supreme Court of Canada has granted Celgene Corporation’s application for leave to appeal the decision of a majority of the Federal Court of Appeal regarding the jurisdiction of the Patented Medicine Prices Review Board.

In a decision dated December 23, 2009, the Court of Appeal overturned the decision of the Trial Judge and restored the decision of the PMPRB providing jurisdiction to the PMPRB over medicines imported under a Special Access Programme authorisation issued by Health Canada. The Court of Appeal held that the only question before the Board was whether the medicine was being “sold in any market in Canada” within the meaning of paragraph 80(1)(b) of the Patent Act. If it was, the Board could require the patentee to provide pricing information about the medicine and make a remedial order regarding the pricing.

The Court of Appeal concluded that the phrase should not be interpreted with reference to common law commercial principles for determining the location of a sale (such principles would find that the sale of Thalomid occurred in New Jersey), as the price regulation provisions of the Patent Act are for the protection of consumers. The Court of Appeal looked at the purpose of the legislation and held that it is part of a regulatory scheme administered by a specialized tribunal to prevent the abuse of the market power created by a patent through the charging of excessive prices for medicines used to treat patients in Canada. Thus, the Court of Appeal agreed with the PMPRB’s interpretation of the phrase “sold in any market in Canada” as enabling the Board to oversee the prices of medicines in Canada either generally or in specific markets, including purchasers receiving medicines through the Special Access Programme. The Court of Appeal held that the location of the market is determinative (i.e. Canada) rather than the location of the sale itself (i.e. New Jersey).

In his dissent, Justice Ryer found that the majority had improperly emphasised the location of the market rather than the location of the sale of the medicine, effectively rewriting “sold in any market in Canada” as “sold into any market in Canada”. He went on to hold that as Thalomid was sold by Celgene Corporation in New Jersey directly to physicians in Canada, its sale would not come under the pricing controls of the Board.

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