Case: Sanofi Pasteur Limited v. Attorney General of Canada

Drug: QUADRACEL and PENTACEL

Nature of case: Judicial Review of the PMPRB  decision dealing with the remedy granted with respect to the excessive prices of QUADRACEL and PENTACEL

Successful party: Sanofi Pasteur Limited

Date of decision: July 12, 2011

Summary

On July 12, 2011 Gauthier J. of the Federal Court (the “Court”) allowed the judicial review application of Sanofi Pasteur Limited (“Sanofi”) and quashed the March 16, 2010 Order of the Patented Medicine Prices Review Board (the “Board”).  The Court also ordered the Respondent to repay Sanofi the sum of $2,512,878.74 together with appropriate interest.

The Board’s Order

In a decision dated December 21, 2009 (later amended on March 1, 2010), the PMPRB held that Sanofi’s QUADRACEL and PENTACEL products were priced excessively. On March 16, 2010 the Board ordered Sanofi to make a payment in the amount of $2,512,878.74 representing its excess revenues.

The Decision of the Federal Court

Sanofi sought judicial review of the Board's decision. Sanofi argued that in finding the price of its products to be excessive, the Board erred: (i) by imposing a penalty pursuant to subsection 83(2) of the Patent Act and (ii) by fettering its own discretion and “blindly relying” upon the PMPRB’s Compendium of Guidelines, Policies and Procedures (“Guidelines”).  The Court rejected these arguments.

Sanofi argued that in light of the unique pricing and customer environment for vaccines, and in consideration of the fact that all of the excess revenues for the relevant time period had either been offset by lower prices or otherwise compensated, the imposition of a price reduction or a payment of excessive revenues was punitive and beyond the jurisdiction of the Board. Further, Sanofi argued that the Board’s Order was “based on pure speculation and conjecture” that ignored the evidence.

In a strongly worded decision, Justice Gauthier held that the Board’s Order contained “convoluted wording” that made it “extremely difficult, if not impossible, to understand”. The Court held that the “decision was not reasonable because of its lack of transparency, intelligibility and justification.”  The Board never meaningfully considered the circumstances of the case. The Court could not decipher on what basis the Board discarded Sanofi’s argument that it had, either totally or in part, compensated for its excessive revenues.

In obiter, the Court stated that the Board could not justify a finding that any offset of excess revenues outside of a Voluntary Compliance Undertaking or Board Order should be disregarded.

The Court set aside the decision and remitted the matter to the Board for reconsideration. The respondent was ordered to return Sanofi’s payment in the amount of $2,512,878.74 together with interest.

Link to decision:

The decision has not yet been posted. The citation will be 2011 FC 859