The Supreme Court of Canada issued a decision on January 20, 2011 regarding the scope of the Patented Medicine Prices Review Board (“PMPRB”) price-regulating and remedial authority. The Court held that the PMPRB does have the jurisdiction to review pricing information for sales to Canadians of unapproved drugs through the Special Access Program (“SAP”).

Brief Summary of the Case

In Celgene Corp. v. Canada (Attorney General), 2011 SCC 1 the Supreme Court considered the scope of the PMPRB’s authority over sales to Canadians.

The PMPRB is authorized under the Patent Act to require patent holders to report on the price at which their drug “is being or has been sold in any market in Canada” and can require patent holders to take remedial steps if the price is found to be excessive.

The case involves Celgene’s sale of the drug Thalomid, which does not have a Notice of Compliance, to Canadians through the SAP. Celgene obtained the Canadian patent for the drug in 2006 and was subsequently asked by the PMPRB to provide pricing information for sales to Canadians back to 1995 when those sales commenced.

Celgene argued that its SAP sales were not sales in Canada for the purposes of the PMPRB jurisdiction because:

  • The medicine was sold through Celgene’s head office in New Jersey;
  • The medicine was packed in the US and shipped “free on board” to the doctor in Canada;
  • The invoice for the medicine was prepared in the US and shipped to Canada;
  • Payment for the medicine was made in US dollars and couriered or mailed to Celgene in the US; and
  • No Canadian taxes were paid on the transactions.

The Supreme Court, however, accepted the Attorney General’s argument that that these kinds of SAP sales are within the PMPRB’s authority.

The Supreme Court acknowledged that these may not be considered sales from a strict commercial law interpretation of that term, but that the phrase “sold in any market in Canada” lends itself to multiple interpretations. In this regard, the Supreme Court noted the consumer protection mandate with which the PMPRB is charged under the Patent Act and its Regulations. In light of this mandate and the legislative context, the Supreme Court upheld the PMPRB’s authority over Celgene’s sales of Thalomid to Canadians through the SAP.

Significance

This decision puts to rest the issue of how broadly the PMPRB’s authority reaches in SAP cases, but also provides recognition from the country’s highest court of the role of the PMPRB’s consumer protection mandate in the interpretation of the Patent Act and its Regulations.

To the extent future appeals of PMPRB decisions might be contemplated, parties should also take note that the Supreme Court held that (at least for matters involving the interpretation of its enabling legislation) decisions of the PMPRB will be set aside only if they are found to be unreasonable.

A copy of the Supreme Court’s decision can be found at: http://scc.lexum.umontreal.ca/en/2011/2011scc1/2011scc1.html