FCA Overturns Decision, Finds Authorized Generics are Within the Jurisdiction of the PMPRB

On November 6, 2015, Canada’s Federal Court of Appeal (FCA) released its decision in Canada (Attorney General) v Sandoz Canada Inc, 2015 FCA 249, overturning the related decisions of the Federal Court of Canada (FC) in Sandoz Canada Inc v Canada (AG), 2014 FC 501 (Sandoz FC) and ratiopharm Inc v Canada (AG), 2014 FC 502 (ratiopharm FC).  The Sandoz FC and ratiopharm FC decisions allowed applications for judicial review of decisions of the Patented Medicines Prices and Review Board (PMPRB) that found, among other things, that the PMPRB’s interpretation of “patentee” in the Patent Act was unreasonable (prior reporting in E-TIPS® newsletter on the Sandoz FC and ratiopharm FC decisions can be found here).

The PMPRB is a federal administrative body established under the Patent Act with jurisdiction to regulate the drug pricing of “patentees”.  The PMPRB determined that it had jurisdiction to regulate pricing of the particular generic drugs at issue because, in this instance, Sandoz Canada Inc (Sandoz) and ratiopharm Inc (ratiopharm) fell within the scope of a “patentee” by being authorized generics (Sandoz as a subsidiary of patent owner Novartis Canada Inc; ratiopharm by agreement with patent owner Glaxosmithkline Inc).  The FC found this interpretation unreasonable, mainly on the grounds that Sandoz and ratiopharm were never within a position of monopoly in respect of their particular drug products.

The FCA found that the PMPRB’s reasons were a “defensible interpretation” of the PMPRB’s home statute and the caselaw to date, and that FC misapplied the reasonableness standard in its review:

 […] the Federal Court judge substituted its own view of the legislative purpose without considering whether the PMPRB’s characterization met the threshold of acceptability and defensibility that separates unreasonable decisions from reasonable ones.