Innovative Medicines Canada et al v. AGC, 2020 FC 725

Justice Manson - 2020-06-29

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The Applicants essentially challenge the federal government’s use of the Patented Medicine Prices Review Board as a mechanism to reduce patented medicines prices in Canada. The Applicants take issue with three aspects of the Amendments. First, the Amendments specify additional factors that the Board must consider when determining whether the price of a patented medicine is excessive. Second, the Amendments change the “basket” of comparator countries for the purpose of reference pricing. Third, the Amendments require patentees to take into account discounts and rebates provided to third parties when reporting medicine prices to the Board. The Amendments were scheduled to come into force on July 1, 2020. At the outset of the hearing, the Respondent informed the Court that by Order in Council PC 2020-413, dated May 30, 2020, the coming into force of the Amendments has been deferred until January 1, 2021. ... The Regulations currently require patentees to report price adjustments at the first point of sale only (referred to generally as “ex-factory” or “factory-gate sales”). As stated in the RIAS, the New Price Calculation is intended to capture formulary listing payments that drug manufacturers often pay to insurers, including public drug plans, to have their products listed on the insurer’s formulary (RIAS at 5961). ... While the New Price Calculation is ostensibly intended to protect consumers from excessive pricing of patented medicines, the Governor in Council cannot exceed the scope of her regulation-making authority within the scheme of the Patent Act in attempting to advance this objective. The New Price Calculation does just that, and is therefore ultra vires the Patent Act. An interpretation that may accord with an objective of the Patented Medicines Regime, but is inconsistent with the Board’s mandate within the scheme of the Patent Act and flies in the face of the ordinary meaning of the “price” at which a medicine is “sold” is not reasonable. ... The Applicants are entitled to a declaration that subsection 3(4) of the Amendments is invalid, void, and of no force and effect, as it is ultra vires the Patent Act.

Decision relates to:


Canadian Intellectual Property