Patented Medicine Prices Review Board “crashed through the constitutional, statutory and jurisprudential guardrails”
The Federal Court of Appeal issued strong reasons reprimanding the Patented Medicines Prices Review Board for overstepping its jurisdiction. The Court found “the Board crashed through the constitutional, statutory and jurisprudential guardrails. Or to use the more orthodox, formal, administrative law language […] the Board exceeded the constraints acting upon it.”
The Board regulates the pricing of medicines that are under the market power given by a patent. It does not regulate unpatented medicines.
Galderma’s product, Differin, was a patented medicine until the patent expired in 2009. In 2016, the Board ordered Galderma to produce pricing information for periods after Differin became unpatented. The Board considered that Differin remained a patented medicine on the basis that there remained a patent (the 237 Patent) relating to Differin XP, a separate medicine with a higher concentration of the same active ingredient. The Federal Court found the Board’s decision was reasonable.
Writing on behalf of a unanimous Court, Justice Stratas reversed that decision and set aside the Board’s order. The FCA found that decades of consistent jurisprudence from multiple jurisdictions have confirmed and reconfirmed that the Board can regulate the pricing of patented medicines, not unpatented medicines. Justice Stratas even made note that: “After all, it’s right in the Board’s name: the Board is the ‘Patented Medicine Prices Review Board’, not the ‘Patented and Unpatented Medicine Prices Review Board’ or the ‘All Medicine Prices Review Board’.” The Board “does not have any freestanding consumer protection or general price regulation mandate.” The Court found that neither the Constitution, Patent Act, nor relevant jurisprudence provide the Board with the power to regulate the prices of unpatented medicines during the period they are unpatented.
The FCA held that Differin is not a patented medicine. Galderma was no longer a patentee as it was no longer “entitled to the benefit of the patent for [the] invention”, namely the lower 0.1% concentration of the active ingredient in Differin. The 237 Patent is a “use patent” and, as a matter of patent law, “the Board cannot somehow stretch and pull that ‘use patent’ to cover Differin”, which does not embody the claimed use in any way. Section 79(2) of the Patent Act does not give the Board the power to review unpatented medicines. Doing so would extend the Board’s power beyond constitutional limits.
The FCA noted that the Board’s dedication to pursing its important mandate is worthy of praise. However, “like all administrative decision-makers, the Board must stay within the constraints imposed by the Constitution, its governing statute (the Patent Act, interpreted reasonably in the administrative law sense), and the jurisprudence under each.”
A copy of the FCA’s decision can be found here.
