Monday, May 27, 2013

Teva Canada Innovations v. Canada (Attorney General)

Monday, May 27, 2013
Last month the Federal Court released its decision setting aside the decision of the Patent Medicine Prices Review Board (the “Board”) which found Teva Canada Innovations (“Teva”) had sold its Copaxone Syringe in the Canadian market at an “excessive price” and ordered Teva to pay almost three million dollars in compensation to the Federal Government.

The full text of the case can be found at:

As noted in Justice Zinn’s decision, this is the second time the Federal Court has quashed the Board’s finding that Teva’s Copaxone Syringes were sold at excessive prices. In the first case, Justice Hughes quashed the decision of the Board and referred it back to the Board for redetermination in Teva Neuroscience GP-SENC v Canada (Attorney General), 2009 FC 1155. (See paragraph 2 of FC decision). Justice Hughes had found that

the Board had improperly limited its attention to only one of the four factors that must be considered under subsection 85(1) of the Patent Act, namely paragraph 85(1)(d) – “changes in the Consumer Price Index,” and that “[l]ip service only was given to [the] other factors [in subsection 85(1)].” Justice Hughes returned the matter to the Board “for redetermination preferably by a different panel if sufficient members can be provided for that purpose […] [and] [i]n redetermining the matter the Board must consider all factors in section 85(1) and provide intelligible, clear reasons as to the consideration and weight given to each factor.” (Paragraph 10)

Subsection 85(1), states: ·

  • 85. (1) In determining under section 83 whether a medicine is being or has been sold at an excessive price in any market in Canada, the Board shall take into consideration the following factors, to the extent that information on the factors is available to the Board: 

(a) the prices at which the medicine has been sold in the relevant market;  
(b) the prices at which other medicines in the same therapeutic class have been sold in the 
relevant market; 
(c) the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada;  
(d) changes in the Consumer Price Index; and  
(e) such other factors as may be specified in any regulations made for the purposes of this subsection. 
In particular, the Board in making its decision discounted the facts that the Copaxone Syringe was the lowest priced medicine in its therapeutic class and that the Copaxone Syringe was priced lower in Canada than in other countries.

Justice Zinn found that the Board in its redetermination had again only paid “lip service” to paragraphs 85(1)(b) and (c). Justice Zinn’s comments with respect to the reason why decisive weight was given to CPI are particularly interesting. Justice Zinn noted that the Board had considered it’s own Guidelines to be binding and disregarded the language of the Statute.
In short, the Board has fallen into exactly the error suggested by Justice Hughes– it has considered the Guidelines, and specifically those portions dealing with CPI to be binding. The Guidelines are not binding: See Patent Act, s 96(4). As Justice Hughes noted at para 32 of his decision: “Where the Guidelines or their application conflicts with the Act or Regulations, they cannot prevail.” As was noted by Justice Rothstein, as he then was, in ICN Pharmaceuticals, Inc v Canada (Patented Medicines Prices Review Board), [1996] FCJ No 112, para 6, footnote 2: “Had it treated the Guidelines as binding, the Board may well have erred.” (paragraph 45) 
Although this case related to the PMPRB, it is more generally applicable. In particular, it should serve as a reminder to the Patent Office and its Examiners and the Patent Profession, that documents created by the Patent Office to facilitate prosecution of an application including MOPOP and guidance documents are not binding and are just guidelines.

By Claire Palmer