Court rules Canadian drug regulators cannot control generics' prices

Home/Policies & Legislation | Posted 27/06/2014 post-comment0 Post your comment

Canada’s Patented Medicine Prices Review Board (PMPRB) has been told that it has no jurisdiction over the pricing of generics.

Law V13C29

The country’s Federal Court ruled in cases brought against the PMPRB by Sandoz Canada and Ratiopharm (now Teva Canada) that the companies were not ‘patentees’. Therefore, the PMPRB ‘has no power’ to order the companies to comply with the Act and Regulations.

The PMPRB had claimed that Sandoz and Ratiopharm came under the definition of ‘patentees’ because they both sold medicines that were patented, thus giving the PMPRB the jurisdiction to demand that they file pricing information and to set prices on their products. The PMPRB came to this conclusion based on the fact that Sandoz is a subsidiary of originator company Novartis and that Ratiopharm had a license for its salbutamol inhaler (Ratio HFA) from originator company GlaxoSmithKline.

The Canadian Federal Court, however, in its rulings of 27 May 2014, disputed this claim. The court stated that ‘while the federal government can regulate patents of invention, it has no overall jurisdiction to regulate the price of generic versions of patented medicines.’ The court added that ‘the mere fact that a subsidiary or generic company sells a version of a patented medicine (even under contract) is insufficient to bring it within the definition of a patentee’.

The court also overturned the PMPRB’s claim that Ratiopharm was selling its salbutamol inhaler (Ratio HFA) at an excessive price and that Ratiopharm must pay damages of CA$65,898,842.76. This demand from the PMPRB came as a result of Ratiopharm’s decision to increase the price of its inhaler from CA$4.50 to CA$7.50 in line with its competitors, even though this was still CA$5 under the price of the originator product (Ventolin HFA).

‘The decision means that generic drugmakers who do not hold patents themselves and do not exercise monopoly power need not file price information with the Board,’ according to Gavin MacKenzie of Davis LLP, who represented Ratiopharm and Sandoz.

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Source: Canada Federal Court, Financial Post

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