Court Finds No PMPRB Jurisdiction on US Sales of Products available under Special Access

The Federal Court has decided that the Patented Medicine Prices Review Board (PMPRB) lacks jurisdiction to regulate the price of a medicine sold to Canadians under the Special Access Programme (SAP ) where the commercial location of sale is outside Canada. The decision that issued March 17, 2009 was in respect of a judicial review application of the PMPRB's January 21, 2008 decision, in which the PMPRB had found that it had jurisdiction to require Celgene Corporation ("Celgene") to provide pricing information concerning the sales of THALOMID which had been provided to Canadians under the SAP.

Celgene is located in the USA and does not have an NOC to market THALOMID in Canada, but has provided the drug to patients residing in Canada under the SAP. The issue in this case was the correct interpretation of the phrase "sold in any market in Canada". The Court concluded that the words should be given their grammatical and ordinary meaning and should be given a commercial meaning. Applying a commercial meaning of "sold", the Court accepted that the commercial locus of the sales to Canadian patients was in the USA, given that all of the indicia of sale occurred there. The Court concluded that without a sale in Canada, there was nothing for the PMPRB to control.

The Court also concluded that on the commercial meaning of "market", the SAP sales were not sales in a market. The Court rejected the Attorney General's argument that Health Canada's decision to allow products for patients under the SAP created the demand and therefore SAP sales constituted a market. The Court held that demand does not define a market and that a commercial market cannot exist without a buyer and seller. The Court held that for a market to exist in Canada, there must be both a purchase and a sale in Canada, which was not the case here. As for a purposive construction of the words, the Court held that there was no evidence on the record that one of the objects of the PMPRB's jurisdiction granted under the Patent Act was to provide jurisdiction over sales made outside of Canada. The Court noted that there was no evidence that Parliament had any intention other than that expressed in the plain meaning of the words used in the Act. The Court held that THALOMID was sold to Canadians, but the medicine was not being sold "in any market in Canada" and therefore the Board had no jurisdiction over those sales.

A Notice of Appeal has been filed by the Attorney General.

Gowlings represented Celgene. For more information, contact Bill Vanveen at 613-786-0153 or at william.vanveen@gowlings.com.

A copy of the decision can be found at:
http://www.gowlings.com/resources/enewsletters/DrugPricingReimbursement/pdfs/ V3N06_20090420.pdf