In a decision dated April 19, 2006, the Patented Medicine Prices Review Board (the "Board") found that LEO Pharma Inc. had sold the medicine DOVOBET in Canada at an excessive price and would be required to return the excessive revenues it collected. However, while the Board said it came very close to concluding that LEO Pharma engaged in a policy of excessive pricing, it did not do so.
The Notice of Hearing in this case issued on November 29, 2004. Evidence was presented during 10 days of hearing in 2005 and oral argument consumed two days in December, 2005. It is the second matter on the merits ever to be concluded before the Board since its inception in 1987.
The DOVOBET product is an ointment that is applied to treat mild to moderate symptoms of psoriasis. It is a combination product, combining the active ingredients of two other marketed products, DIPROSONE and DOVONEX, that are also used to treat psoriasis. According to the Board, "the accomplishment of LEO Pharma in developing DOVOBET was in finding a carrier that could hold the two medicines compatibly in a single ointment" (page 2 of decision).
The main issues in dispute were (1) the medicines to which DOVOBET should be compared (ie. what medicines should be included in the therapeutic class for the purposes of determining the maximum non-excessive price) and then (2) once the comparable medicines were identified, what quantities of the comparable medicines should be compared to what quantity of DOVOBET. This was the first case involving a dispute over the composition of the therapeutic class that had come to the Board for decision.
The Board concluded that the evidence, and the logic of subsection 85(1) of the Patent Act, overwhelmingly supported the comparison of DOVOBET to the prices of the medicines that constitute its two active ingredients, DIPROSONE and DOVONEX. The Board cautioned against "the danger of equating "therapeutic class" with "therapeutic options" (page 16 of decision) and stated that ". . . absent sound evidence to the contrary, the active ingredients of a combination medicine, if sold as separate medicines in Canada, constitute the most appropriate - and indeed uncommonly compelling - therapeutic class for price comparison purposes" (page 17 of decision).
For LEO Pharma to satisfy the requirement for "sound evidence" that would establish greater clinical effectiveness for DOVOBET over DIPROSONE and DOVONEX, it would have had to have conducted "a properly structured and administered (presumably double-blind, head-to-head, statistically sound) trial" ( page 18 of decision). No such trial was conducted. The Board continued to state: ". . . for the guidance of patentees and other stakeholders, it will be noted that the Board has referred in this decision to the requirement that the evidence demonstrate a material difference in clinical effectiveness such as would warrant comparison for pricing purposes to medicines other than those containing the active ingredients of the combination medicine. To be material, the difference in clinical effectiveness would have to be at least statistically significant and therapeutically relevant" (page 21 of decision).
The Board also decided that the appropriate dosage regimen for the comparison of DOVOBET to DOVONEX plus DIPROSONE is the gram to gram comparison (pages 22 - 24 of decision) rather than a "course of treatment" comparison.
On the "policy of excessive pricing" issue, the Board referred to the fact that LEO Pharma had distributed DOVOBET to doctors at no cost, beginning about a year after the Board alleged that DOVOBET was being sold at an excessive price. The Board concluded that this was an artificial program introduced primarily for the purpose of artificially reducing the average transaction price of DOVOBET as reported to the Board in order to avoid the application of the Board's Guidelines. The Board stated that this was arguably indicative of a policy of excessive pricing although it decided not to make that finding (page 27 of decision).
The full text of the decision may be found at:
http://www.pmprb-cepmb.gc.ca/CMFiles/Merits_Reasons_-_Apr_19_0638KEG-4202006-6800.pdf
