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PATENTS - Patented medicines - Excessive prices

Thursday, September 02, 2021 @ 5:34 AM  

Lexis Advance® Quicklaw®
Appeal by Alexion Pharmaceuticals from the dismissal of its application for judicial review of a decision of the Patented Medicine Prices Review Board finding that Alexion priced its drug, Soliris, excessively. Soliris was a breakthrough treatment for two rare and life-threatening blood-related disorders. The Board relied upon the fact that the list price of Soliris was higher than the price in one of the seven countries used for comparison purposes. This was the first time the Board ever imposed the requirement that the price of Soliris had to be lower than that of all seven comparator countries. Alexion submitted to the Board that the Board’s decision to require Soliris to be below the price in the seven comparator countries was contrary to s. 85 in that it exalted the factor of international prices under s. 85(1)(c) above all other factors and effectively read out of the section the factor of the consumer pricing index in s. 85(1)(d).

HELD: Appeal allowed. This matter should be sent back to the Board for redetermination. The Board’s decision was not reasonable since a reasoned explanation for some key portions of the Board’s decision could not be discerned. The Board did not appear to deal with Alexion’s submission regarding s. 85. While the Board explicitly said that it would not consider the s. 85(2) factors, in particular the cost of making and marketing the medicine, the Board then considered the issue of cost under s. 85(2). The Board also considered some commentary on the pricing situation in countries beyond the seven comparators. The Board misunderstood the mandate Parliament gave to it under s. 85. At a minimum, a reasoned explanation on this was missing. The Board’s decision in this case was an unprecedented departure from its Guidelines, which normally referred to the highest international price as a key comparator, to find Soliris was excessive because it was more than the lowest international price without any explanation for its decision to depart from the Guidelines. The Board ordered Alexion to forfeit excess revenues earned between 2009 and 2017 to the Crown under s. 83. This remedial order was either substantively unreasonable or a reasoned explanation for it could not be discerned. In making its remedial order, the Board did not consider the actual prices received by Alexion for Soliris and instead used list prices. As a result, the amount that Alexion was ordered to pay to the Crown included revenues that Alexion never actually received.

Alexion Pharmaceuticals Inc. v. Canada (Attorney General), [2021] F.C.J. No. 812, Federal Court of Appeal, D.W. Stratas, W.W. Webb and D.J. Rennie JJ.A., July 29, 2021. Digest No. TLD-August302021007