PMPRB excessive price decision quashed by Federal Court of Appeal

The Federal Court of Appeal has quashed an excessive-price decision of the Patented Medicine Prices Review Board (PMPRB) in a proceeding concerning the drug SOLIRIS. The matter has been remitted to the PMPRB for redetermination.

Procedural background

The PMPRB issued a decision in 2017 finding that Alexion Pharmaceuticals Inc. sold SOLIRIS (eculizumab) at an excessive price in Canada and ordering Alexion to remit excess revenues earned between 2009 and 2017. Alexion’s application was dismissed by the Federal Court in 2019. The Federal Court of Appeal has reversed this finding and granted Alexion’s application on the basis that the Board’s decision was unreasonable.

The PMPRB’s decision was unreasonable

The Court of Appeal found that the PMPRB’s decision failed to meet the standard of reasoned explanation required of an administrative decision-maker following the Supreme Court’s decision in Vavilov.

Writing for a unanimous Court, Stratas J.A. referred to a number of shortcomings in the Board’s reasons. Notably, the Board failed to explain “whether the price is ‘excessive’ within the meaning of section 85” of the Patent Act.

The Court of Appeal also expressed concerns regarding the Board’s interpretation of its own mandate:

[11]   As well, the reasoned explanation provided by the Board—such as it is—raises real concerns about its substantive reasonableness in some respects. In particular, certain words the Board used suggest that it went beyond its permissible statutory mandate by regulating the reasonableness of pricing, rather than preventing abusive pricing, i.e., excessive pricing made possible by the abuse of the monopoly power given by a patent.

Disposition

The Federal Court of Appeal allowed Alexion’s appeal, set aside the judgment of the Federal Court judge, and remitted the matter to the PMPRB for redetermination. Alexion was awarded its costs on appeal and below.