Canada’s Intellectual Property Firm

Confidential rebate reporting and new price regulatory factors of the amended Patented Medicines Regulations declared invalid by the Quebec Court of Appeal

Update: The Attorney General of Canada did not seek leave to appeal. On April 14, 2022, the Minister of Health announced that the amendments to the Patented Medicines Regulations would come into force on July 1, 2022 in a substantially amended form.  


 

On February 18, 2022, the Court of Appeal of Quebec released its decision in Merck Canada Inc c Procureur général du Canada (2022 QCCA 240). This is the appeal of the Quebec Superior Court decision declaring price and revenue calculation provisions of the amended Patented Medicines Regulations (“the Regulations”) unconstitutional.

The Court of Appeal varied the judgment of the Quebec Superior Court, and declared ultra vires, invalid and of no effect:

  • New Paragraphs 4(4)(a) and (b) of the amended Regulations, which would have required price and revenue reporting to take into account confidential rebates provided to provincial payers; and
  • New Sections 4.1, 4.2, 4.3 and 4.4 introducing three new price regulatory factors (pharmacoeconomic value, market size, and Gross Domestic Product (GDP) in Canada and GDP per capita in Canada), and the related reporting requirements.

The Quebec Superior Court had found only new Paragraphs 4(4)(a) and (b) unconstitutional.

The Court of Appeal affirmed the lower court judgment declaring valid the remainder of the amended Regulations, including the amended “basket” of reference countries used to establish the price ceiling for a patented medicine (the PMPRB11), and the provisions in the Patent Act relating to PMPRB jurisdiction.

Leave to appeal to the Supreme Court of Canada may be sought.

The amended Regulations will also come under judicial scrutiny in the appeal of the Federal Court decision striking down the price and revenue reporting provisions of the Regulations, which is scheduled to be heard on February 28, 2022.

Should you have any questions, please do not hesitate to contact a member of the Life Sciences Regulatory & Compliance Group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.