PMPRB “subverting the will of Parliament”

Teva v Canada (AG) 2013 FC 448 Zinn J (Copaxone II) quashing In re Copaxone PMPRB-2010-D3-Copaxone additional reasons at 2013 FC 500

            PMPRB / Copaxone Syringe

This is the second trip by Teva to the FC appealing a decision of the Patented Medicine Prices Review Board that Teva has sold its Copaxone Syringe at an “excessive” price. In the first decision, 2009 FC 1155 (Copaxone I), Hughes J quashed the decision of the Board for having failed to consider the statutorily mandated factors. Hughes J returned the question to the Board for redetermination. A differently constituted panel of the Board heard the matter, and once again determined that the price was excessive. Zinn J has now held that the decision of the second Board was defective, in exactly the same way as the decision of the first Board, and once again sent the matter back for reconsideration.

Section 85(1) of the Patent Act provides that “the Board shall take into consideration the following factors, to the extent that information on the factors is available to the Board:”

(a) the prices at which the medicine has been sold in the relevant market;

(b) the prices at which other medicines in the same therapeutic class have been sold in the relevant market;

(c) the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada;

(d) changes in the Consumer Price Index; and

(e) such other factors as may be specified in any regulations made for the purposes of this subsection.

Copaxone Syringe was introduced by Teva in 2003 at $36 per daily dose. Teva subsequently increased its price to $43.20, a 20% increase, which was in excess of the CPI for the relevant period.* However, during the entire period, Copaxone Syringe was the lowest priced drug in its class domestically, and it was also consistently sold at a lower price in Canada than in any of the other comparator nations specified by regulation [8]. In Copaxone I, Hughes J found that in finding the price increase excessive, “the Board focused only on the [Consumer Price Index] essentially to the exclusion of the other factors set out in section 85(1). Lip service only was given to these other factors” [49]. He therefore quashed the decision and sent it back for redetermination, “preferably by a different panel” [76].

A different panel was duly constituted, and the Board again concluded that Copaxone Syringe was excessively priced. On appeal, Zinn J, like Hughes J, held that “the Board’s decision must be set aside because it again paid no more than lip service to the factors favouring the conclusion that the medicine was not excessively priced, namely paragraphs 85(1)(b) and (c), and again treated paragraph 85(1)(d), CPI, as a conclusive factor” [38]. The second panel’s attempts to explain why the low domestic and international price should not be given any weight were not persuasive enough to constitute a reasoned decision. For example, with respect to the international comparison, the Board argued that “the comparator drugs’ prices are not from Canada and as such might be affected by exogenous factors such as a different regulatory regime, different income levels, and different health and other socio-economic factors.” But as Zinn J pointed out, “Having enacted this provision, Parliament is presumed to be aware of the difficulties in comparing the price of medicines across borders; despite this, it saw fit to include ‘the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada’ as a factor to be considered when determining whether a drug is being sold at an ‘excessive’ price in Canada. What the Board appears to be saying is that this factor is inherently unreliable and should be given little if not no weight. The Board appears therefore to be subverting the will of Parliament, which clearly saw this as a relevant factor to be accorded weight” [41].

Its difficulties with the Board are no doubt frustrating for Teva, but the bigger question is why the Board appears to be not just “subverting the will of Parliament,” but doing so systematically. The problem is not just that the Board decided unreasonably; one erroneous decision, or even an unreasonable decision, is readily explained as an aberration. But we now have two different Federal Court judges independently concluding that two differently constituted panels have ignored their statutory obligation. This points to a deeper problem.

* Copaxone I at [7], [33], [34], [35], based on the first Board decision, states that the price increase took place all at once on July 1, 2004, while Copaxone II at [7], [15], [18], [21], based on the decision of the second panel, states that the price increase took place over a period of several years, with substantial increases in 2004 and 2005, no increase in 2006-07, and smaller increases in 2008-08. I have no explanation for the discrepancy, but it is not crucial to the reasons of either panel, or to those of the Federal Court.