PMPRB’s Jurisdiction Limited to Patented Medicines

In the recent decision Galderma Canada Inc v. Canada (Attorney General) (2024 FCA 208), the Federal Court of Appeal (FCA) overturned decisions of the Federal Court and the Patented Medicine Prices Review Board (the PMPRB) that allowed the PMPRB to seek information concerning the price of an unpatented medicine (2024 FC 46).

Background

The PMPRB regulates the prices of patented medicines sold in Canada to ensure that they are not excessive. Galderma Canada Inc. (Galderma) markets in Canada two dermatological medicines, DIFFERIN (0.1% adapalene) and DIFFERIN XP (0.3% adapalene), both used to treat acne. DIFFERIN went off patent in December 2009. DIFFERIN XP went off patent in 2016. Following the expiry of patent protection for DIFFERIN in 2009, Galderma stopped providing the PMPRB with pricing information for DIFFERIN.

In 2016, the PMPRB ordered that Galderma produce pricing information for DIFFERIN for the period of 2010-2016 when it was unpatented, based on the then-existing patent for DIFFERIN XP. Galderma refused to provide the information and sought judicial review of the order—which was subsequently considered (and reconsidered on remand) by various levels of the court.

Appeal

Before the FCA, the PMPRB argued that it could, in fact, regulate the pricing of the unpatented medicine DIFFERIN because Galderma had a still-active patent that covered the use of a higher concentration of adapalene, the same active ingredient used in DIFFERIN. While the still-active patent covered the higher concentration medicine, DIFFERIN XP, it did not cover the lower concentration DIFFERIN medicine.

Notwithstanding that DIFFERIN was not covered by the DIFFERIN XP patent, the PMPRB highlighted that the invention of the DIFFERIN XP patent was simply the higher concentration of the same active ingredient in DIFFERIN, and that patients can often use DIFFERIN and the patented higher concentration DIFFERIN XP medicine interchangeably. Thus, in the PMPRB’s view, Galderma remained a “patentee” under the Patent Act with respect to DIFFERIN because it is a “person for the time being entitled to the benefit of the patent for that invention” and “an invention pertains to a medicine if the invention is intended or capable of being used for medicine or for the preparation or production of medicine.”

The FCA disagreed with the PMPRB. Noting decades of Canadian jurisprudence confirming that the PMPRB can regulate the pricing of patented medicines, not unpatented medicines, the court reasoned:

1. After the patents covering the DIFFERIN medicine expired, Galderma was no longer entitled to the benefit of the patent for the invention for DIFFERIN and was no longer a “patentee.”
2. The active, higher concentration patent was a “use patent” and did not cover the active ingredient in DIFFERIN itself. The PMPRB cannot “stretch and pull” the higher concentration patent to cover the use of a different concentration of the active ingredient.
3. The Patent Act does not give the PMPRB the power to review unpatented medicines—had it done so, it would have extended the PMPRB’s power beyond its constitutional limits.
4. The Patent Act does not provide for the regulation of an unpatented medicine just because a patented medicine might be used in its place or because it shares some unpatented properties of the patented medicine.

While the FCA confirmed that the PMPRB can require “a former rights holder for an invention pertaining to a medicine” to provide it with pricing and other information pertaining to the period the medicine was under patent, the information the PMPRB was seeking in this case about the period when the medicine was unpatented is not provided for under the Patent Act.

Conclusion

This decision has provided much-needed clarity on the jurisdiction of the PMPRB. The mandate of the PMPRB is to regulate the prices of patented medicines sold in Canada to ensure that they are not excessive. Nevertheless, it is clear that the reach of the PMPRB extends only to patented medicines, and not unpatented medicines.

Please contact the author or a member of the Intellectual Property Group at Aird & Berlis LLP if you have any questions or require assistance in regards to patents or jurisdiction issues.