PMPRB: Federal Court of Appeal quashes PMPRB Alexion / Soliris Decision with Significant Implications for the New PMPRB Guidelines

In a unanimous July 29 decision, the Federal Court of Appeal (FCA) overturned a Federal Court judicial review and quashed the PMPRB decision in the Alexion Soliris matter.

The far-reaching FCA decision cited a recent and separate SCC decision (Vavilov) that requires courts conducting judicial review of administrative agency decisions to carefully assess the reasoning of the administrative tribunal. Importantly the FCA took issue with the PMPRB’s claim of having a consumer protection role and its pursuit of “reasonable prices”. 

• “Over and over again, authorities have stressed that the excessive pricing provisions in the Patent Act are directed at controlling patent abuse, not reasonable pricing, price-regulation or consumer protection at large”  (FCA para 49)
• “Were the excessive pricing provisions of the federal Patent Act aimed at reasonable pricing, price-regulation or consumer protection at large, they would be constitutionally suspect” (FCA para 49).

Furthermore, in the FCA review of Alexion / Soliris, the FCA took issue with the PMPRB’s departure from the published Guidelines: 

• “It now requires us to ask if there is a sufficient reasoned explanation in support of the Board’s decision. If there is not, the decision is unreasonable and must be quashed. Here, the Board’s decision falls significantly short of the mark.” (FCA para 10).
• “By obfuscating, the Board has effectively put itself beyond review on this point [the relevance and weight of the s. 85 excessive price factors], asking the Court to sign a blank cheque in its favour. But this Court does not sign blank cheques. Administrators cannot put themselves in a position where they are not accountable” (FCA para 44)
• “Where a decision-maker does depart from longstanding practices, established internal authority, or guidelines it bears the burden of explaining that departure in its reasons. If the decision-maker does not satisfy this burden, the decision will be unreasonable: Vavilov at para. 131. “ (FCA para 58)
• “As well, the Board’s departure from the Guidelines and its imposition of a requirement that the medicine be lower than all seven comparator countries was unprecedented. It was a marked departure from its own authorities. In the circumstances of this case, a coherent, relatively detailed explanation is called for. Without it, the departure appears arbitrary and without regard to principles or laws, nothing more than the product of “untrammeled discretion”: Roncarelli, above.”  (FCA para 60)

The above points affect not only the Alexion Soliris case, but also have significant implications in clarifying and limiting the PMPRB’s mandate which in turn brings into question the PMPRB’s new Guidelines and implementation of the amended Regulations – both of which are the subject of separate legal challenges and appeal.

Notably the FCA did not make a determination as to whether or not the price of Soliris was excessive – rather, it determined that the PMPRB was unreasonable in its determination of excessive pricing and returned the matter to the PMPRB for re-determination.

The Attorney General (AG) (representing the PMPRB) may seek leave from the Supreme Court of Canada (SCC) to appeal the FCA decision.  If the AG does not seek leave, or, if the SCC denies leave, or,  confirms the FCA decision, the Soliris case will be returned to the PMPRB for a redetermination – likely a new hearing more than six years after the first notice of hearing.

Stay tuned to PDCI / McKesson for further developments. 

For further information on this and all PMPRB matters contact Kimberly Robinson or Dylan Lamb-Palmer