Federal Court Of Appeal Rules Patented Medicine Prices Review Board Can’t Regulate Unpatented Medicines

On December 3, 2024, the Federal Court of Appeal (the Court) released an en banc judgement in Galderma Canada Inc. v Canada, 2024 FCA 208, reversing a decision of the Federal Court (2024 FC 46, January 11, 2024).

The case arises from an attempt by the Patented Medicines Prices Review Board (PMPRB) to demand pricing information from Galderma Canada Inc. for its Differin drug product (containing the active ingredient, adapalene). Interestingly, the PMPRB demanded pricing information for a six-year period after the patent pertaining to Differin expired. (The PMPRB is permitted to ask for such information for up to three years post-patent expiry in some circumstances, essentially when the former patentee is still benefiting from some sort of carry-over market price advantage from the fact that the product was formerly patented.)

The PMPRB’s justification for this related to a later-expiring and still in-force patent for the use of a greater dose of the same active ingredient in an extended-release formulation (Differin XP). The Differin XP patent, in the view of the PMPRB, was relevant to the pricing of the Differin, since the two products could be interchanged.

The Court was scathing in its rejection of the PMPRB’s position. It went so far as to say that this was a case where it didn’t matter if the standard of review was correctness or reasonableness, as the lower court’s decision was both incorrect and unreasonable. The Court stated that “By making that order, the Board crashed through the constitutional, statutory and jurisprudential guardrails.” The Court found that the PMPRB’s jurisdiction is limited to patented medicines. Stratas J.A. also held that, “Nowhere does the Patent Act say that the Board can regulate 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.”

Interestingly, the Court opined on the fact that the still-valid patent was a use patent, and wrote that, “As a matter of patent law, the Board cannot somehow stretch and pull that “use patent” to cover Differin, which uses a different concentration of adapalene . . . “. This could be interpreted as a comment on recent case law as high as the Supreme Court of Canada that seems to suggest that use patents for drug combinations can somehow cover drug monotherapies that are no longer under patent.

Summary By: Gordon Jepson