Long Running Copaxone PMPRB Case to be Settled by VCU

BREAKING NEWS:  The PMPRB will release on its website later today the terms of a VCU that it has reached with Teva Canada to settle the long-running Copaxone dispute.

A two-day Board Panel hearing on the matter had been scheduled to start on February 18th.  It would have been the third such hearing.

The terms of the VCU will be of particular interest to branded drug companies as PMPRB staff and Teva were in significant disagreement as to how the matter should be resolved, and Teva had been successful in having the Federal Court quash two prior PMPRB Board Panel decisions.

The Federal Court clearly stated in both prior decisions that the PMPRB Board in reaching a decision must give full consideration to each of the factors set out by Parliament in subsection 85(1) of the Patent Act and, importantly, in relying on one factor over the others, must clearly and intelligibly explain the reasons it has done so.  In both reviews, the court found that the Board had merely paid “lip service” to all factors other than ‘changes in the Consumer Price Index’, upon which the Board placed primary weight in its decisions that Copaxone had been excessively priced.

In the most recent decision (April 30, 2013), Mr. Justice Zinn wrote that the PMPRB Board, in giving primary weight to the CPI factor without proper explanation or justification, had acted as if it was bound by the Guidelines – an error of law entitling Teva to a reconsideration of the Copaxone case by a new Board Panel.  Only Board Staff are bound by the Guidelines; the PMPRB Board may consider the Guidelines, but is not bound to follow them.  Instead, its primary consideration should be whether, based on the Patent Act and its applicable regulations, a drug may reasonably be found to have been sold at an excessive price.

This last minute VCU eliminates the need for the scheduled third Board Hearing.  It also relieves the PMPRB Board of having to try once again to reconcile the apparently irreconcilable, namely, how a drug that is and has been the lowest priced among its Canadian comparators, and has a domestic price that is not higher than prices in the seven PMPRB reference countries – two of the factors set out in s. 85 of the Patent Act – can nevertheless be excessively priced because it took a series of price increases that exceeded allowable CPI-based limits as defined by the PMPRB Guidelines.

Observers will be looking closely to see just how much the PMPRB was willing to concede in the VCU in order to dispense with this third hearing and eliminate the potential for yet another trip to the Federal Court.

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