Some provisions of federal patented drug pricing regime unconstitutional

The federal government will have to overhaul its regulatory approach and guidelines over patented drug pricing after the Quebec Court of Appeal found a couple of provisions to be unconstitutional and outside the scope of federal jurisdiction over patents, according to a legal expert.

The Appeal Court ruling, expected to have a significant impact on the pharmaceutical industry in Canada, upheld the constitutionality of the legislative framework of the Patented Medicines Prices Review Board (PMPRB) and it current regulations. In a unanimous decision, the Appeal found that controlling abusive pricing of medicines resulting from a monopoly conferred by a patent has a logical, real and direct connection with federal jurisdiction over patents and does not constitutionally encroach on provincial jurisdiction.

But the Appeal Court struck down two provisions of the 2019 proposed amendments to the federal patented medicines pricing regime because it went beyond its jurisdiction on patents and infringed provincial jurisdiction to regulate pricing.

“The decision is important because it gives pretty clear guidance to the federal Parliament about the limits of its powers to legislate in relation to patents,” said Miriam Clouthier, a Montreal lawyer with IMK who represented the Canadian Cystic Fibrosis Treatment Society who were interveners in the case. “The Appeal Court clearly states that the federal Parliament is allowed to legislate in respect of excessive or abusive prices charged for patented medicines. But that the federal government is not allowed to introduce legislation, the main thrust of which is to lower prices across the board or to lower prices in a whole market or industry.”

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This story was originally published in The Lawyer’s Daily.

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