PMPRB Club: Federal Court Decision on Pre-Patent Jurisdiction, Actual vs. Forecast CPI, and Exchange Rates December 2007

In this issue:

• Federal Court Decision on PMPRB Retroactive Pre-Patent Jurisdiction
• CPI November 2007
• Exchange Rates December 2007
• Hearing Dates for 2008

• On December 13, 2007, the Federal Court published a decision concluding that the Board does have jurisdiction over pricing during the pre-patent period, based on motions put forward by Shire and Janssen-Ortho. The following reasoning was provided:
• The Patent Act gives the Board power to make orders to patentees who are found to be selling the medicine at an excessive price.
• The Patent Act defines a “patentee” as being entitled to the benefit of the patent pertaining to a medicine.
• The patent applicant enjoys a certain (though not full) benefit during the patent pending period, including the right to sue for reasonable compensation, once the patent grants. Even though more enforcement options are available to a patentee only for the period after the patent grants, this benefit is construed to be sufficient to protect a patentee from patent infringement. Therefore a patentee need not enjoy the full benefit pertaining to a patent in order to be considered a “patentee” and thus to fall under the Board’s jurisdiction.
• The Board was created to mitigate the possibility of abuse of market power through setting excessive prices. Therefore, although evidence of market power may be a factor in the determination of whether prices are excessive, it is not necessary to have such evidence in order for the Board to exercise jurisdiction over a medicine.
• Note that in 2005, the Federal Court had published a decision (Hoechst vs. Canada) concluding that the Board does not have jurisdiction over a medicine prior to the granting of the first patent.

• In April 2006 the Board published CPI forecasts for the year 2007. Latest CPI figures are available as of the end of November 2007. Following is a summary table of the forecast and actual figures:

• If the actual CPI is lower than forecast, 2007 MNE's may be lower than those provided in the Jan-June 2007 Compliance Reports.

• Here are the Board’s 36-month exchange rates for December 2007, and their change over June 2007 and December 2006:

• If the allowable price for any of your patented medicines is capped by the international maximum, these lower exchange rates mean that 2007 MNE's may be lower than those provided in the Jan-June 2007 Compliance Reports.