Federal Court finds that some amendments to Patented Medicines Regulations are ultra vires

In 2020 FC 725, the Federal Court released its decision in an application for judicial review regarding recent amendments to the Patented Medicines Regulations under the Patent Act, which are scheduled to come into force on January 1, 2021.

The Applicants sought a declaration that certain provisions of the Regulations Amending the Patented Medicines Regulations (Additional Factors and Information Reporting Requirements) (the “Amendments”) are invalid because they are ultra vires the Patent Act.

The Impugned Amendments at issue were:

• Section 4 of the Amendments, which requires the Patented Medicine Prices Review Board to consider three new mandatory economic factors and requires patentees to report related information;
• Section 6 and the schedule to the Amendments, which replace the price comparator countries listed in the schedule to the Regulations; and
• Subsection 3(4) of the Amendments, which requires patentees to alter the way that price is calculated and reported to the Patented Medicine Prices Review Board (such that the "actual price" obtained by the patentee be used, "taking into account any adjustments that are made by the patentee or any party that directly or indirectly purchases the medicine or reimburses for the purchase of the medicine and any reduction given to any party in the form of free goods, free services, gifts or any other benefit of a like nature").

The Court found that the Impugned Amendments in sections 4 and 6, and the schedule to the Amendments are intra vires the Patent Act .

However, the Court found that the Impugned Amendment in subsection 3(4) of the Amendments is ultra vires the Patent Act and thus is invalid and of no force and effect. In light of this finding, subsection 4(4) of the existing Patented Medicines Regulations will continue to operate as it currently reads.

Authors: Jordan Scopa and Jaclyn Tilak