Tough Pill to Swallow: the Constitutional Challenge Threatening Access to Pharmaceuticals in Canada

Posted By Chris Laliberté

Not all diseases are created equal. Many incredibly rare conditions, such as paroxysmal nocturnal hemoglobinuria (PNH) and atypical haemolytic uremic syndrome (aHUS), occur in only a small percentage of people. These orphan diseases, defined by the FDA as occurring in less than 200,000 people across the United States, have such low prevalence rates that pharmaceutical companies are rarely willing to undergo the research, development, and manufacturing process necessary for limited commercial opportunities. As a result, many orphan diseases have finite treatment options, if any.

Those suffering from PNH and aHUS can count themselves among the lucky few. Not only do they have a treatment for their conditions, but one that has proven highly effective: Soliris. The only hitch – and a major one, at that – is the price tag, ringing in at over $700,000 per year for the rest of the person’s life. Despite its proven effectiveness and life-saving impact, the hefty cost has made public healthcare plans and services hesitate before approving coverage, leaving Canadians like Glen Dornian wondering if they will live long enough to regain their quality of life.

Without any justification for this exorbitant cost, the federal regulator has filed for a hearing to impose a limit on the price of Soliris in Canada and recoup some of the costs incurred over the past few years. Alexion Pharmaceuticals has responded with a countersuit that could threaten the stability of equal access to treatment in Canada.

Law

The Patented Medicine Prices Review Board (PMPRB), who acts as a regulatory watchdog for pharmaceutical pricing in Canada, filed a statement of allegations against Alexion Pharmaceuticals on January 15th of this year regarding the price of the drug Soliris. The statement claims that Alexion has, since 2012, sold Soliris to Canadians at an excessive price and demands that the company bring its pricing down to reasonable levels.

On September 11th, Alexion Pharmaceuticals filed a countersuit through the Federal Court in an attempt to block the PMPRB’s hearing. Alexion is seeking a writ of prohibition pursuant to s.18 of the Federal Courts Act on the grounds that the Board’s claim lays ultra vires federal jurisdiction. They allege that pharmaceutical pricing falls under provincial powers pursuant to s. 92(13) of the Constitution, which grants regulatory jurisdiction in matters of property to the province.

Now, s.83 of the Patent Act imbues the PMPRB with rights to enact the following:

(a) reduce the price at which the patentee sells the medicine in any market in Canada, to such extent and for such period as is specified in the order;

(b) reduce the price at which the patentee sells one other medicine to which a patented invention of the patentee pertains in any market in Canada, to such extent and for such period as is specified in the order; or

(c) pay to Her Majesty in right of Canada an amount specified in the order.

However, Alexion’s challenge will ask the federal court to rule on whether s.91(22) of the Constitution, which addresses “Patents of Invention and Discovery” and would allow the Board’s motion to proceed, has supremacy over s.92(13).

A Federal Court ruling in favour of Alexion, if not appealed, would establish precedent that handcuffs the PMPRB due to the division of powers in the Constitution. If the Board is incapacitated in this way, it would fall to Provincial Governments to impose limitations on pharmaceutical prices.

Policy

Canadians in need of pharmaceutical treatment already face inequality due to coverage variations from province to province. Since each province decides what its own system will cover, and for what disease – Ontario just recently approved coverage of Soliris prescriptions for aHUS – those in need of life-saving medicine could find themselves fighting an uphill battle for no reason other than holding the wrong health card.

A ruling in this case that places pharmaceutical pricing regulation in provincial hands would likely exacerbate these inequalities. Unless the provinces work together on parallel legislation imposing the same restrictions in every jurisdiction, then disparities in pricing could have serious detrimental effects concerning access to Soliris.

Whether, and how much, each province chooses to limit the sale price of particular pharmaceuticals could drastically affect which Canadians have access to the treatment they need, the cost, and who pays. Provinces could, with both options under their jurisdiction, justify the exclusion of such drugs from public coverage with a limit on the sale price. Rather than work orphan disease treatments like Soliris into the healthcare budget, a province could instead claim the imposition of a “reasonable” price as having done its duty to the patients and insurers who would have to bear the cost.

Alternatively, disparities in price caps from province to province could result in drugs like Soliris becoming unavailable in certain jurisdictions. Alexion has no obligation to offer the drug in every jurisdiction, and would have no reason to distribute in provinces with heavy restrictions on pharmaceutical pricing. Canadians whose lives depend on such treatments would then have to move or travel in order to seek the care they need.

It would seem far more appropriate, then, for the Federal Government and the PMPRB to retain their regulatory powers over pharmaceutical pricing. While federally imposed price caps cannot guarantee that every province will elect to cover the treatment, the lower costs make coverage more appealing while the nationwide consistency ensures equal access and availability to every Canadian. While a pharmaceutical company like Alexion could feasibly limit distribution to provinces with favourable price caps, it seems highly unlikely that a nationwide cap would drive them to withdraw from Canadian markets entirely.

Conclusion

That a life-threatening condition occurs in only a small percentage of the population should not preclude those patients from equal access to treatment in Canada. While the PMPRB has sought to reduce the burden on Canadian healthcare and increase accessibility to treatment by imposing a limit on the excessively priced Soliris, the countersuit by Alexion threatens to produce a ruling that could destabilize the availability of pharmaceuticals due to provincial disparities in regulation. To preserve and enhance equal access to medical treatment across Canada, the Federal Court should reject Alexion’s countersuit and uphold the Board’s power to regulate pharmaceutical prices at the federal level.

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