In Galderma’s long-running dispute with the PMPRB, the Federal Court (per Fothergill J.) recently upheld the PMPRB’s decision that Galderma’s patent claiming the use of a 0.3% adapalene formulation “pertained” to its DIFFERIN (0.1% adapalene) product.
This is the most recent chapter in a decade-long dispute between Galderma Canada Inc. (“Galderma”) and the Patented Medicine Prices Review Board (“Board”) with respect to the pricing of an anti-acne medicine known as DIFFERIN. The facts and procedural history provide important context and require a brief explanation.
The products and patent
Galderma sells two products in Canada containing adapalene as the active ingredient: DIFFERIN (0.1% w/w) and DIFFERIN XP (0.3% w/w). Galderma has rights in respect of a Canadian Patent claiming the use of a 0.3% adapalene formulation to treat acne (“Patent”), but its patent rights in respect of adapalene per se and the 0.1% w/w/ formulation had expired at the relevant time.
Failure to report
In or about 2012, Galderma notified the Board of its intention to sell DIFFERIN XP and agreed to provide pricing information pursuant to the reporting obligations under the Patent Act (“Act”). Galderma took the position that it was not required to report prices for DIFFERIN because the Patent does not “pertain” to that product and there is no “rational connection” between that product and the invention claimed in the Patent. Board Staff (“Staff”) disagreed and asserted that the Patent pertains both medicines, even though the Patent claimed a 0.3% adapalene formulation and DIFFERIN contains 0.1% adapalene. Staff did not plead that the Patent pertains to DIFFERIN because of any alleged clinical similarities between DIFFERIN and DIFFERIN XP.
In December 2016, a Board Panel held that the Patent pertains to DIFFERIN because the Patent does not “relate exclusively to a 0.3% concentration of adapalene” and that “at least on its face, it appears that the use of 0.3% adapalene may be one (and not the only one) of [its] objectives.” The Panel pointed to the existence of a shared product monograph and the clinical similarities of the two products in support of its conclusion (“Board Decision”).
Judicial Review #1 (2017 FC 1023)
On November 9, 2017, the Federal Court (per Phelan J.) set aside the Board Decision and sent the matter back to the Panel for redetermination. The Court held that the Panel erred in its analysis of the “invention” and failed to explain how the Patent for 0.3% w/w adapalene can be used for a medicine with 0.1% w/w adapalene, i.e., “pertains”.
Appeal (2019 FCA 196)
On June 28, 2019, the Federal Court of Appeal (“FCA”) held that the Panel’s interpretation of the Patent was unreasonable and that this error may have impacted its analysis of whether the invention pertains to the medicine (i.e., adapalene 0.1% w/w). The FCA sent the matter back to the Board to redetermine whether the Patent pertained to the medicine with the following instructions:
- The invention is the use of a 0.3% w/w concentration of adapalene to treat dermatological conditions.
- The medicine is adapalene 0.1% w/w (aka DIFFERIN).
- The invention pertains to the medicine if it falls within the statutory definition, viz. is the “invention intended or capable of being used for medicine or for the production of medicine.” The Court further cautioned that metaphors from prior jurisprudence, such as “rational connection” and “merest slender of a thread”, cannot supplant this statutory definition.
The FCA concluded its analysis by observing that the same product monograph applies to both DIFFERIN and DIFFERIN XP and it does not appear to suggest any clinical differences between the two products. The FCA noted that “in cases such as this, where the question is whether an invention pertains to a specific medicine, what kind of clinical similarities would support a finding that the invention of a patent was intended or capable of being used for that medicine?” No statutory basis for this statement was provided.
Staff argued that the Board must examine the connection between the invention and the medicine in a “broad and flexible manner” to achieve the “consumer protection goals” set out in Celgene (2011 SCC 1). This includes clinical similarities between DIFFERIN and DIFFERIN XP, as well as related policy considerations. Staff asserted that the invention of the Patent at issue in this case pertains to DIFFERIN because both products use the same molecule (adapalene), for the same purpose (treating dermatological disorders – specifically, acne), and are clinically similar (they have substantially similar therapeutic effects and side effects). The invention of the Patent thus “pertains” to the medicine, DIFFERIN.
Galderma argued that any “clinical similarities” between DIFFERIN and DIFFERIN XP are legally irrelevant and not supported by the record. Galderma was granted leave to adduce additional expert evidence as to why some products, such as DIFFERIN and DIFFERIN XP, have a shared product monograph.
The redetermination was heard by the same Panel that decided the Initial Hearing. The Panel described the question before it in the following way:
“The question the Board must answer is whether the invention of the [Patent] pertains to DIFFERIN, taking into account the directions provided by the Federal Court of Appeal, the totality of the evidence before the Board, and the Board’s consumer protection mandate.”
The Panel held that the word “pertains” in section 79 of the Act “invites a broad construction” and an “intention to express a looser association than conveyed by other more restrictive expressions, such as ‘comprising a medicine’”. The Panel found that the “question of whether the invention of a patent pertains to a medicine is fact-specific”. The Panel relied on the collective effect of four specific “clinical similarities” in determining that DIFFERIN and DIFFERIN XP were the same medicine, albeit in different concentrations, and that Staff had demonstrated that the invention of the Patent pertains to DIFFERIN (“Redetermination Decision”).
Judicial Review #2 – Arguments
In August 2020, Galderma filed an application for judicial review of the Redetermination Decision and argued, inter alia:
- the “Redetermination Decision was unconstitutional because it purported to give the Board jurisdiction over a medicine that was admitted to be ‘off-patent’”.
- the “Redetermination Decision offended principles of procedural fairness and natural justice because Staff did not allege in its pleadings that DIFFERIN and DIFFERIN XP were the same medicine or that similarities between the two medicines mentioned in the Shared Product Monograph were in any way determinative or relevant to whether the invention of the Patent was ‘intended or capable of being used for’ DIFFERIN”.
- the Panel “relied on selective quotes from the Shared Product Monograph that no fact or expert witness had ever addressed”; and
- the Panel relied on an invalid “consumer protection” foundation to establish the Board’s jurisdiction.
Staff argued in response that the Board reasonably compared the clinical similarities of DIFFERIN and DIFFERIN XP, as directed by the FCA, and reasonably relied on the Shared Product Monograph. It also asserted that the issue of procedural fairness raised by Galderma must fail because it is improper on a judicial review to raise new arguments.
Judicial Review #2 – Decision (2024 FC 46)
On January 11, 2024, the Federal Court (per Fothergill J.) affirmed the Redetermination Decision and dismissed the judicial review application, with costs.
The Court rejected the allegations of procedural unfairness because Galderma did not raise those grounds at the earliest possible opportunity. The Court did not comment on whether Staff violated the PMPRB Rules of Practice and Procedure and its common law duties by failing to plead the material facts on which it intended to rely.
The Court upheld that the Board’s decision on the merits because the clinical similarities between DIFFERIN and DIFFERIN XP and the shared product monograph established the metaphorical “rational connection” between the patented invention and the medicine. The Court did not refer to any evidence in the record that allowed the Board to conclude that the invention of the Patent (0.3% adapalene) is used or could be used to make the medicine at issue (DIFFERIN 0.1% adapalene), as required by the Act.
Finally, the Court upheld the Board’s conclusion that “Differin and Differin XP are the same medicine, albeit in different concentrations” as being reasonably supported by the evidence. The Court did not explain how this finding could be sustained, given the FCA’s finding that the medicine at issue was DIFFERIN (0.1% adapalene) and not adapalene, per se.
Galderma has an automatic right of appeal to the Federal Court of Appeal.