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Court backs firm’s defence of $700K drug

Regulator overstepped on world’s costliest prescription

Tom blackwell

It was known as the world’s most expensive prescription drug and quickly became a poster child for what some critics considered a greedy pharmaceutical industry.

Canada’s drug-cost regulator took rare action in response, ruling that Soliris, a medicine for rare blood disorders that cost as much as $700,000 per year, was excessively priced.

It ordered manufacturer Alexion Pharmaceuticals to pay back surplus revenue over eight years.

But the firm challenged that edict and has just won a key legal victory in defence of Soliris’s steep price tag.

In a scathing new judgment, the Federal Court of Appeal overturned the Patented Medicines Price Review Board (PMPRB) decision, saying the agency failed to adhere to its governing legislation, used an “unprecedented” test for determining if Soliris cost too much and barely explained its unique conclusions.

And in a strong statement about what the board can and cannot do under the law, the court stressed that the agency is mandated to decide only if a drug price is excessive — if it abuses its patent monopoly, in other words — not whether it’s unreasonable.

The board lacks the power to generally regulate prices or carry out consumer protection at large, said the ruling.

“It is true that Soliris is a very expensive medicine and has a potentially large impact on health care budgets,” wrote Court of Appeal Justice David Stratas. “Many medicines that take decades to develop, like Soliris, for ultra-rare conditions such as the condition Soliris treats, are very expensive. But absent some sort of reasoned explanation (if one is available), this says nothing about whether the price is ‘excessive.’”

The court ordered the matter returned to the board for a new ruling that followed its decision.

The PMPRB could not be reached for comment, but Alexion said it was pleased with the judgment. “We continue to believe Soliris is and has been priced appropriately and in compliance with Canadian law,” said spokeswoman Lisa Taylor.

Aiden Hollis, a University of Calgary economics professor and drug-pricing expert, said he was taken aback by the strongly worded ruling, saying the board had seemed to have solid arguments.

“What it says is that the PMPRB now has to go back to scratch, back to basics, thinking about how it’s going to bring cases,” he said. “This strikes at its reputation. You can’t continuously lose court cases.”

That said, the board has a difficult task, as Canadian provinces and other countries are increasingly negotiating secret cost reductions with pharmaceutical firms, meaning the public list price is of limited relevance, said Hollis. In fact, the board’s oversight role matters little to the provinces because of the deals they strike, he said. It mainly helps private, workplace drug plans that wield less leverage.

Soliris was originally approved to treat two blood disorders affecting about 180 Canadians — paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome (AHUS) — with the list price in Canada for a year of treatment ranging from $500,000 to $700,000.

The Patent Act allows the price-review board to find that a drug’s price is “excessive,” and to require the maker to pay back revenue above a cap it sets. When it took aim at Soliris in 2015, it was the first time it had done so with any medicine in three years.

The board provided little rationale for its unprecedented step, said the court, calling its reasons “thin and impoverished.”

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2021-08-04T07:00:00.0000000Z

2021-08-04T07:00:00.0000000Z

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