Life sciences is a highly regulated industry which has seen exponential growth over the last several years of disruption. When a business has the potential to affect health (whether human or veterinary), there is a host of approvals, regulations, and compliance that must be contended with. And now with more eyes than ever focused on the sector, regulatory oversight remains a top priority for companies that operate within it.
Ideally, regulatory challenges will be hurdled smoothly; however, in times when this does not work out as hoped, companies must turn to the courts and administrative law to resolve issues. Two recent decisions of the
Portnov's complaint: How to evaluate regulations?
While Vavilov provided a comprehensive framework for reviewing administrative decisions, it left some uncertainty about the approach for reviewing provincial and federal regulations. In Portnov v. Canada (Attorney General), 2021
The Portnov decision lessens the burden on parties looking to challenge regulations and provides detailed information about how one might do so.
The key question before the Court was how to evaluate
Notably, the Ontario Divisional Court has reached a different conclusion on this issue. In a 2020 decision, it held that Vavilov did not alter the historical approach to reviewing regulations and upheld a provincial regulation enacted in response to the COVID-19 emergency2. Given this split between the federal courts and the
Alexion: PMPRB decision unreasonable under Vavilov
Under section 85 of the Patent Act, the PMPRB may determine whether a medicine is being or has been sold at an excessive price in any market in
These decisions demonstrate how Vavilov has breathed new life into judicial review as a tool to challenge executive action.
Alexion applied for judicial review of the decision. Applying pre-Vavilov law, the Federal Court dismissed the application because it found that the Board's decision was owed significant deference. On appeal, the
The Court concluded that the Board failed to justify its decision under section 85 of the Patent Act. For a decision to be reasonable, the decision-maker must offer a reasoned explanation on the key points before it. Here, the Board misunderstood and failed to explain what it thought its mandate was under section 85. The Board's role under the Patent Act is directed at controlling patent abuse and excessive pricing. The Board in this case viewed its purpose as relating to consumer protection at large and did not grapple with the concept of "excessive pricing" nor indicate that it had to deal with this key issue of legislative interpretation. By failing to examine "in a rigorous way" the purposes of section 85 and the Patent Act as a whole, the Board provided no reasoned explanation of why the price of Solaris was excessive under that section (paragraph 56). The Court therefore found that the decision was not reasonable and had to be undertaken again.
Implications: less deference to federal decision makers?
Although these two decisions address different subjects—regulations and adjudicative tribunal decisions—they demonstrate how Vavilov has breathed new life into judicial review as a tool to challenge executive action. Life sciences companies are heavily regulated at numerous different levels of government. While negotiation with regulators remains a key channel to resolving issues, there are times when a company has little alternative but to challenge a decision in court and argue that the regulator has acted unreasonably. The decisions in Portnov and Alexion provide strong precedents for challenging these types of decisions in the future.
Footnotes
1
2 Hudson's Bay Company ULC v. Ontario (Attorney General), 2020 ONSC 8046.
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