Five pharmaceutical companies have filed suit in a Canadian court challenging the constitutionality of new Canadian regulations that lower patented drug prices, setting up a fight with the federal government.
The complaint was filed in Quebec’s Superior Court by the Canadian arms of U.S.-based Merck & Co (NYSE:MRK) and Johnson & Johnson’s (NYSE:JNJ) Janssen Inc., Germany’s Bayer AG and Boehringer Ingelheim, and France’s Servier Inc.
The filing ratchets up the tension between the pharmaceutical industry and the Liberal government of Prime Minister Justin Trudeau, which has vowed to make prescription drug affordability a key plank of its federal election campaign.
The new rules being implemented by Ottawa will save patients, employers, insurers and government drug plans money, at the expense of drug company profits in Canada. The regulations give new powers to the Patented Medicine Prices Review Board (PMPRB), which sets maximum drug prices. The new rules were published in an official register on August 21 and are to go into force on July 1, 2020.
All five firms said in separate news releases that, in Canada, the 10 provinces have always had the authority to regulate the prices of medicines, not the federal government. Drug makers have argued that lower prices will delay drug launches, reduce investment in life sciences and drive new drug trials out of the country
