The Québec Court of Appeal released its much anticipated decision in Pharmascience Inc. v. Option Consommateurs et. al. In a unanimous judgment, the judges dismissed an attack on the provisions governing the authorization of all class actions in Québec. The Court of Appeal noted that this was an exceptional case and that the public interest required a timely decision as dozens of class action cases had been suspended pending the Court's ruling.  
 
The Court of Appeal also held that the Québec Superior Court had jurisdiction to hear the authorization of a proposed class action lawsuit instituted on behalf of every Québec resident. The proposed $3.9 billion suit against nine manufacturers of generic medications alleges that the manufacturers would have provided "illegal" rebates and other benefits to pharmacists and would have allegedly failed to deduct the "value" of these rebates and benefits from the prices of medications consumers are required to pay under  Québec's publicly administered drug insurance plan. 

The provisions of the Code of Civil Procedure, in effect as of January 1, 2003, provide that a person who seeks the authorization of a judge of the Superior Court to institute a class action is no longer required to file any sworn statement or affidavit in support of their motion for authorization. The Court of Appeal noted that the requirement of an affidavit was removed in order to accelerate and simplify the authorization of class actions. It further noted that, despite Pharmascience's arguments, this did not fundamentally change the class action regime nor the role of the authorizing judge, who must still determine whether the facts alleged by the petitioner in the motion for authorization "appear to justify the conclusions sought" and who still has the discretion to allow appropriate evidence. It also held that at the stage of authorization of a class action, the respondents did not lose any of their rights. 

In the second part of the decision, pertaining to the challenge to the Superior Court's jurisdiction to hear the proposed class action against the nine generic drug manufacturers, the Court held that the Superior Court could entertain this proposed action, despite noting that this was a highly complex matter and that the class action petitioners may have difficulties in proving their claims. Pharmascience claimed that the Superior Court was being asked to make decisions that could only be made by the Minister of Health and Social Services - namely what price Québecers should pay for medications under the public drug insurance plan. The Court of Appeal ruled that the Superior Court is not being asked to rule on the price of drugs, but rather to determine whether "illegal" rebates were given and if so, what was the value of these rebates. 

Pharmascience intends to seek leave to appeal from the Supreme Court of Canada. 

Please do not hesitate to call Nick Rodrigo (514-841-6548) or David Stolow (514-841-6567) if you would like further information on this case or to obtain a complete copy of the decision. 

Davies Ward Phillips & Vineberg LLP, with over 225 lawyers, practises nationally and internationally from offices in Toronto, Montréal, New York and an affiliate in Paris, and is consistently at the heart of the largest and most complex commercial and financial matters on behalf of its North American and overseas clients. 

The information and comments herein are for the general information of the reader and are not intended as advice or opinions to be relied upon in relation to any particular circumstance. For particular applications of the law to specific situations, the reader should seek professional advice.