The Supreme Court of Canada has released today its judgment in the case of Option Consommateurs v. Novopharm et al dismissing, with costs, Option Consommateurs' application for leave to appeal from the decision of the Québec Court of Appeal (the "QCA") which had refused to authorize a proposed $3.9 billion class action instituted on behalf of all Quebecers against nine generic drug manufacturers.
Davies, with a team made up of Guy Du Pont, Nick Rodrigo and David Stolow, successfully represented Pharmascience Inc. in these proceedings at all levels of court.
The case dates back to February 2003 when a newspaper article appeared in La Presse reporting that certain unnamed generic pharmaceutical manufacturers would have given "illegal" rebates and other benefits to pharmacists in Québec and other provinces. Two days later, based on this newspaper article, a proposed class action was launched. The action sought $3.9 billion in damages against nine generic drug manufacturers on the grounds that these manufacturers would have allegedly failed to deduct the "value" of these rebates and other "benefits" from the prices of medications that all Quebecers would have paid under either Québec's publicly administered drug insurance plan or under private insurance plans.
By judgment of January 17, 2006, the Québec Superior Court (the "QSC") refused to allow the proposed class action to proceed. The QSC held that although the 2003 amendments to Québec's class action authorization regime had simplified the criteria for authorization to a minimum, a motion seeking authorization of a class action had to at least contain some factual foundation for the court to appreciate the seriousness of the proposed action. The QSC held that in this case, this information was simply lacking ("faisait cruellement défaut") and that there was no basis for the Court to find that there was any appearance of fault, damages, or a causal link that would have triggered the liability of the manufacturers. The QSC held that the proposed action, which had been amended on numerous occasions, was a "moving target" that lacked a factual foundation and that the Court was simply not prepared to conclude that this was a serious case based on "pure speculations" drawn from a newspaper article.
By its judgment of June 11, 2008, the QCA agreed with the QSC's holding that there was no causal link between the alleged fault (i.e. the alleged payment of rebates to pharmacists) and the alleged prejudice suffered by Quebecers (i.e. the alleged higher prices for medications). The QCA also found that the claims that Quebecers paid higher contributions as a result of the alleged actions of the generic drug manufacturers was hypothetical, purely speculative and had not been established. The QCA held, in obiter, that the two proposed designated representatives of the class, who had only purchased medications from four of the generic manufacturers in question, had failed to establish that they were adequate representatives for the entire class. Finally, the QCA reiterated that the QSC exercises discretion in determining whether the criteria for authorization are met and that Option Consommateurs failed to establish that the trial judge had incorrectly exercised this discretion.
Today's judgment of the Supreme Court of Canada denying leave to appeal to Option Consommateurs marks the end of this case. As is generally the case when the Supreme Court denies or grants leave to appeal, no reasons are given.
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