IN THE MATTER OF the Patent Act, R.S.C. 1985, c. P-4, as amended AND IN THE MATTER OF Sanofi-Synthelabo Canada Inc., (the “Respondent”) and the medicine “Fasturtec”

STATEMENT OF ALLEGATIONS OF BOARD STAFF

INTRODUCTION

1. This Statement of Allegations results from an investigation by Board Staff into the price of Fasturtec (rasburicase) 1.5 mg vial (DIN 02248416), a patented medicine sold in Canada by Sanofi-Synthelabo Canada Inc. (“Sanofi”).

THE MEDICINE

2. Fasturtec is a medicine indicated for the treatment and prophylaxis of hyperuricemia in paediatric and adult cancer patients, and is administered intravenously. (Attachment 1) It is a new active substance (also referred to as a new chemical entity) and its ATC classification is V03AF07.

3. Sanofi began selling Fasturtec (previously known as Elitek) in Canada under Health Canada's Special Access Program (“SAP”) on May 21, 2002.

4. Health Canada issued a Notice of Compliance for Fasturtec on October 29, 2003. (Attachment 2) Fasturtec continues to be sold under SAP at present.

THE PATENTEE

5. Canadian Patents 2,035,900 and 2,148,537 pertain to Fasturtec. (Attachments 3 and 4) These patents were granted to Sanofi on January 11, 2000 and July 16, 2002 and will expire on July 13, 2010 and May 3, 2015 respectively.

6. In accordance with the Patented Medicines Regulations, 1994 (“the Regulations”), Sanofi filed price and sales information for the May to June 2002 filing period in July 2002. During this introductory period, Sanofi was selling Fasturtec at a price of $200 per vial.

7. By letters dated October 22, 2002 and October 31, 2002, Sanofi advised Board Staff that the $200 price was charged to customers in error and that the price had subsequently been adjusted to $295 per vial. (Attachment 5)

8. By letter dated February 7, 2003, Board Staff advised Sanofi that an investigation was commenced into the introductory price of Fasturtec 1.5 mg/vial based on the introductory price and sales data provided by Sanofi. Board Staff further advised that although the price review had not been completed, the price of Fasturtec appeared to have triggered the investigation criteria based on the International Price Test as it exceeded the prices of Fasturtec in the countries in which it was sold. Board Staff was to continue its review and determine the maximum non-excessive (MNE) price for Fasturtec. (Attachment 6)

9. Section 7.1 of the Patented Medicine Prices Review Board's Excessive Price Guidelines (“the Guidelines”) provides that:

“The price of a new or existing patented drug product will be presumed to be excessive if it exceeds the prices of the same medicine sold in all countries listed in the Regulations. These prices will be determined using the International Price Comparison Test described in Schedule 3.”

10. Following the procedures outlined in the PMPRB's Guidelines for new medicines, Board Staff referred the medicine Fasturtec to the Human Drug Advisory Panel (“HDAP”) for its review which occurred on March 17, 2003. No submission had yet been made by the Patentee. The HDAP was asked for its recommendation as to categorization and the appropriate comparable medicines and comparable dosage regimen for the comparable medicines.

APPLICATION OF GUIDELINES

Category

11. The Guidelines provide the following guidance with respect to determining categorization for a new active substance:

3.1 A Category 1 drug product is a new DIN of an existing dosage form of an existing medicine, or a new DIN of another dosage form of the medicine that is comparable to the existing dosage form as per Schedule 7.

3.2 A Category 2 drug product is one that provides a breakthrough or substantial improvement. It is a new DIN of a non-comparable dosage form of an existing medicine or the first DIN of a new chemical entity.

3.3 A Category 3 drug product is a new DIN of a non-comparable dosage form of an existing medicine or the first DIN of a new chemical entity. These DINs provide moderate, little or no therapeutic advantage over comparable medicines. This group includes those new drug products that are not included in Category 2 above.

12. Based on its review of Fasturtec, the HDAP recommended in its report dated March 17, 2003 that Fasturtec be classified as a category 3 new medicine. (Attachment 7)

Comparable Medicines & Dosage Regimens

13. With respect to selection of comparable medicines, the Guidelines provide as follows:

9.1 Comparable drug products are selected by identifying both comparable medicines and comparable dosage forms.

9.2 Comparable medicines are clinically equivalent in addressing the approved indication that is anticipated to be the primary use of the new drug product under review. The PMPRB refers to the World Health Organization (WHO) Drug Utilization Research Group's Anatomical Therapeutic Chemical Classification System (ATC) as the starting point for the selection of comparable medicines.

9.3 Comparable medicines will typically be those identified under the ATC classification system at the sub-class level above the single chemical substance. This will normally be the fourth sub-class level. If the appropriate comparable medicines are not identified at this level, then the PMPRB may choose from the next higher sub-class or another sub-class. In some instances, it may be appropriate to select from the fifth or single chemical substance level. Selection criteria will include the indication and therapeutic use, and could include other factors such as mode of action, spectrum of activity or chemical family.

9.4 The PMPRB may omit from the comparison a chemical substance or a drug product of the same ATC therapeutic class as the drug product under review if, in the panels' or staff's opinion, it is not clinically equivalent or is unsuitable for comparison. For example, drug products with primary uses other than to address the indication anticipated to be the primary use of the drug product under review may be omitted from the comparison. Similarly, the PMPRB may choose to add products from other ATC classes if they are clinically equivalent for the appropriate indication to the drug product under review.

14. In light of the scientific information available to the HDAP at the time of its review, the HDAP further recommended that there were no appropriate comparators for purposes of conducting a Therapeutic Class Comparison (“TCC”) under the Guidelines.

THE MAXIMUM NON-EXCESSIVE PRICE

15. The Guidelines set out the appropriate price test for a category 3 new drug product as follows:

8.5 In addition to the Guideline applicable to all patented drug products detailed in Section 7, the introductory price of a Category 3 new drug product will be presumed to be excessive if it exceeds the prices of all of the comparable drug products based on a Therapeutic Class Comparison Test (Schedule 2).

8.6 When it is inappropriate or impossible to conduct a Therapeutic Class Comparison Test, Board Staff will give primary weight to the median of the international prices identified in an International Price Comparison Test (Schedule 3) to determine if the introductory price of the new DIN is excessive.

16. Based on the HDAP's recommendation that there are no appropriate comparators for Fasturtec, Board Staff applied the median International Price Comparison (“IPC”) Test to determine the maximum non-excessive (“MNE”) price of Fasturtec. At the time Fasturtec was introduced in Canada, it was sold in three of the seven comparator countries (Germany, Sweden and the U.K.)

17. Subsection 2.4 of the Guidelines (Schedule 3 - International Price Comparison) provides that:

“When the International Price Comparison is being conducted to determine the median price, an interim median international price will be used in cases when the medicine is sold in fewer than five countries at the time of its introduction. Unless it is excessive, the introductory price will be treated as the interim benchmark price. The interim benchmark price may be reviewed at the end of three years or when the medicine is sold in at least five countries, whichever comes first.”

At the time Fasturtec was introduced in Canada, the interim median of the international prices for Fasturtec based on Germany, Sweden and the U.K. was initially calculated to be approximately $92 per vial. (Attachment 8)

18. By letter dated May 6, 2003, Board Staff advised Sanofi that the introductory price of $200 per vial exceeded the MNE price of approximately $92 by more than 116%, and that its price of $295 per vial for the July-December 2002 reporting period exceeded the Guidelines by almost 220%. (Attachment 9)

19. By letters dated June 5, 2003 and August 21, 2003, Sanofi responded to Board Staff's review of the introductory price of Fasturtec taking the position that the price of Fasturtec was not “excessive” and that the application of the median IPC test is not appropriate. (Attachments 10 and 11)

20. Following its review of Sanofi's submissions, Board Staff advised Sanofi by letter dated March 11, 2004 that it concluded its investigation. (Attachment 12) As Fasturtec had now been introduced in all seven comparator countries, the interim benchmark price of $92 per vial was reviewed and the MNE price of Fasturtec in 2002 was calculated to be $119 per vial. (Attachment 13) The $295 price per vial exceeded the Guidelines by close to 150% in 2002. In 2003, the price exceeded the CPI-adjusted MNE price by over 140%. For the period May 2002 to December 2003, Board Staff has estimated that Sanofi accumulated excessive revenues of approximately $375,000 from the sale of Fasturtec.

POLICY OF EXCESSIVE PRICING

21. Subsection 83(4) of the Patent Act provides that:

“Where the Board, having regard to the extent and duration of the sales of the medicine at an excessive price, is of the opinion that the patentee or former patentee has engaged in a policy of selling the medicine at an excessive price the Board may, by order, in lieu of any order it may make under subsection (2) or (3), as the case may be, direct the patentee or former patentee to do any one or more of the things referred to in that subsection as will in the Board's opinion offset not more than twice the amount of the excess revenues estimated by it to have been derived by the patentee or the former patentee from the sale of the medicine at an excessive price.

22. It is the position of Board Staff that Sanofi has engaged in a policy of selling the medicine at an excessive price. Sanofi has been selling Fasturtec since its introduction in Canada in May 2002 at a price per vial which Sanofi knew or ought to have known exceeded the PMPRB's Guidelines. To date, Sanofi has failed to lower the price of Fasturtec to comply with the Board's Guidelines.

OTHER

23. Board Staff reserves the right to make such other allegations and submission and introduce other additional documents as Board Staff may advise and the Board may permit.

24. Pursuant to section 86 of the Patent Act, a hearing shall be held in public unless the Board orders otherwise. Board Staff submits that any hearing conducted by the Board into the price of Fasturtec should be held in public and, subject to orders of the Board, all information and documents filed should form part of the public record.

ORDER REQUESTED

25. It is respectfully submitted that there are grounds for the Board to conclude pursuant to section 83 of the Patent Act that Sanofi is selling or has sold the medicine known as Fasturtec in any market in Canada at a price which is or was excessive and that Sanofi further engaged in a policy of selling Fasturtec at an excessive price.

26. Board Staff seeks the issuance of an Order as against Sanofi, the terms of which would be as follows:

a) The maximum non-excessive prices of Fasturtec in Canada for the period May 21, 2002 to December 31, 2004 inclusive shall be the prices set out in Attachment 14.

b) The maximum non-excessive price of Fasturtec in Canada in future years shall be calculated in accordance with Schedule 4 of the Guidelines;

c) In accordance with subsection 83(1) of the Act, Sanofi shall cause the maximum price at which it sells Fasturtec in Canada to be reduced to the maximum non-excessive price effective on or before 30 days from the date of the Board's Order;

d) In accordance with subsection 83(4) of the Act, and in lieu of an order under subsection 83(2), Sanofi shall offset twice the amount of excess revenues estimated to have been derived by Sanofi from the sale of Fasturtec at an excessive price from May 21, 2002 until the date on which the price reduction referred to in paragraph c) above comes into effect:

i) With respect to the period from May 21, 2002 to December 30, 2003, Sanofi shall pay to Her Majesty in right of Canada, within 30 days of the date of the Board's Order, an amount equal to twice the amount set out in Attachment 14; and

ii) With respect to the period from January 1, 2004 to the date on which the price reduction referred to in paragraph b) comes into effect, Sanofi shall pay to Her Majesty in right of Canada, a further amount equal to twice the amount of the excess revenues estimated by the Board to have been derived by the Respondent from the sale of Fasturtec at an excessive price; and make the payment within 30 days of receipt of a notification from the Board of its estimate of excess revenues based on the information filed in response to paragraph e) below;

e) Sanofi shall, within 60 days of the date of the Board's Order:

i) Notify federal/provincial/territorial ministers of health or their representatives and all customers of the price decrease as required by the Board's Order (a copy of which shall be included in such notifications) and the effective date of such price decreases;

ii) Submit copies of the above-noted notifications and any other notice to the Board; and

iii) Provide to the Board information concerning the quantity of Fasturtec sold and either the average price per package or the net revenue from sales of Fasturtec in Canada, in the same form as required by subsection 4(1) of the Patented Medicines Regulations, 1994 for the period January 1, 2004 to the date on which the price reduction referred to in paragraph c) comes into effect.

Dated at Ottawa this 7th day of May 2004.

Johnston & Buchan, LLP

275 Slater Street, Suite 1700

Ottawa, Ontario

K1P 5H9

Tel.: (613) 236-3882

Fax: (613) 230-6423

David Wilson

E-mail: wilson@johnstonbuchan.com

Lynn Starchuk

E-mail: starchuk@johnstonbuchan.com

Counsel to Board Staff

LIST OF ATTACHMENTS

• Attachment 1: Product Monograph for Elitek/Fasturtec dated Oct. 29, 2003 .
• Attachment 2: Notices of Compliance - Biologics and Radiopharmaceuticals
• for Human Use, Jan. 1 - Dec. 26, 2003 .
• Attachment 3: Canadian Patent No. 2,035,900, granted Jan. 11, 2000.
• Attachment 4: Canadian Patent No. 2,148,537 granted July 16, 2002.
• Attachment 5: Letters dated October 22, 2002 and October 31, 2002 from
• Sanofi to Board Staff.
• Attachment 6: Letter of investigation dated Feb. 7, 2003 from Board Staff
• to Sanofi.
• Attachment 7: HDAP New Medicine Scientific Review dated Mar. 17, 2003.
• Attachment 8: Block 5 foreign prices and foreign prices derived from publicly-available sources for Fasturtec for the period January to June 2002.
• Attachment 9: Letter dated May 6, 2003 from Board Staff to Sanofi.
• Attachment 10: Letter dated June 5, 2003 from Sanofi to Board Staff.
• Attachment 11: Letter dated Aug. 21, 2003 from Sanofi to Board Staff.
• Attachment 12: Letter dated Mar. 11, 2004 and proposed VCU from Board Staff to Sanofi.
• Attachment 13: Block 5 foreign prices and foreign prices derived from publicly-available sources for Fasturtec for the period July to December 2002.
• Attachment 14: Fasturtec 1.5 mg/vial - Calculation of Excess Revenues.