Federal Court Denies Class Action Certification In Generic Drug Price Fixing Case

The Federal Court has dismissed a request to certify a proposed class proceeding against a large number of generic drug companies named as defendants under sections 45 and 46 of the Competition Act: Eaton v Teva Canada Limited, 2026 FC 239.

The plaintiff alleged a vast, industry-wide conspiracy in North America in which the defendants conspired to allocate the generic drug market and fix prices at the maximum public formulary price in Canada. Proposing a class of persons who purchased generic drugs out-of-pocket or through private drug plans since January 1, 2012, the plaintiff sought $5 billion in damages for the class.

While the existence of an identifiable class was not in dispute, the Court (Fothergill J.) found the plaintiff failed to satisfy the four other criteria for certifying a proceeding as a class action, namely that:

1. the statement of claim discloses reasonable causes of action against the defendants;
2. there are common issues of law or fact;
3. a class proceeding is the preferable procedure for determining the claims of class members; and
4. there is a suitable class representative.

In particular, the Court found that the statement of claim did not plead any particulars of the acts of each alleged co-conspirator. Many of the allegations appeared to have been derived from legal proceedings in the United States, without material facts of how the alleged conspiracy extended into Canada.

The statement of claim also asserted only baldly that all defendants compete with each other. Considering the range of products sold by generic drug manufacturers in Canada and the fact that many defendants market only a small subset of generic drugs, the Court held it could not reasonably be said that defendants "compete with respect to a product" with defendants that do not market similar or interchangeable products.

Further, the plaintiff's evidence did not meet the standard to show "some basis in fact" to support the existence of the alleged conspiracy. None of the documentation from US litigation relied upon by the plaintiff suggested that the conspiracy extended throughout North America or into Canada, and there are important differences between the regulatory frameworks governing the sale of generic drugs in Canada versus in the US.

The Court dismissed the motion to certify the proceeding as a class action, without leave to amend, and dismissed the action with prejudice against some of the defendants.

Should you have any questions, please do not hesitate to contact a member of the Life Sciences Regulatory & Compliance Group or the Pharmaceutical Litigation Group.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.