Quebec Court of Appeal confirms CPA does not apply to the sale of prescription drugs

By Dominic Dupoy on May 15, 2019 Posted in Life sciences and healthcare, Pharmaceuticals and life sciences

In a May 8 decision, the Quebec Court of Appeal confirmed that the Quebec Consumer Protection Act (CPA) does not apply to the sale of prescription drugs. The decision, Brousseau v Laboratoires Abbott limitée, 2019 QCCA 801 provides critical guidance on the liability regime in Quebec for manufacturers of pharmaceutical products facing product liability claims.

A French version of this post follows.

Relevant facts

Abbott Laboratories manufactured a drug commercialized under the name Biaxin®. Abbott was named as a defendant in a class action where the plaintiff alleged the use of the drug causes side effects that had not been disclosed to users. The class action was based on Civil Code of Quebec (CCQ) provisions outlining the manufacturer’s liability regime relating to security defects, but also on section 53 of the CPA, which allows a consumer to commence an action in damages directly against the manufacturer of a good affected with a security defect. It is important to note that the means of defense that can be raised to oppose an action based on section 53 CPA are more limited than under the CCQ since the manufacturer is not allowed to claim that the state of scientific knowledge made it impossible to know of the defect.

The decision of the Court of Appeal

The Court of Appeal decision analyzes a number of important issues that are relevant in the context of a class action based on an alleged breach of the duty to warn imposed on drug manufacturers. As a result of that analysis, the court dismissed the action and held that Abbott had adequately disclosed the risks associated with the use of the product.

As it relates to the CPA claim, the court dismissed the action on the grounds that the CPA provisions were simply not applicable to the sale of prescription drugs. According to the court, a pharmacist who sells prescription drugs does not act as a merchant within the meaning of the CPA, but rather acts as a health professional. As a result, the sale by a pharmacist of prescription drugs does not lead to a contract between a consumer and a merchant and therefore the CPA does not apply.

In support of its conclusion, the court also noted that the CPA’s bar on a manufacturer raising a defense based on the state of science (as is available under the second paragraph of section 1473 CCQ) is difficult to reconcile with the specificities of drug development. The court held the Quebec legislature could not have intended to impose an absolute presumption of knowledge on drug manufacturers of all risks and dangers that could materialize after the drug enters the market.

It is also to be noted the Court of Appeal confirms the applicability of the learned intermediary doctrine in the context of Quebec civil law. Although many decisions from lower courts had applied this theory in the past, this is the first decision from the Court of Appeal confirming the applicability of the learned intermediary doctrine in Quebec. This doctrine is an important defense available to prescription drug manufacturers to establish they have met their duty to warn.

Key takeaway

As a general statement, the provisions of the CPA impose on manufacturers a liability regime that is more stringent than that provided under the general principles of the CCQ. In addition, the CPA also provides for a potential award of punitive damages in certain circumstances. The Court of Appeal decision confirming that the CPA does not apply to the sale of prescription drugs thus represents an important legal development in the field of manufacturers’ liability for pharmaceutical companies.

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Le 8 mai 2019, la Cour d’appel du Québec a rendu une décision très importante pour les fabricants de produits pharmaceutiques. Dans l’affaire Brousseau c Laboratoires Abbott limitée, 2019 QCCA 801, la Cour d’appel a en effet confirmé que les dispositions de la Loi sur la protection du consommateur (LPC) ne s’appliquaient pas à la vente de médicaments sur ordonnance.

Les faits pertinents

La défenderesse Laboratoires Abbott limitée fabriquait un médicament connu sous le nom de Biaxin^®. Elle faisait face à une action collective en vertu de laquelle la demanderesse alléguait que ce médicament vendu sur ordonnance entraînait des effets secondaires importants qui n’avaient pas été dévoilés aux utilisateurs. L’action collective était fondée sur les dispositions du Code civil du Québec (CCQ) encadrant le régime de responsabilité du fabricant applicable en matière de sécurité des biens, mais également sur l’article 53 LPC, lequel permet à un consommateur ayant contracté avec un commerçant d’exercer directement contre le fabricant un recours fondé sur un vice caché ou un défaut de sécurité. Il est important de mentionner que les moyens de défense à l’encontre d’un recours intenté en vertu de l’article 53 LPC sont plus limités qu’en vertu du CCQ puisque le fabricant ne peut alors alléguer que l’état des connaissances scientifiques ne lui permettait pas d’être au courant du vice ou du défaut.

L’arrêt de la Cour d’appel

L’arrêt rendu par la Cour d’appel est intéressant à plusieurs égards puisqu’il analyse en détails plusieurs questions importantes dans le contexte d’une action collective alléguant le défaut d’information d’un fabricant de produits pharmaceutiques. À la suite de cette analyse, la Cour a rejeté l’action au motif que la défenderesse s’était adéquatement déchargée de son obligation d’information.

Cette décision s’avère toutefois particulièrement intéressante en ce qui concerne l’analyse du recours fondé sur l’article 53 LPC. La Cour d’appel a en effet rejeté ce recours au motif que la LPC était tout simplement inapplicable à la vente de médicaments sur ordonnance. Selon la Cour d’appel, le pharmacien qui vend un médicament sur ordonnance n’agit pas comme un commerçant au sens de la LPC, mais comme un professionnel de la santé. La vente de médicaments sur ordonnance par un pharmacien ne constitue donc pas un contrat de consommation susceptible d’entraîner la responsabilité du fabricant en application de l’article 53 LPC.

Au soutien de sa conclusion, la Cour note que l’absence, sous la LPC, d’un moyen d’exonération basé sur l’état des connaissances scientifiques au moment de la fabrication du bien (comme celui prévu au deuxième alinéa de l’article 1473 CCQ) apparaît peu conciliable avec les particularités du développement d’un médicament. La Cour en vient à la conclusion que le législateur québécois ne pouvait avoir voulu imposer aux fabricants de produits pharmaceutiques une présomption absolue de connaissance de tous les risques et dangers susceptibles de se matérialiser à la suite de la commercialisation d’un médicament.

Il est également à noter que la Cour d’appel confirme l’applicabilité de la doctrine de l’intermédiaire compétent en droit civil québécois. Bien que certaines décisions des tribunaux inférieurs avaient déjà appliqué cette doctrine au Québec, il s’agit du premier arrêt de la Cour d’appel confirmant l’applicabilité de cette doctrine dans la province. Ainsi, les fabricants de médicaments d’ordonnance disposent d’un important moyen de défense afin d’établir qu’ils se sont acquittés de leur obligation de mise en garde.

L’importance de l’arrêt de la Cour d’appel

Les dispositions de la LPC prévoient, d’une manière générale, un régime de responsabilité beaucoup plus strict que celui prévu par les principes généraux de la responsabilité civile. De plus, la LPC prévoit la possibilité pour le tribunal d’imposer au fabricant des dommages punitifs en certaines circonstances. La décision de la Cour d’appel confirmant que la LPC est inapplicable dans le contexte de la vente de médicaments sur ordonnance constitue donc un développement jurisprudentiel important en matière de responsabilité du fabricant.

Federal Court of Appeal affirms cancellation of reconsideration of ANDS for Apo-omeprazole

By Kassandra Shortt and Judith Robinson on May 2, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

The Federal Court of Appeal has dismissed an appeal by Apotex Inc. (Apotex) in its unsuccessful application for judicial review of a decision by the Minister of Health (the Minister) to cancel the reconsideration of approval for Apo-omeprazole.

Background

As we reported, the Minister revoked Apotex’s Notice of Compliance (NOC) for Apo-omeprazole and declined to issue the NOC again in 2013 due to inadequate evidence of bioequivalence in its Abbreviated New Drug Submission. Apotex sought reconsideration of the Minister’s decision by an external expert panel on the basis of safety and efficacy. The Minister took the position that the issue for reconsideration was bioequivalence, and cancelled the reconsideration process when the parties could not agree on the question to put to the panel.

The Federal Court dismissed Apotex’s application for judicial review of the Minister’s decision to cancel the reconsideration process. The Court held that Apotex had no legitimate expectation that the Minister’s discretion would be exercised in its favour. The Court further held that the Minister did not fetter her discretion in requiring the reconsideration process to focus on bioequivalence.

Apotex’s Appeal Dismissed

On appeal, Apotex recast its position to argue that the Minister had no authority to cancel the reconsideration process entirely. Apotex asserted that it had a legitimate expectation that the reconsideration process would continue, despite the continued disagreement regarding the question to be put to the panel.

The Court of Appeal rejected this argument, as it was not raised in Apotex’s Notice of Application and was not properly before the Court. In its Notice of Application, Apotex had not sought relief to compel the Minister to continue the reconsideration process — instead, it focused exclusively on requiring the Minister to frame the question for the panel without regard to bioequivalence.

Based on the Federal Court’s reasons, the Court of Appeal was otherwise satisfied that the question as framed by the Minister was reasonable.

Link to decision: Apotex Inc. v Canada (Health), 2019 FCA 97 aff’g 2017 FC 857

Proposed amendments to Food and Drugs Act introduced in omnibus budget bill

By Ian Trimble and Sara Zborovski on April 23, 2019 Posted in Life sciences and healthcare, Pharmaceuticals and life sciences

The federal government has proposed changes to the Food and Drugs Act (FDA) that would allow the Minister of Health (Minister) to classify products as foods, drugs, cosmetics, devices, or “advanced therapeutic products”; require authorizations to conduct clinical trials; and modify Health Canada’s inspection powers.

These changes are included in an omnibus budget bill, the Budget Implementation Act, 2019, No 1 (Bill C-97). Bill C-97 was introduced and received its first reading in the House of Commons on April 8, 2019. Second reading in the House commenced on April 10, 2019.

Classification of products

The FDA regulates various products including food, drugs, cosmetics, and devices (collectively Regulated Products, each of which is defined in the FDA). The proposed amendments introduce two changes in this regard:

Power to designate classification. If the Minister believes that a thing (or class of things) could be captured under two or more Regulated Product definitions, the Minister would be authorised to order that the thing (or class of things) be designated as a single type of Regulated Product. The effect of such designation is that, for the purposes of the FDA — including the regulatory requirements — it will be considered to be that type of Regulated Product. The proposed amendments also provide factors to be considered in making such a designation.
New class: “advanced therapeutic products”. The proposed amendments create a new class of therapeutic products called “advanced therapeutic products” that will be contained in Schedule “G”. Generally speaking, products in this category will represent an emerging or innovative technological, scientific or medical development. The Minister may designate a thing (or a class of things) as an advanced therapeutic product after considering enumerated factors such as the degree of uncertainty respecting risks and benefits and the extent to which existing legal frameworks are adequate to prevent injury to health. The Minister may also remove these products from Schedule “G” at a later time. Advanced therapeutic products will require authorizations (by license or ministerial order) before they can be imported, sold, manufactured, prepared, preserved, packaged, labelled, stored, or tested.

Clinical Trials

The proposed amendments would prohibit clinical trials for drug, device, or prescribed food for a special dietary purpose unless an authorization has been issued, and the study is conducted in compliance with any terms and conditions imposed by that authorization. The holder of such an authorization must also publish prescribed information about the trial in a prescribed time and manner.

Persons already authorized to import a drug, positron-emitting radiopharmaceutical, natural health product, or Class II–IV medical device for the purpose of a clinical trial as of the date the new provisions come into force will be deemed to hold an authorization in respect of that product for the purpose of the proposed amendments.

Inspection Powers

The proposed amendments would replace the current “powers of inspector” provision. The new provisions provide, in part, that:

An inspector may order a person to provide any document, information or sample to the inspector;
An inspector may enter any place in which they believe on reasonable grounds that regulated activities are occurring, regulated products are located, or activities could be conducted under an authorization for which an application is under consideration. Accessing remotely by telecommunication is considered entering for the purposes of an inspection;
Inspection powers will include examination, copying, removing, testing, taking samples, taking photographs, seizing and detaining; and
A warrant will be required to enter a dwelling-house.

Other provisions

The proposed amendments give powers to the Minister to order persons to take any remedial measures the Minister considers necessary if the Minister has reasonable grounds to believe that person has or will contravene the FDA.

Coming into force

The clinical trials provisions will come into force on a date fixed by order in council. Other provisions will come into force on the date that Bill C-97 comes into force.

Regulatory changes for generics proposed to clarify ANDS pathway eligibility

By Ian Trimble, Christopher A. Guerreiro and Sara Zborovski on April 1, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

On March 30, 2019, the government published proposed amendments to the Food and Drug Regulations (FDR) intended to clarify whether a generic version of a drug can be approved using the abbreviated new drug submission (ANDS) pathway. These amendments affect how the FDR apply to a generic drug product if it contains a different medicinal ingredient than the Canadian reference product (CRP), but the same therapeutically active component. They also include changes to (i) labelling requirements and (ii) data protection eligibility for variations of previously-approved medicinal ingredients.

The proposed amendments follow a consultation on the topic conducted by Health Canada in 2017, and will supersede Health Canada’s 2017 Interim Policy on Health Canada’s Interpretation of Medicinal Ingredient and Assessment of Identical Medicinal Ingredient.

Interested persons have 70 days from the date of publication to make representations concerning the proposed regulations.

Drugs approvable via the ANDS pathway

Currently, a generic drug product must contain the identical medicinal ingredient to the CRP in order to be considered pharmaceutically equivalent and assessed via the ANDS pathway. The proposed amendments would change the test to require that the generic and the CRP share an identical “therapeutically active component”.

The “therapeutically active component” is defined for all new drugs as the medicinal ingredient, excluding those appended portions, if any, that cause the medicinal ingredient to be a salt, hydrate or solvate. The proposed amendments also clarify that the “medicinal ingredient” of a new drug refers to the ingredient as it exists in dosage form (rather than the input ingredient used in the manufacture of the dosage form), as determined by the Minister.

The proposed amendments would thus allow for generic drug products with the following differences in the medicinal ingredient to be assessed via the ANDS pathway, provided they have the same therapeutically active component as the CRP:

different hydrated or solvated forms,
different polymorphic forms, and
different salt forms.

If Health Canada has reasonable grounds to believe there is a difference between generic and CRP, the proposed amendments permit it to request information from the generic manufacturer to demonstrate that the difference in safety and effectiveness, if any, is inconsequential.

According to the Regulatory Impact Analysis Statement (RIAS) accompanying the proposed amendments, complexes, clathrates, esters, and isomers or mixtures with different proportions of isomers would not be eligible to be assessed via the ANDS pathway.

Biologic drugs are specifically excluded from the ANDS pathway by the amendments. The RIAS notes that there is no change to how generic radiopharmaceuticals are approved.

Labelling

The proposed amendments introduce changes to labelling requirements for all drugs, based on the newly-defined therapeutically active component and the revised definition of medicinal ingredient discussed above. If the therapeutically active component and the medicinal ingredient of a drug are not the same, both the name of the medicinal ingredient and the name and amount of therapeutically active components of the drug must appear on the label.

Data Protection

The proposed amendments alter the data protection provisions in the FDR in order to provide additional detail regarding the “variations” of a medicinal ingredient that are excluded from eligibility. These changes are intended to make the description of a “variation” consistent with the terminology used to describe medicinal ingredients in relation to a “therapeutically active component”.

The existing definition of “innovative drug” excludes a “variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph”. The proposed amendments provide that variations will be excluded and define variation to mean:

(a) an enantiomer or a mixture of enantiomers;

(b) a polymorph;

(c) a medicinal ingredient that, when compared to a previously approved medicinal ingredient, is identical, excluding those appended portions, if any, that cause either medicinal ingredient to be a salt, ester, hydrate, or solvate; or

(d) any combination of the variations found in paragraphs (a) to (c).

Coming-into-force & transition

The regulations will come into force 90 days after they are registered. The proposed amendments would not apply to drugs where the submission was filed before the coming-into-force date.

Federal Court grants application under the old PM(NOC) Regulations for a prohibition order regarding a metformin formulation

By Paul Jorgensen, Christopher A. Guerreiro and Jordana Sanft on March 25, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

On March 8, 2019, the Federal Court issued a prohibition order against a generic version of GLUMETZA^® (metformin hydrochloride extended-release tablets) proposed by Generic Partners Canada Inc. (Generic Partners) in an application under the pre-CETA Patented Medicines (Notice of Compliance) Regulations. GLUMETZA^® is marketed in Canada by Valeant Canada LP/Valeant Canada SEC (Valeant), which asserted Canadian Patent No. 2,412,671 (671 Patent) against Generic Partners in the proceeding.

671 Patent and its Claims

The 671 Patent relates to oral water-swellable oral dosage forms for drugs (e.g., metformin) that may benefit from a prolonged period of controlled release in the stomach and upper gastrointestinal tract. In particular, the 671 Patent specifies particular shapes and sizes of dosage form that are said to reduce or eliminate the proportion of dosage forms that escape from the stomach through the pylorus, while remaining easily swallowed.

Justice Fothergill accepted Valeant’s construction of Claim 1 of the 671 Patent. Claim 1 is to a controlled-release, gastric-retentive oral dosage form with the parameters of three essential features specified: a Size Element, a Time Element, and a Shape Element. It was unnecessary to construe any of the other claims in order to dispose of the application.

Allegations of invalidity not justified

Anticipation/Gillette Defence. Generic Partners alleged that the 671 Patent was anticipated by PCT Patent Application WO 98/55107 (WO 107). WO 107 also discloses swellable dosage forms that enhance gastric retention, shares a common inventor with the 671 Patent, and is cited in the description of the 671 Patent. The Court found that while the Size and Time Elements claimed in the 671 Patent were arguably disclosed implicitly by WO 107 in the light of the common general knowledge, the Shape Element could not be ascertained by reading WO 107. Therefore, Claim 1 of the 671 Patent was not anticipated and the Gillette Defence must fail.
Obviousness. The Court also rejected the obviousness allegations against the 671 Patent, finding that while the Size and Time Elements may have been disclosed by the prior art (which included WO 107), the Shape Element and the combination of all three elements were not. Without the insight that dosage shapes would affect gastric retention, the invention could not have been obvious to try.
Double-patenting. Generic Partners alleged double-patenting over Canadian Patent No. 2,290,624 (the 624 Patent), the basis for which was WO 107. The Court relied on its anticipation and obviousness findings about WO 107/the 624 Patent to reject the double-patenting allegation against the 671 Patent.
Insufficiency. Generic Partners challenged the 671 Patent on the basis that it does not provide sufficient information to allow the skilled person to know, in advance of testing, if the formulations disclosed will actually enhance gastric retention. The Court accepted Valeant’s evidence that dosage forms falling within the claims could be made using standard dies and punches, and that any additional testing required would be routine or trivial. Although the expert put forward by Generic Partners alleged that the 671 Patent lacked data and examples, the Court found rejected this attack on the bases that it is not necessary for an inventor to provide a theory of why the invention works and no allegation of inutility had been made.

Link to decision: Valeant Canada LP/Valeant Canada SEC v. Generic Partners Canada Inc. et al., 2019 FC 253

Health Canada publishes new amendments to the Food and Drug Regulations and Medical Devices Regulations allowing for public release of clinical information in regulatory submissions

By Morgan Westgate, Daniel Daniele and Kristin Wall on March 25, 2019 Posted in Life sciences and healthcare, Pharmaceuticals and life sciences

On March 20, 2019, new amendments to both the Food and Drug Regulations (the Regulations) and the Medical Devices Regulations regarding the disclosure of clinical data were published in the Canada Gazette. These changes follow from the May 2017 release of Health Canada’s white paper – Public Release of Clinical Information in Drug Submissions and Medical Device Applications (which we have previously reported on here and here), and confirm Health Canada’s decision to allow certain clinical study information from regulatory submissions to be made publicly available following a final regulatory decision.

The amendments came into force on February 28, 2019.

The rationale

Health Canada has justified these amendments on the basis that health professionals and researchers need access to more clinical data in order to be able to perform independent analyses of the evidence underlying published research findings and Health Canada’s regulatory reviews. Without such access, Health Canada is of the view that transparency is limited, which leads to missed opportunities “to promote greater confidence in the oversight of drugs and medical devices”, and does not align with Vanessa’s Law or Health Canada’s “key regulatory partners” such as the European Medicines Agency and the U.S. Food and Drug Administration.

The details of this rationale are provided in the Regulatory Impact Analysis Statement that was released with the new amendments, which can be found in the Canada Gazette (p. 750).

Timing and impact of the amendments on the release of clinical information

Under the Regulations, the new amendments provide that clinical trial information in a drug application “ceases to be confidential business information” upon the issuance of a Notice of Compliance (NOC). Importantly, the amendments further provide that such information also ceases to be confidential business information in circumstances where the Minister of Health (the Minister) notifies a manufacturer that its submission does not comply with the Regulations, and the manufacturer does not amend the submission within the applicable time period.

As soon as clinical trial information is no longer confidential business information under the Regulations, the Minister has the power to disclose, without notice or consent, any information in respect of the clinical trial contained within the related submission. However, these new amendments will only apply to clinical trial information that was used by the manufacturer in the submission to support the proposed conditions of use for the new drug or the purpose for which the new drug is recommended. The amendments also do not apply to clinical trial information that describes tests, methods or assays exclusively used by the manufacturer.

The new transitional provisions specify that clinical trial information contained in a drug submission ceases to be confidential business information on the day on which the amendments to the Regulations came into force, provided that:

the Minister issued an NOC in respect of the submission on a date before the new amendments came into force;
the Minister issued a notice to the manufacturer indicating that the submission was considered to have been withdrawn in circumstances where the manufacturer does not amend its submission to comply with the Regulations, as required on a date before the new amendments came into force; or
the Minister notified the manufacturer that upon the filing of additional information by the manufacturer in respect of its submission, that the submission did not comply with the Regulations on a date before the new amendments came into force.

Where a regulatory submission was filed within 90 days of the day on which the amended Regulations came into force, and the Minister notified the respective manufacturer that the submission did not comply with the Regulations before the day on which the amendments came into force, clinical trial information contained in the submission ceases to be confidential business information on the expiry of whichever of the following periods apply if the manufacturer does not amend the submission within that period:

(a) 90 days after the day on which the Regulations come into force; or

(b) any longer period specified by the Minister.

Similar amendments were made to the Medical Devices Regulations, which specify that clinical trial information associated with medical device applications ceases to be confidential information upon the issuance or amendment of a license by the Minister, or in circumstances where a license or amendment is refused.

Implementation thus far

The changes will apply to all of the types of drug submissions captured by the Regulations: New Drug Submissions, Extraordinary Use New Drug Submissions, Supplemental New Drug Submissions, Supplemental Extraordinary Use New Drug Submissions, Abbreviated New Drug Submissions, Supplemental Abbreviated New Drug Submissions, Abbreviated Extraordinary Use New Drug Submissions, and Supplemental Abbreviated Extraordinary Use New Drug Submissions.

Health Canada has stated that it is establishing a process to anonymize personal information prior to its release under the new Regulations. The clinical information it intends to publicly release includes clinical summaries; clinical overviews and clinical study reports, including protocol and protocol amendments; sample case report forms; and statistical analysis plans. Medical device clinical information includes the summaries, reports, and supporting evidence of safety and effectiveness.

However, as noted above, clinical information will not be released until a final decision has been made to issue an NOC, a Notice of Non-Compliance – withdrawn, or a Notice of Deficiency – withdrawn. Disclosure will also only occur after the time to file additional information has passed and any applicable reconsideration processes have been completed.

Health Canada has also released a Guidance Document on the process for complying with these regulations. Clinical information from past drug submissions and medical device applications that received a final regulatory decision prior to the coming into force of the new amendments may be requested through Health Canada’s Clinical Information Portal, which has been available as of March 13, 2019. Information in submissions and applications that received a final decision after that date but which was not yet subject to proactive publication is also available on request.

Budget 2019: Federal government announces intention to implement recommendations on national pharmacare

By Ian Trimble, Christopher A. Guerreiro and Kristin Wall on March 20, 2019 Posted in Life sciences and healthcare, Pharmaceuticals and life sciences

As we reported the Advisory Council on the Implementation of National Pharmacare recently released an interim report calling for the creation of a national drug agency. Yesterday, the federal government announced funding to implement this recommendation.

Specifically, the government intends to work with partners to implement the following:

Create the Canadian Drug Agency — to provide a coordinated approach on prescription drugs. Budget 2019 proposes to provide Health Canada with $35 million over four years, starting in 2019–20, to establish a Canadian Drug Agency Transition Office to support the development of this agency, which would:
- Assess the effectiveness of new prescription drugs.
- Negotiate drug prices on behalf of Canada’s drug plans.
- Recommend which drugs represent the best value-for-money for Canadians, and in cooperation with provinces, territories and other partners, identify which drugs could form the basis of a future national formulary.
Create a national formulary — a comprehensive, evidence-based list of prescribed drugs, to be developed by the Canadian Drug Agency and create a consistent approach to formulary listing and patient access across the country.
Create a national strategy for high-cost drugs for rare diseases — to improve access to the effective treatments for these diseases.

Further details of the government’s proposal can be found here. A complete copy of the 2019 Budget Plan can be found here.

Competition Bureau publishes Final IP Enforcement Guidelines

By David Yi, Christopher A. Guerreiro and Brian R. Daley on March 18, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

On March 13, the Competition Bureau published a revised version of its IP Enforcement Guidelines (IPEGs). The IPEGs clarify the Bureau’s approach to conducting investigations of alleged anti-competitive activities that involve IP, including settlement of pharmaceutical patent litigation under the Patented Medicines (Notice of Compliance) Regulations (Regulations).

The revised IPEGs replace the earlier 2016 version. Sections 7.2 and 7.3 include a detailed explanation of the Bureau’s approach to litigation settlements under the Regulations, which can be summarized as follows:

Entry-split agreements. An entry-split settlement pursuant to which the generic firm enters the market on or before patent expiry will not pose an issue under the Competition Act where no other consideration is provided to the generic.
Agreements with a payment to a generic. A settlement with a payment to the generic firm pursuant to which the generic firm enters the market on or before patent expiry, may be reviewed under section 90.1 of the Competition Act (anti-competitive agreements or arrangements between competitors), or possibly section 79 (abuse of a dominant position). The Bureau takes a broad view of what constitutes a “payment” which includes for example, the provision of services (e.g., marketing or manufacturing). Any payment would be evaluated to ensure that it is not compensation to the generic firm in return for delaying its own entry into the market, having regard to the fair market value of any goods or services provided by the generic, the magnitude of brand’s section 8 damages exposure under the Regulations, and the brand’s expected remaining litigation costs absent settlement. Notably, “expected remaining litigation costs” may include costs of a subsequent appeal, and potential adverse cost awards.
Potentially criminal agreements. The Bureau will not review a settlement under section 45 (criminal conspiracy) unless (a) the settlement extends beyond the exclusionary potential of the patent by delaying generic entry past the date of patent expiry, (b) the settlement extends beyond the exclusionary potential of the patent by restricting competition for products unrelated to the patent subject to the PMNOC proceeding, or (c) the settlement is a “sham” (e.g., where both parties know the patent is invalid or not infringed). The Bureau expects such circumstances to be rare.

The above suggests that the key considerations in structuring settlement agreements under the Regulations include limiting them to the term of the patent and tying any consideration paid under the agreement to the product and the litigation. However, the IPEGs do not cover all possible settlement scenarios or their potential competition implications. Further, the IPEGs are not a binding expression of the law or how the Commissioner of Competition would exercise discretion in any given case.

In addition to the specific content relating to pharmaceutical patent litigation, the revised IPEGs also address the interface between IP and competition law (including the incentivizing role of property rights and the promotion of a competitive marketplace), the application of the Competition Act to conduct involving IP, and the analytical framework that will be used by the Bureau in the context of IP. In this regard, the IPEGs also include examples on infringement of IP rights, price-fixing, exclusive licensing, exclusive contracts, output royalties, patent-pooling, agreements to foreclose complementary products, refusal to license IP, product switching, conduct involving patent assertion entities (a.k.a. “trolls”), and collaborative standard-setting and standard-essential patents.

Interim Report on Implementation of National Pharmacare calls for creation of a National Drug Agency

By Ian Trimble, Sara Zborovski and Kristin Wall on March 11, 2019 Posted in Life sciences and healthcare

The Advisory Council on the Implementation of National Pharmacare (“Council”) presented an interim report following consultation with Canadians. The report outlines work done to date by the Council, core principles the Council believes should underpin national pharmacare, and initial foundational recommendations.

As we reported, the Council consulted with Canadians on the implementation of a national program to fund prescription drugs. The Council engaged with patients and caregivers, healthcare providers, representatives of Indigenous organizations, government officials, industry, labour, employers, and academics.

The Council reports that feedback indicated that the current system is neither adequate nor sustainable and that very few advocated for the status quo. There was support for ensuring affordability and uniformity in drug coverage, however there was variation in perspectives concerning how national pharmacare should be implemented.

Six core principles for national pharmacare were identified:

Ensuring all Canadians have access to prescription drugs based on medical need, without financial or other barriers to access;
Ensuring coverage is portable and consistent across all jurisdictions;
Providing access to a comprehensive, evidence-based formulary, with special consideration for drugs for rare diseases;
Being designed and delivered in partnership with patients and citizens;
Focusing on a strong partnership between federal, provincial and territorial governments and Indigenous peoples; and,
Including a robust management system that promotes safety, innovation, value-for-money and sustainability of prescription drug costs.

The Council also identified three foundational elements that can be acted on immediately:

Create an arms-length national drug agency in partnership with provinces, territories, and Indigenous peoples that would manage and oversee national pharmacare. Even in the absence of national pharmacare, the Council sees a benefit in consolidating many of the functions currently being undertaken. These include health technology assessments, negotiations with manufacturers, monitoring safety and effectiveness, developing a national formulary and supporting prescribers and others.
Develop a national evidence-based formulary in partnership with provinces and territories, Indigenous peoples, patients/citizens, and clinical and other experts to serve as a baseline for harmonizing coverage across Canada.
Invest in drug data and information technology systems to meet the goals and objectives of national pharmacare. This would cover the entire spectrum of care, from electronic prescribing to real-time claims adjudication to dispensing to post-marketing data collection.

The Council is in the process of completing its recommendations and issuing its final report. The Council will finalize its advice to the Government in the form of a report and blueprint for the implementation of national pharmacare.

Ontario Introduces Legislation to Change Healthcare Administration

By Ian Trimble, Sara Zborovski and Randy Sutton on March 1, 2019 Posted in Life sciences and healthcare

This week the Ontario government announced legislation that will overhaul the administration of healthcare delivery in Ontario.

Bill 74 was introduced in the Ontario Legislature on February 26, 2019, and passed first reading. The bill creates the Connecting Care Act (the “Act”). The province’s 14 existing Local Health Integration Networks (LHINs) and six other agencies such as Cancer Care Ontario and the Trillium Gift of Life Network will be replaced by a single agency known as Ontario Health (the “Agency”).

The Act provides a framework under which healthcare services will be administered in the province. The Agency’s objects include implementing health service strategies developed by the Ministry of Health and Long-Term Care and managing health service needs according to these strategies.

Under the Act, the Minister of Health (the “Minister”) and the Agency will enter into an accountability agreement that sets out the Agency’s goals and objectives, performance standards, targets and measures, reporting requirements, spending plan, and performance management process. The accountability agreement will be posted on the Agency’s website.

The Minister is also given the power to designate persons or entities, or groups of persons or entities as an “integrated care delivery system” (“ICDS”). To be designated an ICDS, the person or group must have the ability to deliver, in an integrated and co-ordinated manner, at least three of the following: hospital services, primary care services, mental health or addiction services, home care or community services, long-term care home services, palliative care services, or other prescribed services.

The Agency is tasked with integrating the health system by providing or changing funding to ICDSs and other health service providers and by negotiating and facilitating integration. Integration is defined for the purposes of the Act as including:

co-ordinating services and interactions between different persons and entities,
partnering with another person or entity in providing services or in operating,
transferring, merging or amalgamating services, operations, persons or entities,
starting or ceasing provision of services, and
ceasing to operate or to dissolving or winding up the operations of a person or entity.

Other highlights of the Act include:

The Agency is given the power to support or provide supply chain management. This could result in a single purchasing entity for business to negotiate with.
The Agency is given inspection powers to inspect any “health service provider,” a defined term that includes operators of various health centers or providers of health services.
The Minister is given considerable powers. For example, the Minister may appoint a supervisor of an ICDS or health service provider who then has the exclusive right to exercise all of the powers of that ICDS or health service provider (and, if owned or operated by a corporation, the powers of that corporation’s board, officers, members, and shareholders). The Minister can also order integration provided certain requirements are met.
The Minister can delegate powers under any act to the Agency except for regulation-making powers.

A clear implementation timeline has not been provided, and the government has indicated implementation will likely take several years.