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

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

On March 13, 2019, the Competition Bureau (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. Of particular interest, sections 7.2 and 7.3 include a detailed explanation of the Bureau’s approach to litigation settlements under the Regulations, which can be summarised as follows:

  1. 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.
  2. 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.
  3. 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 incentivising 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

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

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.

Health Canada rejects product-specific suffixes for biosimilars in favour of unique brand names

Health Canada has decided that all biologic drugs, including biosimilars, will be identified by both their unique brand name and non-proprietary (common) name — without the addition of a product-specific suffix. The ability to distinguish between biologics with the same non-proprietary name is important for pharmacovigilance and to minimize inadvertent substitution of drugs that have not been deemed interchangeable.

This policy statement was communicated in a Notice to Stakeholders, which outlines the following steps that Health Canada will take toward implementation:

  • Update guidance documents and proceed with a regulatory amendment to ensure that the current practice of sponsors submitting unique brand names for biologics is adequately supported.
  • Provide stakeholder communications on the importance of recording both brand and non-proprietary names throughout the medication use process (as well as other product-specific identifiers, such as DIN and lot numbers where appropriate) to help ensure product-specific identification and traceability of biologics.
  • Undertake activities to assist pharmacovigilance (e.g., updating reporting forms and associated instructions).

Health Canada’s Notice to Stakeholders was published together with a “What We Heard Report”, which summarised the feedback received during a stakeholder consultation on this topic conducted by Health Canada and the Institute for Safe Medication Practices Canada in early 2018. As we reported, the consultation compared the existing approach (i.e., the optional use of unique brand names or DINs to distinguish between drugs with the same non-proprietary name) to one of two options: either (i) the requirement to always use a unique brand name, which was adopted, or (ii) or the implementation of a four letter suffix for the non-proprietary name of biosimilars, in line with the US approach. Stakeholders were asked to consider the appropriateness and impact of each approach for Canada.

Health Canada’s decision to require the use of unique brand names together with the non-proprietary name is consistent with the preferences of most survey respondents, with 48% of whom indicated it was their preferred response and 27% of whom indicated that it was acceptable.

FCA Confirms Entirety of Inventors’ Conduct is Relevant in Obviousness Analysis and Upholds Inventiveness of Crystal Form Patent

The Federal Court of Appeal (“FCA”) upheld the validity of Canadian Patent 2,436,668 (“668 Patent”) which covers Form I ODV succinate (marketed as PRISTIQ) in two separate appeals by Apotex Inc. (“Apotex”) and Teva Canada Ltd (“Teva”), finding that the claims were novel and inventive.

Obviousness

The FCA began be reiterating key points of the obviousness analysis:

  • The Sanofi test is flexible and expansive and can include consideration of the invention story as a whole;
  • The “obvious to try” test is only one part of the obviousness analysis and does not displace other tests, including the test set out in Beloit Canada Ltd. v. Valmet Oy, (1986), 64 N.R. 287, 8 C.P.R. (3d) 289 (F.C.A.), i.e., whether the skilled person would have come “directly and without difficulty” to the solution taught by the patent;

From this framework, the FCA found that the claims of the 668 Patent were inventive, focusing on the Federal Court’s findings that:

  • None of the crystal forms of ODV succinate had ever been made, disclosed, or characterized;
  • it was impossible to predict whether or how ODV succinate could be made;
  • there was a lack motivation to form ODV succinate because past experiments with ODV fumerate (another salt of ODV) had failed (it had poor bioavailability); and
  • many experiments were required to produce the crystal form.

In both appeals, the FCA rejected arguments that the claims were “obvious to try” in light of Bristol-Myers Squibb Canada Co. v. Teva Canada Limited, 2017 FCA 76 (Atazanavir) and Pfizer Limited v. Ratiopharm Inc., 2010 FCA 204 (Amlodipine), which cases related to salts. The FCA noted that there was evidence in Atazanavir and Amlodipine that the salts in issue had already been shown to offer stability advantages and improved pharmaceutical properties. By contrast, salts of ODV succinate would have not have been expected to work because the ODV fumerate salt had not worked.

In the Apotex appeal, the FCA rejected Apotex’s argument that experiments unrelated to the salt screens for ODV succinate, such as prior experiments with pro-drugs and with ODV fumerate should be excluded from consideration because they were efforts “in other directions”. The FCA disagreed and confirmed that it the entirety of the inventors’ course of conduct could be considered including other directions and approaches taken to solving the problem.

Similarly, the FCA also rejected Apotex’s argument that tests that occurred after the ODV succinate crystal was discovered should not be considered. The FCA found that the crystal form needed to be characterized and the stability of other forms analyzed in order to confirm that the identified crystal was the most stable hydrated form and that these experiments were relevant considerations in the obviousness analysis.

Anticipation

Apotex’s appeal also raised issues of anticipation that were not present in Teva’s appeal. At first instance, Apotex did not lead direct evidence of anticipation but addressed it in its memorandum, relying on evidence from its experts on obviousness. The Federal Court rejected this approach because neither expert was instructed on the law of anticipation, the expert evidence related to obviousness, and a party cannot use information filed in relation to one issue to attack a different issue.

The FCA confirmed that obviousness and anticipation are separate inquiries, but did not directly address the Federal Court’s holding on whether expert evidence on the issue of obviousness could be used to support an anticipation analysis. Instead, it found that Apotex’s evidence was insufficient to prove anticipation so it was irrelevant whether the Federal Court considered it.

*Special thanks to Jamie Parker, an articling student, for his help on this post.

Link: Teva Canada Ltd. v. Pfizer Canada Inc. et al., 2019 FCA 15; Apotex Inc. v. Pfizer Canada Inc. et al., 2019 FCA 16.

Quebec Court of Appeal overturns minister’s decision to remove Remicade from Quebec’s List of Medications

The Quebec Court of Appeal has declared a decision by the Minister of Health and Social Services to “delist” Remicade from Quebec’s List of Medications (Quebec’s equivalent to a formulary) to be invalid and has ordered the minister to reinstate the drug on the list. Two takeaways from this decision: the minister’s decisions to list or delist individual drugs are administrative in nature and not regulatory, and a decision to delist may require the minster to respect certain minimum standards of procedural fairness, which the minister failed to do in this case.

Background

In February 2017, Quebec’s then Minister of Health and Social Services, Dr. Gaétan Barrette, published a notice removing Remicade from the List of Medications and declaring it would no longer be covered by the provincial drug insurance scheme (except in certain exceptional circumstances).

This followed the minister entering a product listing agreement with the manufacturer of Inflectra, a bio-similar drug to Remicade. The minister relied on authority granted to him under s. 60.0.4 of the Act respecting prescription drug insurance, which allows delisting a drug if a competing medication is the subject of a listing agreement. The minister gave Janssen no prior notice that such a decision was forthcoming and, on the facts of the case, Janssen had good reason to be surprised by the decision. Janssen applied for judicial review of the minister’s decision.

Fairness requirement

On January 16, 2019, the Court of Appeal declared that the minister had failed to respect the minimum requirements of procedural fairness that applied in the circumstances. The court held that in the factual context in which the minister made his decision, the principle of procedural fairness demanded: (i) giving Janssen sufficient notice that such a decision might be made; (ii) giving Janssen the opportunity to present its comments on the forthcoming decision; and (iii) providing Janssen with reasons for the decision.

Concluding that the minister’s failure to respect basic fairness requirements justified invalidating his decision, the court ordered that Remicade be reinstated on the List of Medications. The court gave no indication of whether the minister’s decision was reasonable on its merits.

The court applied a duty of fairness on the basis that the decision to list or to delist a specific drug on the List of Medications is an administrative one, not a regulatory one, even though the publication of the List of Medications as a whole is regulatory in nature. Therefore, listing decisions made by a minister for specific drugs are subject to judicial review based on the standard applicable to administrative decisions, not on the standard of review applicable to regulations.

This decision is likely to broaden the potential basis for judicial review of ministerial decisions on listing and delisting drugs on the List of Medications, and should also require that, in the future, the minister take into account procedural fairness requirements when deciding whether to delist a drug. However, the content of this duty may vary depending on the factual context.

Link: Janssen inc. c. Ministre de la Santé et des Services sociaux, 2019 QCCA 39 (French).

Advertising Standards Canada introduces new advertising dispute procedure for resolving disputes between competitors 

Effective February 11, 2019, Advertising Standards Canada (Ad Standards Canada) will implement a new Advertising Dispute Procedure (the Procedure) to govern complaints between competitors for  alleged breaches of the Canadian Code of Advertising Standards (the Code). The new Procedure (formerly known as the Trade Disputes Procedure) is designed to further streamline the resolution process for advertising complaints between competitors. Key elements of the Procedure include: 

  • New pre-conditions for accepting a complaint. Ad Standards Canada will not accept a complaint from an advertiser unless it is satisfied that: (i) the complainant has made a good faith attempt to resolve the dispute directly with the defendant advertiser; (ii) there are reasonable grounds to proceed with the alleged Code violation(s), and the advertising at issue has not been excluded from adjudication; and (iii) the complaint is accompanied by the applicable fee. 
  • Voluntary resolution meetings.  For a small fee, either party may ask Ad Standards Canada to hold a voluntary resolution meeting between the complainant and defendant advertiser to resolve the complaint. The meeting will be moderated by Ad Standards Canada. A voluntary resolution meeting will only occur if both parties agree. Failure to agree to attend the resolution meeting will not prejudice the party in adjudicating the complaint. 
  • Three member adjudication panel. Under the new Procedure, complaints will be reviewed by a three member Adjudication Panel (the Panel). The Panel will be chaired by a lawyer and two members selected from a roster of industry professionals. 
  • No in-person hearing or appeal. In contrast to the old procedure, no live hearings will be held. The Panel will only consider written submissions from the parties. No appeal will be permitted from the decision of the Panel.
  • Timelines. Ad Standards Canada will acknowledge the complaint within three working days of receipt. Ad Standards Canada will confirm whether the complaint has been accepted or declined. The defendant’s response, complete with all evidence, is due no later than 10 working days following a voluntary resolution meeting or 10 working days following receipt of the complaint if no resolution meeting is held. The complainant will then have five working days after receipt of the defendant’s response to submit a reply following which the defendant will have five working days to submit a further reply. No further submissions will be allowed unless specifically requested by Ad Standards Canada. The Panel’s decision will be communicated to the parties within 10 working days after the Panel received the completed adjudication file from Ad Standards Canada. 
  • Confidentiality and case summaries. Proceedings under the new Procedure will remain confidential. However, Ad Standards Canada intends to publish anonymized case summaries to provide clarity about practices that are considered to contravene the Code. Consistent with the previous procedure, failure to comply with the Panel’s decision may result in Ad Standards Canada publicly identifying the parties.
  • Reduced fees.  Fees under the new Procedure are reduced from the previous procedure which could cost upwards of $15,000 for a hearing. The new adjudication fee is payable by the complainant and partially refundable (in the amount of $3,500) in the event the complaint is settled before the panel receives the parties’ submissions. The voluntary resolution meeting fee is shared equally by the complainant and the defendant while the complaint filing fee is paid by the complainant.
Member fee (+Tax) Non-member fee (+Tax)
Complaint filing fee (non-refundable) $1,500 $2,000
Voluntary resolution meeting fee (non-refundable) $2,000 $3,000
Adjudication fee $7,000 $8,500

Questions regarding the interpretation or application of the Procedure can be directed, without cost, to Ad Standards Canada.

Link: Ad Dispute Procedure – 2019

Health Canada consulting on the contents of the Generic Submissions Under Review List

On January 7, 2019, Health Canada opened a consultation on whether to include the names of sponsor companies on the generic submissions under review list (GSUR) for Abbreviated New Drug Submissions (ANDSs). This type of information was recently added to the list of drug and health product submissions under review (SUR) that Health Canada has maintained since 2015.

Historically, the SUR list has been restricted to New Drug Submissions (NDSs) and Supplemental New Drugs Submissions (SNDSs). With respect to each of these submissions, the SUR list includes the medicinal ingredient, therapeutic area, and month in which the submission was accepted, as well as the recent addition of sponsor and “submission class” information for submissions accepted on or after October 1, 2018. The GSUR was launched in October 2018 with a more limited set of data restricted to the medicinal ingredient, the therapeutic area, and the number of submissions under review, but not the month the submission was accepted or the name of the company sponsor.

The consultation on adding sponsor names to the GSUR list is open until February 8, 2019. In seeking feedback, Health Canada has asked for (i) a description of the person providing feedback (e.g., General Public, Health Professional, Pharmaceutical Industry), (ii) the potential impact of including the name of the sponsor, and (iii) if and how this information would be useful to the person providing feedback.

For details on the consultation see: https://www.canada.ca/en/health-canada/services/drugs-health-products/public-involvement-consultations/drug-products/notice-company-names-generic-submissions-under-review.html

Top Headlines of 2018

Last year ushered in a number of changes to the Canadian pharmaceutical and life sciences sector. 2018 also served as a year to explore the impacts of major intellectual property decisions and regulatory changes from 2017 including the impact of the Supreme Court’s decision in NEXIUM striking down the Promise Doctrine and the implementation of CETA on single-track patent litigation under the newly amended Patented Medicines (Notice of Compliance) Regulations. Further, a number of IP and regulatory developments arose, such as: the potential for a national pharmacare program, advances to the self-care products framework for non-prescription drugs, natural health products and cosmetics, and amendments to the Patent Act and other intellectual property statutes as a result of Bill C-86.

We have compiled our list of Pharma in Brief’s top headlines from 2018 below:

Legislative Developments

  • Bill C-86. The enactment of Bill C-86, the Budget Implementation Act, 2018, No. 2 in December 2018 brought with it significant changes to Canada’s core IP statutes, including changes to the Patent Act that will affect patentees in the pharmaceutical and life sciences sector, such as: (i) the possible admissibility of the patent prosecution history (file wrapper) in litigation as evidence to rebut a patentee’s representations on claims construction, (ii) revised and restated exceptions to infringement for experimental use and continued acts first undertaken prior to the claim date, (iii) provision for standard-essential patents, and (iv) regulations for demand letters and related offences.
  • New protections for biologics and other pharmaceuticals under the USMCA. The United States-Mexico-Canada Agreement (USMCA), which replaces the North American Free Agreement (NAFTA) will introduce new protections for biologics and other pharmaceuticals, including an extended data protection term of ten years for new biologics and a new patent-term restoration system for unreasonable delay in patent prosecution. This new system is not specific to pharmaceuticals and will be additional to any Certificate of Supplementary Protection (CSP) that may be available for pharmaceutical patents. Although signed in 2018, the USMCA awaits ratification by its member states in 2019 before it will come into force.
  • Health Sector Payment Transparency Act delayed or abandoned. The Ontario government passed the Health Sector Payment Transparency Act (HSPTA) as part of Bill 160 in December 2017 and published draft regulations for consultation in February 2018. The draft regulations defined terms, set thresholds, and established the manner and frequency of, and exceptions to, reporting requirements. However, in April 2018, the Ontario government delayed implementation until after the fall election. The regulations have not been revisited since the election and it is unclear whether they will be enacted or abandoned under the current Ontario government.

Regulatory Schemes and Guidance

  • Health Canada Expands the Submissions Under Review List to include ANDSs. As of October 1, 2018, Health Canada is publishing a list of abbreviated new drug submissions (ANDSs) under review on the Generic Submissions Under Review (GSUR) List. The list includes the medicinal ingredient(s), the therapeutic area and the number of submissions under review. Health Canada also expanded its Regulatory Decisions Summaries to include certain ANDSs, supplemental abbreviated new drug submissions (SANDSs) and supplemental new drug submissions (SNDSs).
  • The potential for a national pharmacare program. In February 2018, the Federal government tabled its 2018-2019 budget, which contemplated the creation of a national pharmacare program that would introduce a pricing and reimbursement model for certain prescription medications. Beyond the Standing Committee on Health’s April 2018 recommendations on the best way to move forward with a universal single payer prescription drug coverage program, the Advisory Council on the Implementation of National Pharmacare is expected to provide a 2019 report commenting on the proposed implementation.
  • New CADTH guidelines for biosimilars. In February 2018, the Canadian Agency for Drugs and Technologies in Health (CADTH) released new procedural guidelines for both cancer and non-cancer-related biosimilar submissions. Key changes to the review and resubmission for biosimilars included shorter review times, fewer submission requirements, a new fee structure, and no provincial/territorial reimbursement recommendation.
  • Self-care products framework. Health Canada announced that it will advance the new self-care products framework, a new risk-based regulatory framework for non-prescription drugs, natural health products, and cosmetics, under existing legislation by updating the Natural Health Products Regulations and the Food and Drug Regulations on a rolling basis through 2020.

Case Law Developments

  • Developments on PM(NOC) cases and CSPs following CETA. In September 2017, following the enactment of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), key reforms to the Patent Act were introduced, including patent term restoration (CSPs) for patented pharmaceuticals under the Certificate of Supplementary Protection Regulations and a new single-track pharmaceutical patent litigation system under the Patented Medicines (Notice of Compliance) Regulations. With respect to CSPs, 16 CSP applications have been granted, 4 applications have been refused, and 7 applications are still pending, according to Health Canada’s online Register. The first application challenging the Minister’s decision to refuse a CSP was commenced in the Federal Court (Federal Court file No. T-1603-18) in August 2018. With respect to proceedings under the newly amended Patented Medicines (Notice of Compliance) Regulations, approximately 20 actions were started in 2018. Early interlocutory decisions included: (i) the Federal Court’s decision to dismiss Amgen’s motion against Genentech, Inc. and Hoffman-La Roche Limited for early dismissal of two patents under section 6.08 of the Patented Medicines (Notice of Compliance) Regulations, and (ii) the requirement for a concurrent trial on issues of validity in cases brought by a first person against two generics related to patents covering Biogen’s FAMPYRA .
  • Post-NEXIUM decisions. The impact of the Supreme Court’s landmark ruling in AstraZeneca Canada Inc. v Apotex Inc., 2017 SCC 36 (NEXIUM), which rejected the “Promise Doctrine”, played out in different contexts throughout the year. For one, the Ontario Court of Appeal and the Federal Court of Appeal reached conflicting conclusions as to whether the NEXIUM decision’s change in law triggered the special circumstance exception to the doctrine of issue estoppel. Further, AstraZeneca successfully relied on the NEXIUM decision to avoid liability for section 8 damages. The Court also refused Apotex’s motion to re-open validity to adjudicate the issue of overpromising in light of the Supreme Court decision. Finally, the Ontario Superior Court rejected Apotex’s later attempt amend its pleadings in a section 8 damages action in order to revive the Promise Doctrine under the guise of invalidity allegations.
  • Infringement damages and accounting of profits decisions. The Federal Court of Appeal upheld the Federal Court’s damages order that Teva pay Janssen over $18 million for infringing sales of levofloxacin (LEVAQUIN) in Canada. The Federal Court of Appeal also held that Janssen US had standing to claim damages under section 55(1) of the Patent Act (i.e., Janssen US was not required to demonstrate that it had held title in Canada to the LEVAQUIN tablets it had sold to Janssen Canada). In a decision relating to Bayer’s patents for YAZ and YASMIN, the FCA reiterated that the patentee, and not the infringer (Apotex), is entitled to elect between damages and an accounting of profits after a finding of infringement. In a case between Eli Lilly and Apotex related to CEFACLOR, the Federal Court of Appeal confirmed that in assessing the availability of a non-infringing alternative (NIA) defence, the NIA must be legal and cannot infringe any patent, and its economic viability must be considered objectively. The Federal Court of Appeal upheld the Federal Court’s damages award but remitted the issues of prejudgment interest to the Federal Court for redetermination. Finally, in a redetermination of profits decision related to COVERSYL (perindopril), the Federal Court dismissed Apotex’s NIA defence finding that Apotex could not and would not have sold the NIA in the hypothetical world. The Court refused to reduce Servier and ADIR’s profits.

As 2019 unfolds we will continue to monitor developments in these areas and look forward to sharing them with you in Pharma in Brief.

LexBlog