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:
- 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.