Pharma in Brief: The 2021 Year in Review

In this article, the Pharma in Brief team has curated and provided updates on the most significant topics we covered in 2021.

Introduction

In 2021, governments advanced major policy initiatives aimed at the COVID-19 pandemic and broader health priorities. These policy initiatives included reforms to the Patented Medicine Prices Review Board (PMPRB), the Patented Medicines (Notice of Compliance Regulations) (PM(NOC) Regulations), the Patent Rules, and other regulatory matters at Health Canada.

The courts also had a busy year in 2021. The Federal Court (FC) and Federal Court of Appeal (FCA) continued to develop the jurisprudence surrounding the “new” PM(NOC) Regulations. Meanwhile, the Ontario Superior Court released two decisions dismissing claims made by a generic manufacturer under the Ontario and English Statutes of Monopolies, and common law causes of actions. There were also several judicial review proceedings challenging government action in the pharmaceuticals space, including PMPRB pricing decisions, and Health Canada decisions on data protection and the issuance of certificates of supplementary protection (CSPs).

1. Major Policy Initiatives

(a) COVID-19

In response to the COVID-19 pandemic, in 2020, the Minister of Health signed interim orders designed to streamline the process to authorize the importation or sale of drugs, vaccines, and medical devices used to diagnose, treat, mitigate, or prevent COVID-19.

In 2021, the Food and Drug Regulations were amended to transition COVID-19 drugs and vaccines out of the interim order framework (see here). As a result of these amendments, Health Canada will now approve a COVID-19 drug by issuing a notice of compliance (NOC) after examining a new drug submission (NDS) or supplement to a new drug submission (SNDS). There continues to be some flexibility for COVID-19 drug NDSs, such as the ability to complete submission data as it becomes available (i.e., a rolling submission). Previous COVID-19 drug authorizations must now be regularized by filing an NDS or SNDS and obtaining an NOC in order to be maintained.

(b) Continued changes to the PMPRB

In 2019, the federal government introduced amendments to the Patented Medicines Regulations (the Amendments). The Amendments were intended to lower the prices of patented medicines in Canada by changing how the PMPRB assesses whether patentees’ prices are “excessive”.

The Amendments and the accompanying Guidelines are still not in force.  They have been delayed four times: first to January 1, 2021, then to July 1, 2021, then to January 1, 2022, and most recently to July 1, 2022 (see here and here).  The Minister of Health has indicated that the reason for the most recent six-month delay is to provide additional time for impacted stakeholders to focus their efforts on responding to the challenges presented by the COVID-19 pandemic.

The Amendments and the accompanying Guidelines continue to be the subject of ongoing litigation. In 2020, the FC struck down the new price calculation contained in the amendments but upheld the other impugned amendments. This decision is currently under appeal and cross-appeal in Federal Court of Appeal File No. A-215-20. In a separate constitutional challenge, the Superior Court of Quebec also struck down the new price calculation. In December 2021, the Court of Appeal of Quebec heard the appeal and took the decision under reserve. In addition, the Guidelines have been challenged in an application for judicial review in Federal Court File No. T-1419-20.

Other changes to the Patent Act and the Patented Medicines Regulations did come into force in 2021. These changes now require holders of CSPs to report information to the PMPRB on substantially the same terms and conditions as would be reported by patentees (see here).

(c) Other policy developments

There were many other policy developments in the pharmaceutical sector in 2021. Notably, Parliament rejected Bill C-213, An Act to enact the Canada Pharmacare Act, primarily due to the bill’s unilateral imposition of national pharma-care on the provincial-territorial jurisdiction over healthcare (see here).

Health Canada also undertook several policy consultations. Following one consultation, Health Canada published a report on building a national strategy to address access to drugs for rare diseases (see here). Health Canada also consulted on proposed guidelines for the use of electronic media in prescription drug labelling (see here). The intent of the draft guidance document is to describe Health Canada’s expectations for manufacturers who distribute prescription drug information through an electronic means, such as a website or mobile app, that is directly linked to a product’s packaging or label.

Proposed amendments to the PM(NOC) Regulations were also introduced in 2021.  The purpose of these amendments is to balance the corresponding proposed amendments to the Food and Drug Regulations, which would allow the Abbreviated New Drug Submission pathway to be available for generic drug products that contain different forms (e.g., different salt forms) of the medicinal ingredient in comparison to the Canadian Reference Product. The proposed amendments to the PM(NOC) Regulations would also allow patents claiming different salt forms of medicinal ingredients to be eligible for inclusion on the patent register.

The Government of Canada also proposed a series of amendments to the Patent Rules intended to keep Canada compliant with its obligations under the Canada-United States-Mexico Agreement and the Patent Cooperation Treaty. The proposed amendments contain fee changes including the introduction of an excess claim fee for applications with over 20 claims.

In Quebec, a regulation came into force in 2021 that prohibits a drug manufacturer from offering financial assistance to patients to help cover the cost of a drug on the provincial formulary (see here). While this includes some patient support programs, there are humanitarian and other exceptions set out in the regulation.

2. 2021 in the Courts

(a) PM(NOC) Regulations decisions

The major amendments to the PM(NOC) Regulations, made in 2017, continue to be interpreted by the FC and the FCA. In 2021, these Courts provided guidance on a number of procedural issues arising from this unique regime.

In one decision, the FC held that a defendant in an infringement action brought under the PM(NOC) Regulations was permitted to amend its defence to include invalidity allegations not found in the notice of allegation (NOA). The FC accepted that it is the pleadings—not the NOA—that define the scope of the proceedings (see here). This decision was upheld by the FCA (see here). In another decision, the FC held that the “related right of action” for infringement of unlisted patents under section 8.2 of the PM(NOC) Regulations is not subject to the 45-day limitation period familiar to patentees asserting infringement of listed patents under subsection 6(1) (see here).

The PM(NOC) Regulations also continue to provide an arena in which courts decide substantive patent law issues. In one of these decisions, the FC held that prosecution history evidence is inadmissible to rebut representations made by a patent licensee (as opposed to the patentee) on claims construction (see here). In another decision, the FC determined that sufficiency of disclosure is to be assessed on the patent application’s publication date, but that the document to be assessed on that date is the issued patent—not the application (see here).

The FCA also provided guidance on “inventive concept”. The Court held that where the inventive concept cannot be readily discerned from the construed claims, recourse to the patent’s description is appropriate. Accordingly, the inventive concept may include advantageous properties stated in the patent’s description. The FCA confirmed that inventive concept continues to be end-point to assess whether an invention is obvious (see here). Leave to appeal to the Supreme Court was sought and denied.

(b) Ontario Statutes of Monopolies decisions

Over the past decade, a generic manufacturer has been pursuing claims in the Ontario Superior Court under the Ontario and English Statutes of Monopolies, and other common law causes of action. The generic manufacturer argues that it is entitled to damages if an innovative drug manufacturer excludes it from the market with a registered patent and that patent is subsequently found invalid and void ab initio.

In two separate summary judgment decisions, the Ontario Superior Court has now dismissed these claims on their merits. Both decisions held that the Patent Act and the PM(NOC) Regulations operate as a complete code that precludes other causes of action (see here and here). The generic manufacturer has appealed both decisions to the Ontario Court of Appeal.

(c) Judicial review decisions

In 2021, the FC and the FCA quashed several administrative decisions relating to the pharmaceutical regime. In one case, the FC set aside a decision denying an application for a CSP because the decision did not account for applicant’s argument regarding the statutory purpose of subsection 106(1) of the Patent Act (see here). In another case—this one involving the data protection provisions of the Food and Drug Regulations—the FC quashed a decision that granted an NOC to a product 10 days after the innovative drug was approved (see here).

The FCA also quashed an excessive-price decision of the PMPRB and remitted the matter to the PMPRB for redetermination. The FCA noted that the PMPRB failed to explain whether the price was excessive within the meaning of section 85 of the Patent Act and expressed concerns regarding the Board’s interpretation of its own mandate (see here). The Attorney General of Canada has sought leave to appeal this case to the Supreme Court (see here).

In another appeal of a judicial review decision, the FCA set aside a decision of the FC, which had invalidated Health Canada’s decision to disclose records in response to a request made pursuant to the Access to Information Act. The Court noted that many of the documents excluded by the FC were not confidential and could be disclosed, and remitted the matter for redetermination on several issues (see here).

The Pharma in Brief Team thanks you for readership in 2021. We will continue to monitor developments as many of the matters highlighted for 2021 continue to evolve and come to a head in 2022 and beyond.