Apotex held to induce infringement in one of the last applications under the old PM(NOC) Regulations

The Federal Court has granted an order prohibiting the Minister of Health from issuing a Notice of Compliance to Apotex Inc. for a generic version of ZYTIGA (abiraterone acetate). It held that the use of the combination of abiraterone acetate and prednisone claimed by Janssen Inc.’s patent was patentable subject matter, and that the patent’s claims were non-obvious and possessed at least a scintilla of demonstrated utility. The Court also held that Apotex would induce infringement of Janssen’s patent with the product monograph for its proposed generic. This will likely be one of the last cases decided under the pre-September 2017 Patented Medicines (Notice of Compliance) Regulations (the PM(NOC) Regulations).

Background

Janssen Inc. markets ZYTIGA in Canada for use in the treatment of prostate cancer. Apotex Inc. (Apotex) sought approval for a generic version of ZYTIGA, APO-ABIRATERONE. Canadian Patent No. 2,662,422 (the 422 Patent) is listed on the patent register in respect of ZYTIGA. Apotex served a Notice of Allegation under the PM(NOC) Regulations, as they read prior to September 21, 2017, alleging that the 422 Patent was invalid and would not be infringed. Janssen Inc., Janssen Oncology, Inc., and BTG International Ltd. (collectively, the Applicants) brought an application for a prohibition order on the basis that Apotex’s allegations were not justified. The Applicants argued that Apotex should therefore be denied a Notice of Compliance until the expiry of the 422 Patent.

The invention and Asserted Claims of the 422 Patent

The 422 Patent’s invention is described as methods for treating cancer by administering a 17α-hydroxylase/C_17,20-lyase (CYP17) enzyme inhibitor, such as abiraterone acetate (AA), in combination with one or more additional therapeutic agents, such as prednisone (PN).

All of the claims at issue in this proceeding (the Asserted Claims) were directed towards the use of therapeutically effective amounts of AA and PN combined to treat prostate cancer. The dispute also turned on the function of PN as an anti-cancer agent (as claimed by the Applicants) and/or as a means to treat AA’s side effects (its more commonly known function).

The Applicants argued that the 422 Patent claimed the invention of the combination of AA and PN for the treatment of prostate cancer. Apotex contended that AA and PN did not work synergistically and that the 422 Patent did not claim such an interaction. The Court ultimately held that the 422 Patent claimed the cancer-fighting feature of PN, rather than its palliative effects. In considering the expert evidence, the Court debated the pros and cons of expert “blinding”. Ultimately, the Court declined to prefer the opinions of Apotex’s experts merely on the basis that they were “blinded”.

The 422 Patent claims patentable subject matter

The Applicants argued that the Asserted Claims were to patentable subject matter because AA and PN, when combined, produced an unexpected anti-cancer effect that was not observed when either drug was administered alone. Apotex asserted that the subject matter of the Asserted Claims was unpatentable because they merely claimed the combination of two known anti-cancer agents without suggesting any synergistic results.

The Court rejected Apotex’s allegation, holding that if a combination claimed to produce a greater cumulative effect than those produced individually by its components, then that was patentable. Even though the individual anti-cancer effects of AA and PN were not well-established as of the relevant time, the Asserted Claims disclosed an anti-cancer combination that was more effective than the sum of the effects of those agents used alone.

The Asserted Claims are not obvious

With respect to obviousness, the Court found that the inventive concept required not only the combination of AA and PN, but their combination for the purpose of treating prostate cancer, where each drug contributed to an anti-cancer effect (as opposed to treating side-effects). To come to the inventive concept, the skilled person would have had to determine that AA should be further tested for the treatment of prostate cancer and then decide to combine AA and PN to treat prostate cancer.

The O’Donnell 2004 article was an important piece of prior art in this case in that it set out the only reported trial of AA treatment of prostate cancer in humans prior to the relevant time. Based on the article, a skilled person would have found AA promising in terms of secondary hormonal treatment for prostate cancer. However, O’Donnell 2004 did not point to observable AA side effects that would have prompted the introduction of a concurrent prescription of a glucocorticoid replacement, such as PN.

The Court held that the invention was not obvious because no prior art suggested that the effectiveness of AA in treating prostate cancer might be increased if used in tandem with another drug. Further, the prior art did not establish the existence of any observable AA side effects. Therefore, it would not have been obvious to concurrently prescribe AA and PN. The Court also found that the combination of AA and PN to treat prostate cancer was not obvious to try because such an arrangement was neither set out nor predicted in any prior art. Consequently, considerable effort and inventive ingenuity would have been required to discover this treatment method.

The Asserted Claims do not lack utility

Apotex argued that the Asserted Claims lacked demonstrated utility on the basis that the studies relied upon by the Applicants were conducted with a combination of AA and an alternative glucocorticoid to PN, dexamethasone. Apotex also argued that the Applicants could not rely on sound prediction because no factual basis or sound line of reasoning was provided in the 422 Patent.

With respect to sound prediction, the Court applied the “enhanced disclosure” requirement and found in favour of Apotex. It then went on to consider whether utility had nonetheless been demonstrated.

The Court held that the equivalent dosage of dexamethasone and PN was known at the relevant date, and that the hypothesis that the invention would work was relevant to all glucocorticoids — not just PN. The Court also accepted that preliminary findings from one of the Applicants’ clinical trials showed that the combination of AA and PN had utility in the treatment of prostate cancer. Although this study did not demonstrate that the combination had any greater effect than AA or PN on its own, the Court was satisfied that there was a scintilla of evidence that this was true when the results were viewed in the light of earlier studies. The Court therefore rejected Apotex’s inutility allegations.

Apotex would induce infringement of the 422 Patent

Apotex asserted that the product monograph (PM) for its proposed generic AA drug, which indicated only AA as the anti-cancer treatment, did not recite the same combination use set out in the Asserted Claims. The Court disagreed, holding that Apotex intended the same drugs to be used in the same amounts and for the same overall purposes based on to the PM.

Although the words “therapeutically effective amount” were not included in the PM with respect to PN, the Court noted that Apotex could not argue that it indicated a use of its drug in an amount that was ineffective to treat prostate cancer.

The case is: Janssen Inc. v Apotex Inc., 2019 FC 1355

Federal Court of Appeal applies holistic approach to the “palpable and overriding error” standard of review

By Bianca Pietracupa, Christopher A. Guerreiro and Brian R. Daley on November 11, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

The Federal Court of Appeal has provided a detailed review of the proper approach to identifying palpable and overriding errors of fact or mixed fact and law in an appeal concerning the obviousness of two patents. The Court of Appeal concluded that when viewed as a whole, there was no reviewable error in the judgment and dismissed the appeal.

Background

The underlying action concerned a claim by Teva Canada Limited (Teva) for damages under section 8 of the Patented Medicines (Notice of Compliance) Regulations (the Regulations) concerning a generic version of VELCADE (bortezomib). The defendants, Janssen Inc. (Janssen) and Millennium Pharmaceuticals, Inc. (Millennium), argued that Teva was not entitled to damages because sales of its generic product would have infringed certain patents. These patents were also asserted by Janssen, Millennium, and co-plaintiffs in a counterclaim for a declaration of infringement. In response, Teva sought declarations that all of the claims in issue were invalid. The Federal Court found the claims of two of these patents invalid for obviousness.

On appeal, Janssen, Millennium, and their co-appellants sought to overturn the trial judgment on the basis that Locke J. (as he then was) did not apply the correct legal test for obviousness.

Appeal

The Court of Appeal found that, on fair reading of the Locke J.’s reasons, the proper legal test for obviousness was applied. As such, there was no error of law. The Court of Appeal also found that the appellants’ arguments were focussed on adverse findings of fact and mixed fact and law, which may only be overturned in the event of a palpable and overriding error.

The Court of Appeal rejected the argument that Locke J. had made palpable and overriding errors in his obviousness analysis, including allegations that the analysis was conducted with hindsight or by cherry-picking from the prior art. Although the appellants cited evidence upon which Locke J. could have found in their favour, the Court of Appeal concluded that preferring one line of evidence over another is the exclusive prerogative of the trial court.

In rejecting the specific errors alleged by the appellants, the Court of Appeal stated that the existence of a palpable and overriding error should not be demonstrated by parsing individual paragraphs of the judgment rendered in first-instance, but rather by treating it as a whole. Deficiencies in the reasons such as imprecise wording or phrases read in isolation did not constitute errors, but rather were a by-product of the trial judge’s efforts to distill the complex facts it into comprehensible reasons. An inquiry into palpable and overriding error overlooks matters of form and gets at the substance of what the trial court did.

Moreover, reasons which fail to mention particular evidence do not necessarily indicate that such evidence was not taken into consideration by the trial judge. There is a rebuttable presumption that the first-instance court reviewed and considered all of the evidence before it. By reviewing the reasons as a whole, it may be possible to discern what the trial court considered and decided, and why — even if it is not explicitly stated.

As the appellants did not succeed in raising an error of law, nor did they identify any palpable and overriding error in the Court’s reasons, the appeal was dismissed.

The case is: Millennium Pharmaceuticals Inc. v Teva Canada Limited, 2019 FCA 273

Ontario consults on changes to streamline drug formulary listing and reduce government payments to pharmacies

By William Chalmers and Kristin Wall on November 10, 2019 Posted in Life sciences and healthcare, Pharmaceuticals and life sciences

The Ontario Ministry of Health and Long-Term Care (the Ministry) has proposed draft amendments to Regulations made under the Ontario Drug Benefit Act (ODBA) and the Ontario Drug Interchangeability and Dispensing Fee Act. The proposed changes are intended to reduce technical requirements for listing a product on the Ontario formulary and align policies with industry standards and other provinces. The consultation period will close on November 27, 2019.

The proposed changes

Key changes to the Regulations include:

Remove the requirement for the Drug Notification Form (DNF) from formulary drug submissions. A DNF is a form submitted to Health Canada as proof of a “first sale” of the drug and indicates that the manufacturer has supply of the drug. Currently, in Ontario, the absence of this form is one of the most frequent reasons why a submission for listing is deemed incomplete. Removal of the DNF requirement would ease burden on industry and enable earlier formulary submissions.
Reduce requirements for biosimilar drug submissions. Health Canada has an approval method for biosimilar drug products that assesses whether there are clinically meaningful differences between the biosimilar product and the reference biologic product. The proposed amendments would rely upon Health Canada’s approval and eliminate the requirement that the manufacturer submit clinical evidence of efficacy and safety, along with evidence of the pharmacoeconomic benefit of the product. Eliminating these duplicative submission requirements will enable biosimilar products to be funded more quickly.
Permit generic drug price adjustments. Pricing of interchangeable generic drugs changes depending on the number of market competitors with the lowest price typically achieved with 3 or more generics in the market. The proposed changes would reduce the regulatory burden on industry since manufacturers would no longer need to apply for price adjustments when the number of competitors change.
Streamline drug submission requirements for generic line extension. The proposed changes simplify the submission requirements if Health Canada has approved a line extension for sale in Canada (for example, a dosage strength or formulation that is different from what the brand is offering). Manufacturers will no longer be required to submit clinical evidence of the product’s efficacy and safety, or evidence demonstrating the product’s pharmacoeconomic benefit to have their line extensions listed on the Ontario Formulary.
Revoke provisions authorizing Ontario to conduct price review of certain single source generic products. This pricing assessment is already conducted through the current pan-Canadian generic pricing framework. The Ministry characterizes this change as a “housekeeping change that removes out-dated clauses”.
Permit short-term funding by exempting certain submission requirements in the event of drug shortages. Where there is a shortage of a listed drug product and it is in the public’s interest, a manufacturer will no longer be required to submit clinical evidence of the product’s efficacy and safety, or evidence of the product’s pharmacoeconomic benefit in order to be listed. This provision would only apply to drug products that have the same or similar active ingredients or therapeutic uses as the drug product subject to the shortage.
Modify the cap for ordinary commercial term (OCT) payments from 10% to 25%. Ontario currently caps OCT payments (which are excluded from the definition of rebate in the ODBA) at 10%. OCT payments allow pharmacies to receive benefits provided in the ordinary course of business. The proposed changes would modify the cap to increase OCT payments from 10% to 25%. This would permit manufacturers to offer greater discounts to pharmacies and wholesalers and brings Ontario more in line with the rebates that are currently permitted in other Canadian provinces and territories.

A copy of the consultation documents published by the Ministry can be accessed here. Comments on the proposed changes can be submitted by email before November 27, 2019.

Proposed Changes reducing the Ministry’s payments to pharmacies

In a separate consultation process, the Ministry is also proposing a reduction in payments it makes to pharmacies for dispensing drug benefits for Ontario Drug Benefit program recipients, other than long-term care home residents. Under the draft Regulations, the Ministry would deduct a percentage from the sum of the dispensing fee and mark-up for all drug claims. The proposed reconciliation adjustment is two-tiered, with adjustments based on the cost of the drug:

Tier 1: Maximum of 16% for drug costs equal to or over $1,000; and
Tier 2: Maximum of 4% for drug cost under $1,000.

The proposed reconciliation adjustments would be temporary to March 31, 2023, and would allow for an estimated cumulative costs savings of $180.1M by 2022-2023. A copy of the consultation documents published by the Ministry can be accessed here. Comments on the draft Regulations are due November 30, 2019.

Federal Court rejects the concept of “first mover advantage” for generics in PM(NOC) infringement actions

By Paul Jorgensen and Jordana Sanft on November 7, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

The Federal Court has ordered that two additional generic defendants (Taro Pharmaceuticals Inc., Sandoz Canada Inc.) be added to a trial of common issues currently set for Bayer Inc.’s claims against Teva Canada Limited and Apotex Inc. concerning generic versions of XARELTO^® (rivaroxaban) under the Patented Medicines (Notice of Compliance) Regulations (the Regulations).

All four proceedings are patent infringement actions brought by Bayer under the Regulations. The actions were launched in response to each defendant’s Notice of Allegation (NOA) for their respective generic versions of XARELTO^® and one or more Bayer patents.

Earlier this year, the Court ordered a trial on the common issues of claims construction and invalidity in the Teva and Apotex actions. Those actions had been launched by Bayer within a month of each other, in November and December of 2018. Subsequently, Bayer launched actions against Taro and Sandoz in March and May of 2019. Under the Regulations, each action must be decided within 24 months of being filed. As a result of this most recent order, the common issues of claims construction and invalidity in all four actions will now be decided within the 24-month window of the first action.

Bayer, Taro, and Sandoz argued that the common issues in all four cases ought to be heard together. The Court agreed, rejecting Teva and Apotex’s submission that they should not lose the commercial advantage that they gained by serving their NOAs earlier than Taro and Sandoz. The Court accepted that “the balance of interests and commercial realities underlying the regime set out in the Regulations is a relevant background consideration”. However, the Court rejected the argument that it should protect any “first mover advantage” as a general principle. The Court reasoned that no party is guaranteed that its hearing and decision will proceed before any other. The Court agreed with the reasons in another recent case where the Court found that an earlier NOA did not guarantee an earlier judgment or an earlier market entry. The Court also noted that any “first mover advantage” may effectively disappear if Teva’s counterclaims of invalidity were successful.

The Court found that, in the circumstances, it was in the interests of justice to add Taro and Sandoz as defendants to the hearing of common issues. There were two primary considerations:

First, Taro and Sandoz were ready to proceed in accordance with the schedule previously established for Teva and Apotex.
Second, it was in the interests of justice for the Court to hear the evidence and submissions of all of the parties prior to determining the issues of claims construction and invalidity. This would avoid the risk of different rulings and provide the Court with all of the parties’ evidence and submissions before making a ruling that would impact each of them.

The Court further stated that separate hearings on infringement will follow the trial of the common issues and therefore it is likely that the separate hearings on infringement for each of Taro and Sandoz will not be scheduled until after the trials on all issues are completed for Teva and Apotex.

The Federal Court’s decision has been appealed (Court Files No. A-388-19/ A-389-19).

The case is: Bayer Inc v Teva Canada Limited, 2019 FC 1039

Stockpiling generic manufacturers may be liable for direct infringement of “composition for a use” claims

By William Chalmers and Daniel Daniele on November 7, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

The Federal Court has found that it is reasonably arguable that a claim for “a composition for use in the treatment of a disorder” may be directly infringed through the importation, manufacture and stockpiling of the composition. The Court distinguished these claims from pure “use of a composition for a treatment” claims, which can only be infringed by a generic manufacturer through inducing infringement.

Background

The Court’s decision concerns a pleadings amendment motion by Eli Lilly Canada Inc. and its co-plaintiffs (collectively, Lilly) in patent infringement actions against: (1) Apotex Inc.; (2) Mylan Pharmaceuticals ULC; (3) Teva Canada Limited; and (4) Pharmascience Inc. and Laboratoires Riva, all concerning generic versions of the plaintiffs’ CIALIS tadalafil. The defendants began selling their respective generic products in Canada following the expiry of a patent (the 784 Patent) that had been successfully asserted in prohibition proceedings under the Patented Medicines (Notice of Compliance) Regulations (the PM(NOC) Regulations).

Lilly sought to amend its pleadings to claim that the generic defendants infringed the 784 Patent (prior to its expiry) by manufacturing, importing and stockpiling tadalafil for the treatment of ED, resulting in springboard damages.

The Decision

The defendants contested the amendment by arguing that it was plain and obvious that the amended claim could not succeed. The crux of the defendants’ argument was that the 784 Patent is a “use” patent, and that manufacturers can only be liable for infringement of “use” patents through inducing others to use the medicinal ingredient in the specified treatment. Manufacturers do not use medicinal ingredients for particular treatments — these acts are confined to patients and doctors. Since the generic manufacturers had not sold tadalafil prior to expiry of the 784 Patent, they argued that they cannot be liable for inducing patients and doctors to infringe that patent.

The Court rejected this argument on the basis that the defendants had conflated claims for a “use of a composition in a treatment” with claims for a “composition for use in the treatment”. The former can only be infringed by manufacturers through inducing infringement, whereas the latter can be directly infringed by manufacturers through the manufacture of the composition for the purpose of treating the specified disorder. The Court held that such claims can be construed as claiming “vendible products” and therefore it is “arguable that a claim for a vendible product can be directly infringed by making, importing or stockpiling the product, even if no sales or use by a consumer have occurred”.

Takeaways

As parties continue to dispute the need for proof of direct vs. induced infringement in actions for pharmaceutical patent infringement, the Court’s reasons in this case should prove instructive when framing pleadings — including in actions under the new PM(NOC) Regulations, where the cause of action for infringement will typically be litigated before the generic comes to market. Although the Court did not construe the claims in issue on this motion, its willingness to distinguish between claims for “a composition for the treatment of a disorder” and claims for “the use of a compound for the treatment of a disorder” signals that parties should likewise distinguish between these types of claims in their pleadings and evidence.

The case is: Eli Lilly Canada Inc. v. Apotex Inc., 2019 FC 884

Federal Court refuses to permit reply evidence on validity issues in action under the PM(NOC) Regulations

By Colin Hyslop, Christopher A. Guerreiro and Kristin Wall on November 7, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

On a motion for leave to file reply expert reports, the Federal Court has reinforced the rule against case splitting and outlined the circumstances under which reply expert reports are permissible under the Federal Courts Rules. The Court concluded that none of the proposed reply reports put forward by Teva Canada Limited (Teva) in respect of patent validity issues were proper and dismissed the motion.

Background

This motion arose in the context of an action under subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations, relating to the drug INVEGA SUSTENNA (paliperidone). The plaintiffs, Janssen Inc. and Janssen Pharmaceutica N.V. (Janssen) alleged that Teva will infringe Canadian Patent No. 2,655,335 (the 335 Patent). In response, Teva brought a counterclaim seeking a declaration of invalidity.

As the plaintiff by counterclaim with respect to the validity of the 335 Patent, Teva served its expert reports on validity first. Following receipt of Janssen’s responding expert reports on validity, Teva moved for leave to serve three reply expert reports. On the motion, Teva argued that it was unable to fully appreciate Janssen’s position on the 335 Patent’s validity until it received Janssen’s responding expert reports.

This action was scheduled to go to hearing on September 30, 2019, but was adjourned until February 3, 2020.

Improper reply evidence excluded

In dismissing Teva’s motion, Manson J. applied the ordinary rules regarding the order of evidence in actions before the Federal Court. These include Rule 247(1) of the Federal Courts Rules, as well as common law rules that place limits on reply evidence. Justice Manson rejected the argument that there is any gap in the law with respect to reply evidence.

The general rule is that a plaintiff cannot split its case on reply. Proper reply evidence must relate to issues raised by the defendant’s responding case which were not raised in the plaintiff’s case in chief. Reply cannot be used to introduce evidence that simply confirms previous evidence, which could have been raised in chief but is invoked only to contradict the defendant’s evidence, or which solely seeks to rebut the defendant’s evidence. However, the Court retains discretion to admit evidence that should have formed part of the plaintiff’s case in chief.

In this case, Manson J. rejected the argument that Teva’s proposed reply reports addressed validity issues that it could not have anticipated when expert reports in chief were initially exchanged. Justice Manson held that every paragraph of the proposed reports was an attempt to either rebut or contradict Janssen’s expert evidence, or to bolster Teva’s own expert evidence by restating or clarifying positions taken in its reports in chief. Justice Manson also held that Teva could test various areas of disagreement with Janssen’s experts on cross-examination. Despite the delay in the trial date, Manson J. declined to exercise his discretion to permit any of the reply evidence.

Additional prior art added to pleading

Teva also sought leave to amend its pleading to add a number of alleged prior art references that were included in one of its proposed reply expert reports. Justice Manson granted this motion in order to ensure that the Court has a complete picture of the state of the art. Given the delayed trial date, Manson J. concluded that there was no prejudice to Janssen and that this prior art may be contextually relevant for cross-examination of the expert witnesses. As such, he permitted the amendment for that purpose only.

The case is: Janssen Inc. v Teva Canada Limited, 2019 FC 1309

Federal Court relies on foreign prosecution history in first application of file wrapper estoppel

By Colin Hyslop, Christopher A. Guerreiro and Brian R. Daley on October 6, 2019 Posted in Intellectual property

In CanMar Foods Ltd. v TA Foods Ltd., 2019 FC 1233, the Federal Court interpreted and applied the new file wrapper estoppel provision, section 53.1 of the Patent Act, RSC 1985, c P-4, for the first time. While CanMar is not a life sciences case, the application of Canada’s new file wrapper estoppel provision has implications for patentees generally.

In CanMar, the patentee contended that two elements of the claim at issue were non-essential. The Court reached the opposite conclusion by relying on prosecution history evidence admitted under section 53.1, and set out a test for the circumstances under which the Court will admit evidence from a foreign file wrapper under this provision. For a more detailed analysis of the Court’s analysis and findings, be sure to read our IP Monitor publication.

Government releases final amendments to the PMPRB’s Patented Medicines Regulations to lower the prices of patented medicines

By Christopher A. Guerreiro, Kristin Wall and Brian R. Daley on August 13, 2019 Posted in Intellectual property, Life sciences and healthcare, Pharmaceuticals and life sciences

The Government is moving forward with changes to the PMPRB intended to lower the prices of patented medicines in Canada in order to lay the foundation for National Pharmacare. The changes are set out in final amendments to the Patented Medicines Regulations that were released on Friday, August 9, 2019. The amendments will come into force on July 1, 2020.

Once the amendments come into force, the PMPRB will use a different basket of price comparator countries. Significantly, the new basket excludes the US. The PMPRB will also consider new pharmacoeconomic market size, and gross domestic product (GDP)-based factors in its price tests and require patentees to report prices net of confidential rebates.

Overview of the amendments

The final version of the amendments includes the same key changes and overall objectives as an earlier draft version published on December 2, 2017. Here is a summary of some of the notable features of the final amendments:

New factors for assessing excessive pricing.
- The PMPRB must consider three new factors when assessing excessive prices: (1) the medicine’s pharmacoeconomic value in Canada, (2) the size of the market for the medicine in Canada, and (3) the GDP and GDP per capita in Canada.
- These new factors do not apply to medicines that receive a drug identification number (DIN) before the day that the final amendments are published in Canada Gazette, Part II, which is expected to happen on Wednesday, August 21, 2019. All other features of the amendments apply to all patented medicines upon their coming-into-force.
New powers to collect information regarding the pharmacoeconomic factors.
- The amendments contain specific guidance regarding the triggers and timing for reporting cost-utility analyses and market size information.
- Cost-utility analyses need only be reported if the pro-rated cost of the medicine’s use over a 12-month period is greater than or equal to 50% of the GDP per capita in Canada.
New obligations to report price adjustments.
- The amendments expand the information that must be included when calculating average price per package and net revenue from sales for reporting in Form 2. These calculations will be required to factor in any price “adjustments that are made by the patentee or any party that directly or indirectly purchases the medicine or reimburses for the purchase of the medicine”.
- This new requirement is intended to include confidential third-party rebates paid to insurers under formulary listing agreements.
OTC and generic medicines to benefit from risk-based reporting.
- The amendments list the categories of medicine that benefit from reduced reporting requirements because they are considered to be a low risk for excessive pricing.
- The list now includes most non-prescription/over-the-counter drugs (including those containing controlled substances), veterinary medicines, and generic drugs (defined as those that were approved on the basis of an abbreviated new drug submission). However, non-prescription Schedule D drugs (e.g., non-prescription biologics) are excluded and remain subject to normal reporting requirements.
Revised international price comparators.
- The list of international comparator countries (previously known as the “PMPRB7”) is modified, deleting the United States and Switzerland while adding Australia, Belgium, Japan, the Netherlands, Norway, and Spain. France, Germany, Italy, Sweden, and the United Kingdom remain on the list, which is now being referred to as the “PMPRB11”.
- The final version omits the Republic of Korea, which had been proposed as a twelfth comparator country in the draft version of the amendments.

Update on the Guidelines

During technical briefings held on August 9, 2019, Health Canada and PMPRB officials stated that details regarding implementation of the amendments will be outlined in a revised set of Guidelines.

PMPRB officials indicated that a proposed set of revised Guidelines will be published for stakeholder consultation this fall. The revised Guidelines should be finalised prior to the amendments coming into force on July 1, 2020.

Officials also indicated that until the amendments come into force in 2020, the PMPRB will continue to apply the existing Guidelines.

Competition Bureau issues statement regarding off-label use of vaccines

By Kevin Ackhurst, Richard Wagner, David Yi and Pharma in Brief team on July 29, 2019 Posted in Life sciences and healthcare, Pharmaceuticals and life sciences

The Competition Bureau (Bureau) recently conducted a preliminary investigation into possible competition concerns arising from a proposal to include a clause in a procurement contract that would restrict off-label use of a vaccine. The Bureau concluded that there was no abuse of dominance as the provision was not included in the procurement contract; however, it issued a statement providing guidance on off-label use of vaccinations.

After outlining vaccine approval and reimbursement, and administration of immunization programs in Canada, the statement indicates that, while manufacturers are prohibited from selling or advertising vaccines for off-label use, off-label use can and does occur in the administration and delivery of health care. From the Bureau’s perspective, public health authorities may elect to use a vaccine off-label if it deems it appropriate.

The Bureau has identified the potential for abuse of dominance in certain circumstances, for example where a manufacturer attempts to restrict an off-label use when that use is in conjunction with a competitor’s product. The Bureau focused on conduct that may hinder a public health authority’s jurisdiction and discretion to administer its immunization programs in a way that would exclude competitors.

The Bureau will look to the underlying intent of the conduct in question when engaging in its analysis. The statement suggests that where the conduct is motivated by legitimate health concerns backed by scientific evidence rather than to exclude current or potential competitors, that the conduct may not contravene the Competition Act. The effect on competitors or potential competitors, and the scientific basis should therefore be considered when contemplating anything that could restrict the off-label use.

Health Canada consulting on clinical trial requirements and “new class” of advanced therapeutic products

By Christopher A. Guerreiro on July 24, 2019 Posted in Life sciences and healthcare, Pharmaceuticals and life sciences

As we reported, the Budget Implementation Act, 2019 (BIA) paved the way for changes to the regulation of clinical trials and created a new class of “advanced therapeutic products” (ATPs) regulated by Health Canada. Health Canada is consulting on what it should consider in developing regulations for clinical trials and implementing the approval pathway for ATPs until August 30, 2019.

Background

The BIA received Royal Assent on June 21, 2019. The changes to clinical trial regulation will come into force once new regulations are developed and implemented. While the ATP provisions from the BIA are now in force as part of the Food and Drugs Act, Health Canada is consulting on how to best implement them.

In the context of the consultation, Health Canada has published a discussion paper entitled Agile regulations for advanced therapeutic products and clinical trials (the Discussion Paper). This paper is premised on the idea that some Health Canada regulations for drugs and medical devices have not kept pace with innovation. The paper describes an “ambitious regulatory reform agenda” in order to accommodate highly complex technology while still protecting the health and safety of Canadians.

Clinical Trials

The Discussion Paper indicates that the current “one-size-fits-all” approach to clinical trials may discourage certain types of studies, and may poses challenges to small and medium sized companies. The intention of the new regulatory framework is to:

allow for new types of trials;
decrease cost for low-risk trials and regulate in proportion to risks; and
improve alignment with global partners and increase Canada’s competitiveness in attracting trials.

Health Canada intends to expand its focus in order to control the conduct of all parts of a clinical trial. It will expand the use of evidence gathered through trials. It will also give patients greater access to information on available clinical trials and to the results of these trials.

Health Canada also intends to expand the clinical trials framework to include studies of food for special dietary purposes (e.g., infant formula). Currently, it is not possible to conduct clinical trials with these foods in Canada.

Advanced Therapeutic Products

The Discussion Paper indicates that most products will continue to be regulated via one of the existing pathways, rather than as ATPs. The new ATP pathway is being created for exceptional circumstances where drugs or devices are “so novel, complex, and distinct that current regulations are not equipped to handle them” (e.g., gene editing).

Health Canada envisions a flexible pathway with a “concierge service” that provides a flexible, risk-based way to authorize products while protecting the health and safety of Canadians. Under the new pathway, Health Canada will consult with stakeholders and consider:

The risks and benefits associated with the product, and steps available to adequately manage and control these risks.
The extent to which the product is different from already approved drugs or devices.
The extent to which there are other appropriate controls in place, e.g., through provincial and territorial legislation.

ATPs will be authorized either by (1) licence (with associated terms and conditions) or (2) an order of permission (more suitable for lower-risk products). In both instances, Health Canada would aim to ensure that the ATP meets market licensing and health technology assessment requirements.

Consultation

The paper concludes by providing three questions to guide feedback:

What products would you want to put forward for consideration under the ATP pathway?
Can you suggest any good models of an enhanced client “concierge” service that would help companies wishing to be considered for the ATP pathway?
What recommendations do you have for creating clinical trials regulations that would attract clinical trials in Canada and be an effective model in the Canadian context?

A copy of the document can be requested from, and feedback can be provided to, hc.hpfb.engagement-mobilisation.dgpsa.sc@canada.ca.