Date: 19990519
Docket: A-679-98
CORAM: STONE, J.A.
ROTHSTEIN, J.A.
SEXTON, J.A.
BETWEEN:
BAYER INC.
Appellant
(Plaintiff)
- and -
THE ATTORNEY GENERAL OF CANADA and
THE MINISTER OF HEALTH
Respondents
(Defendants)
- and -
APOTEX INC. and NOVOPHARM LIMITED
Intervenors
Heard at Toronto, Ontario, Wednesday, May 19, 1999
Judgement delivered from the Bench at Toronto, Ontario, on Wednesday, May 19, 1999
REASONS FOR JUDGMENT OF THE COURT BY: ROTHSTEIN J.A.
Date: 19990519
Docket: A-679-98
CORAM: STONE, J.A.
ROTHSTEIN, J.A.
SEXTON, J.A.
BETWEEN:
BAYER INC.
Appellant
(Plaintiff)
- and -
THE ATTORNEY GENERAL OF CANADA and
THE MINISTER OF HEALTH
Respondents
(Defendants)
- and -
APOTEX INC. and NOVOPHARM LIMITED
Intervenors
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at Toronto, Ontario on Wednesday, May 19, 1999)
ROTHSTEIN, J.A.
INTRODUCTION
[1] This is an appeal from an order of Evans, J. dismissing the appellant's motion for summary judgment. At issue is the interpretation of subsection C.08.004.1(1) of the Food and Drug Regulations, C.R.C., c. 870, as amended. Subsection C.08.004.1.(1) provides:
| Where a manufacturer files a new drug submission, an abbreviated new drug submission, a supplement to a new drug submission or a supplement to an abbreviated new drug submission for the purpose of establishing the safety and effectiveness of the new drug for which the submission or supplement is filed, and the Minister examines any information or material filed with the Minister, in a new drug submission, by the innovator of a drug that contains a chemical or biological substance not previously approved for sale in Canada as a drug, and the Minister, in support of the manufacturer's submission or supplement, relies on data contained in the information or material filed by the innovator, the Minister shall not issue a notice of compliance in respect of that submission or supplement earlier than five years after the date of issuance to the innovator of the notice of compliance or approval to market that drug, as the case may be, issued on the basis of the information or material filed by the innovator for that drug. |
Lorsque le fabricant dépose une présentation de drogue nouvelle, une présentation abrégée de drogue nouvelle ou un supplément à l'une de ces présentations en vue de faire déterminer l'innocuité et l'efficacité de la drogue nouvelle qui en est l'objet, et que le ministre examine les renseignements et le matériel présentés, dans une présentation de drogue nouvelle, par l'innovateur d'une drogue contenant une substance chimique ou biologique dont la vente comme drogue n'a pas été préalablement approuvée au Canada et s'appuie sur les données y figurant pour étayer la présentation ou le supplément du fabricant, il ne peut délivrer un avis de conformité à l'égard de cette présentation ou de ce supplément avant l'expiration du délai de cinq ans suivant la date à laquelle est délivré à l'innovateur l'avis de conformité ou l'approbation de commercialiser cette drogue, selon le cas, d'après les renseignements ou le matériel présentés par lui pour cette drogue. |
| OVERVIEW |
| [2] Public safety requires that the government approve the marketing of pharmaceutical products. Because of required government approval, there must be disclosure of confidential information by manufacturers of such products to the government. Such confidential information is contained in the New Drug Submission (NDS) of the innovator of the product. It will include detailed reports of safety tests and substantial evidence of the clinical effectiveness of the new product.1 |
[1] Where a manufacturer of a new drug is not the innovator but is a competitor of the innovator, that competing manufacturer may file an Abbreviated New Drug Submission (ANDS) comparing its product with the innovator's product where the two products are pharmaceutically equivalent and bioequivalent. In the case of a competitor's product which is being compared with the innovator's product, safety tests and evidence of clinical effectiveness may not be required as the safety and effectiveness may be demonstrated by comparison with the innovator's product.1
[1] The issue is whether, when a competitor of an innovator seeks approval of the safety and effectiveness of its product by comparing it with the innovator's product, there is examination and reliance by the Minister on the confidential detailed safety reports and evidence of clinical effectiveness originally filed by the innovator with the government. If so, the innovator will be entitled to at least five years of protection from competition.
Interpretation of subsection C.08.004.1(1)
[2] The appellant's argument is that whenever a subsequent manufacturer (herein a "generic manufacturer", although it could also be a brand name competitor of the innovator), files an ANDS for the purpose of establishing the safety and effectiveness of its product by comparing its product with an innovator's product on the basis that its product is the pharmaceutical and bioequivalent of the innovator's product, the Minister must explicitly or implicitly have examined and relied upon confidential information originally filed by the innovator with the Minister in its NDS for its Notice of Compliance.
[3] The appellant says that on this interpretation of subsection C.08.004.1(1), the Minister may not issue a Notice of Compliance to the generic manufacturer earlier than five years after the date of issuance of the Notice of Compliance to the innovator for its product. Evans, J. rejected this interpretation of the regulation. We are in agreement with his detailed and persuasive reasons and add the following only to address the specific arguments made before this Court.
[4] When a generic manufacturer files an ANDS, the safety and effectiveness of the generic product may be demonstrated by showing that the product is the pharmaceutical and bioequivalent of the innovator's product. If the generic manufacturer is able to do so solely by comparing its product with the innovator's product which is being publicly marketed, the Minister will not have to examine or rely upon confidential information filed as part of the innovator's NDS. In such case, the minimum five year market protection referred to in the regulation will not apply.
[5] On the other hand, if, in order to be satisfied of the safety and effectiveness of the generic product, the Minister examines and relies upon information filed by the innovator in its NDS, the minimum five year market protection for the innovator will apply. This is because the safety and effectiveness of the generic product will only be established by reference to confidential information provided to the Minister by the innovator. It is only this use of that confidential information by the Minister on behalf of the generic manufacturer that gives rise to the minimum five year protection from competition for the innovator.
[6] The appellant says that whenever an ANDS is filed by a generic manufacturer comparing the generic product with the innovator's product, the Minister must implicitly be examining and relying upon the confidential information filed by the innovator in its NDS. We do not read subsection C.08.004.1(1) in this way. To do so would be to interpret it as invariably providing a minimum five years of market protection to an innovator when an ANDS is filed by a generic manufacturer. Rather, the regulation contemplates that the Minister may or may not examine and rely upon confidential information filed by the innovator. The appellant's argument reads out of the regulation the option given to the Minister as to whether or not to examine and rely on the confidential information filed by the innovator.
[7] The Regulatory Impact Analysis Statement accompanying the amended regulations at issue provides a further indication that the intention of the regulation is that the confidential information filed by the innovator may or may not be examined and relied upon. The statement reads in part:
| In the case where the Drugs Directorate intends to rely on the data of the innovator to support safety and efficacy claims, and this would result in a delay in the issuance of the NOC, the Drugs Directorate will notify the second-entry manufacturer in advance of the review. The Drugs Directorate will give the second-entry manufacturer the option of supplying additional information to support the claim without relying on the data previously submitted by the innovator. If the manufacturer wishes to supply the required information directly, in accordance with the policy on management of information, the manufacturer will avoid the application of this provision. |
Dans le cas où la Direction des médicaments a l'intention de se fonder sur les données de l'innovateur pour appuyer les allégations concernant l'innocuité et l'efficacité du produit et où cela entraînerait un retard dans l'octroi de l'avis de conformité, la Direction des médicaments en informera le fabricant du produit générique avant l'examen. La Direction des médicaments offrira au fabricant du produit générique la possibilité de fournir d'autres données à l'appui des allégations et ne se fondera pas sur les données déjà soumises par l'innovateur. Le fabricant aura le loisir de fournir directement les renseignements demandés, conformément à la politique sur la gestion de l'information; il se soustraira ainsi à l'application de cette disposition. |
[8] The government's policy appears to be that where the Minister intends to rely on data of the innovator to support the safety and efficacy claims of the generic manufacturer, thereby giving rise to the minimum five year protection from competition for the innovator, the generic manufacturer will be given the option of supplying additional information in order to avoid the Minister relying on information supplied by the innovator. If the generic manufacturer takes this option and satisfies the Minister, there will be no examination or reliance on the innovator's information and the minimum five year protection from competition will not apply. The appellant's interpretation would preclude this option to the generic manufacturer.
[9] As Evans, J. pointed out, the appellant's argument would require that the Court read into the regulation the word "indirectly" or some other modifier to capture the idea that whenever a generic manufacturer files an ANDS comparing its product to an innovator's product, that there is implicit examination and reliance on the confidential information previously submitted by the innovator in its NDS. The Court cannot read words into the regulation.
[10] The regulation provides for a sequential process; first, the filing of the ANDS by the generic manufacturer; second, and after the filing of the ANDS, examination of the information filed by the innovator; and third, reliance by the Minister on that information in issuing a Notice of Compliance to the generic manufacturer. Only if all three steps are applicable, does the minimum five year market protection provided by the regulation apply. There is no implied examination or reliance.
Is subsection C.08.004.1(1) consonant with sections 5 and 6 of Article 1711 of the NAFTA?
[11] The appellant argues that subsection C.08.004.1(1) was enacted because of the requirement of Article 1711 of the North American Free Trade Agreement of December 17, 1992 and that subsection C.08.004.1(1) must be interpreted in a manner consonant with the NAFTA. Article 1711 is entitled "Trade Secrets". Sections 5 and 6 of Article 1711 provide:
| 5. If a Party requires, as a condition for approving the marketing of pharmaceutical or agricultural chemical products that utilize new chemical entities, the submission of undisclosed test or other data necessary to determine whether the use of such products is safe and effective, the Party shall protect against disclosure of the data of persons making such submissions, where the origination of such data involves considerable effort, except where the disclosure is necessary to protect the public or unless steps are taken to ensure that the data is protected against unfair commercial use. |
| 6. Each Party shall provide that for data subject to paragraph 5 that are submitted to the Party after the date of entry into force of this Agreement, no person other than the person that submitted them may, without the latter's permission, rely on such data in support of an application for product approval during a reasonable period of time after their submission. For this purpose, a reasonable period shall normally mean not less than five years form the date on which the Party granted approval to the person that produced the data for approval to market its product, taking account of the nature of the data and the person's efforts and expenditures in producing them. Subject to this provision, there shall be no limitation on any Party to implement abbreviated approval procedures for such products on the basis of bioequivalence and bioavailability studies. |
Section 5 requires that Canada protect against the disclosure of undisclosed test or other data submitted for the purpose of determining whether the use of a product is safe and effective when the origination of the data involves considerable effort. Section 6 provides that with respect to such confidential data, no person other than the person submitting the data shall rely on that confidential data in support of an application for product approval for a reasonable period of time i.e. normally not less than five years. Subject to this requirement, there is no limitation on Canada implementing an abbreviated approval procedure on the basis of bioequivalence and bioavailability studies.
[12] The NAFTA provisions are intended to protect trade secrets. If the generic manufacturer exercises the option of having the Minister examine the confidential information filed by the innovator in support of its application for a Notice of Compliance, it is, in effect, relying on that information within the meaning of section 6 of Article 1711. It is apparent that if confidential data is not relied upon, the trade secrets provisions of the NAFTA are not applicable. Specifically, if a generic manufacturer is able to establish the safety and effectiveness of its product on the basis of bioequivalence or bioavailability studies without the Minister having to examine and rely upon confidential data filed by the innovator, there is no reason or justification for the minimum five year protection from competition. This interpretation of subsection C.08.004.01(1) is consonant with section 5 and 6 of Article 1711 of the NAFTA.
Distinction between patent protection and trade secret protection
[13] Appellant's counsel concedes that subsection C.08.004.1(1) is not a provision that provides patent protection, but that is indeed the essence of his argument. If a generic manufacturer compares its product to an innovator's product solely on the basis of public information, providing the innovator with protection from competition for a minimum of five years is tantamount to granting it the protection a patent would provide. Put another way, even if the Minister did not examine and rely on the innovator's confidential information, the innovator would be entitled to the minimum of five years protection from competition. The words of subsection C.08.004.1(1) cannot be construed to yield such a result.
[14] Subsection C.08.004.1(1) of the Food and Drug Regulations and Article 1711 of the NAFTA deal with confidential information or trade secrets, a concept separate and distinct from patents. It is understandable that an innovator should not have to face immediate competition from a competitor based on the competitor being able to produce a product using proprietary confidential information of the innovator. Section 5 of Article 1711 of the NAFTA calls this "unfair commercial use" of the confidential data. That "unfair commercial use" is restricted by subsection C.08.004.1(1) even in the absence of a patent protecting the innovator's product from competition. Obviously, where there is no commercial use of confidential data, subsection C.08.004.1(1)and Article 1711 do not provide or require that the innovator be protected from competition because no confidential information or trade secrets are being examined or relied upon in bringing the generic product to the market.
CONCLUSION
[15] Subsection C.08.004.1(1)and sections 5 and 6 of Article 1711 of NAFTA are responsive to the requirement on innovators of pharmaceutical products of having to disclose confidential proprietary information to the government. They provide for the use of that confidential or trade secret information by the government on behalf of the generic manufacturer and when that occurs, the minimum five year protection from competition for the innovator applies. Where the government does not use that confidential or trade secret information on behalf of the generic manufacturer, the provision is not applicable.
[16] The appeal will be dismissed.
"MARSHALL E. ROTHSTEIN"
J.A
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-679-98
| STYLE OF CAUSE: BAYER INC. |
Appellant
(Plaintiff)
| - and - |
| THE ATTORNEY GENERAL OF CANADA and |
| THE MINISTER OF HEALTH |
Respondents
(Defendants)
| APOTEX INC. and NOVOPHARM LIMITED |
Intervenors
| DATE OF HEARING: MAY 19, 1999 |
| PLACE OF HEARING: TORONTO, ONTARIO |
REASONS FOR JUDGMENT
| OF THE COURT BY: ROTHSTEIN, J.A. |
Delivered at Toronto, Ontario
on Wednesday, May 19, 1999
| APPEARANCES: Mr. Ronald E. Dimock |
| Ms. Michelle Wassenaar |
For the Appellant
(Plaintiff)
| Mr. F. B. (Rick) Woyiwada |
For the Respondents
(Defendants)
SOLICITORS OF RECORD:
DIMOCK STRATTON CLARIZIO
20 Queen Street West, Suite 3202, Box 102
Toronto, Ontario
M5H 3R3
For the Appellant
(Plaintiff)
Morris Rosenberg
Deputy Attorney General
For the Respondents
(Defendants)
HAZZARD & HORE
141 Adelaide Street West, Suite 1002
Toronto, Ontario
M5H 3L5
For the Interveners
FEDERAL COURT OF APPEAL
Date: 19990520
Docket: A-679-98
BETWEEN:
BAYER INC.
Appellant
(Plaintiff)
- and -
THE ATTORNEY GENERAL OF CANADA and THE MINISTER OF HEALTH
Respondents
(Defendants)
APOTEX INC. and NOVOPHARM LIMITED
Intervenors
REASONS FOR JUDGMENT
OF THE COURT
__________________
1 Paragraphs C.08.002(2)(g) and (h).
2 Paragraphs C.08.002.1(1)(a) and (b) and paragraph C.08.002.1(2)(a) and (c).