Canada: Data Protection: Early Days

Canada amended its Data Protection Regulations in 2006, aiming to provide protection for "innovative drugs." This was Canada's second attempt to implement its 1994 NAFTA and TRIPS treaty obligations that require signatory member countries to protect data that is originated from considerable effort and required to be submitted for government approval. The current term of protection is eight years counting from the innovative drug's date of approval (notice of compliance) preventing others from making a direct or indirect comparison from receiving approval until expiry of that term. In addition, a pediatric six-month extension is available if certain criteria are met.

Under the Canadian system, a register of innovative drugs is maintained, listing all drugs that have been found by Health Canada to be eligible for protection. Protection is typically requested by the innovator during the regulatory submission process. Once found to be eligible, a product may lose protection if it is not marketed in Canada.

The Regulations have now survived a challenge to their validity. In December, 2010, a Federal Court of Appeal judgment upheld their validity (2010 FCA 334) with leave to appeal to the Supreme Court of Canada denied in July, 2011. In that case, the Regulations were found to be a valid exercise of power since their purpose was to encourage the development of new drugs which, inter alia constituted a valid public and safety purpose; and, further, they were aimed at ensuring that Canadians have reasonable access at reasonable prices, to new, safe and effective drugs rather than balancing commercial interests between innovators and generics.

While the Regulations have now been found constitutionally valid, there has since been a handful of cases under this new regime dealing with interpretation, aimed at determining the scope of "innovative drugs" covered by the Regulations, as well as status issues with respect to the innovative drug register.

"Innovative drug" is defined as a drug that contains a medicinal ingredient not previously approved in a drug by the Minister and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or a polymorph. As such, a drug is excluded from protection if it is previously approved or is a variation of a previously approved drug.

Two cases have dealt with the first exclusion, the "previously approved" exclusion, and have come to seemingly different results. In Epicept (2010 FC 956), data protection for CEPLENE was denied on the basis that while it was a "new drug," the medicinal ingredient was previously approved notwithstanding that the previous approvals were by DIN (Division 1), as homeopathic/over-the-counter drugs and not by NOC (Division 8), which applies to prescription drugs. An appeal was dismissed as moot since Epicept had withdrawn its underlying new drug submission. On the other hand, in Celgene (2012 FC 154, at paras 42-46), data protection for thalidomide was granted on the basis that it was a new drug. Since thalidomide was determined to be unsafe in 1962, the previous approval was withdrawn and the Court found that it did not operate to exclude thalidomide from data protection. An appeal on this case is pending. In yet another case, affirmed on appeal, a generic company sought to remove the data protection listing for ELOXATIN (2011 FC 507; 2012 FCA 106). Sales in Canada from another jurisdiction authorized under the Special Access Programme did not render ELOXATIN "previously approved."

In the Takeda case (2011 FC 1444), the Court considered the second exclusion from protection for "variations"and in particular, interpreted the group of five examples within the phrase "not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph." The Court denied protection to the enantiomer DEXILANT as a matter of law. Falling within one of the enumerated examples of variations was treated an automatic bar to data protection regardless of the nature and extent of the data necessary to be submitted to obtain approval. An appeal on this case is also pending.

In the ELOXATIN case, a further issue was the generic company's standing to challenge a product, listed on the Innovative Drug Register. The Court found that a generic company may be given standing to make submissions. The Court distinguished an earlier case which denied standing to the association of generic pharmaceutical manufacturers to challenge a listing by GlaxoSmithKline (2011 FC 465).

As such, while they have survived a validity challenge, it is still early days in considering the scope of the Regulations, eligibility criteria and what constitutes an "innovative drug."

One other ongoing development to be aware of is that, while Canada offers comparatively less protection than Europe and the U.S., international treaty negotiations are currently underway between Canada and the EU that implicate data protection. Depending on whether a final agreement is negotiated, it is possible that there may be changes to the scope and term of protection available for innovative drugs in Canada.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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