In a split decision, the majority of the Federal Court of Appeal dismissed Takeda's appeal and affirmed the Minister of Health's refusal to list DEXILANT (dexlansoprazole) on the Register of Innovative Drugs. The dissenting judge would have allowed the appeal, quashed the Minister's decision and remitted the matter back to the Minister for redetermination in accordance with the dissenting reasons.
Dexlansoprazole is one of the enantiomers of the previously approved racemate lansoprazole (currently marketed as PREVACID). The Minister held that dexlansoprazole was not eligible for listing on the Register because it was a variation that is specifically excluded from the definition of "innovative drug" in section C.08.004.1 of the Food and Drug Regulations, which reads:
"innovative drug" means 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 polymorph.
The majority of the Federal Court of Appeal agreed with the Minister that the language of the definition is clear and the five listed categories of substances are automatically considered variations of previously approved drugs. It held that the term "such as" introduced a non-exhaustive list of examples that aid in the interpretation of what constitutes a variation of a previously approved drug. It reasoned that it would be an "incoherent scheme" if the enumerated examples of variations were not variations in certain unarticulated circumstances.
The majority was supported in its interpretation by the Regulatory Impact Analysis Statement (RIAS) released concurrently with the data protection regulation, which stated that the non-exhaustive list of categories of substances was "meant to give examples of the types of variations not considered for protection." Furthermore, the majority concluded that the data protection regulations meet Canada's obligations under the North American Free Trade Agreement (NAFTA) and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). These obligations require that the Governor in Council consider what constitutes a "new chemical entity," and the majority held it was open to the Governor in Council to decide, as a matter of policy, that the five categories of substances were not sufficiently different to be "new chemical entities."
The dissent, on the other hand, held that the categories of substances are "examples of substances that may be 'variations,' depending on the circumstances, and invite special scrutiny." That "special scrutiny" is directed to the data submitted to get regulatory approval. An enantiomer — and therefore by extension a salt, an ester, a solvate or a polymorph — would not be a prohibited variation of a previously approved medicinal ingredient:
[i]f regulatory approval for the drug required the submission of confidential data generated by considerable effort – e.g., new and significant evidence bearing upon the safety and efficacy of the drug – and the medicinal ingredient in the drug is "new" in the sense that it has qualities of safety and efficacy materially different from a previously approved medicinal ingredient.
The dissent found that the term "such as" interjected uncertainty as to whether the five categories of substances were to be automatically considered variations. As a result of this uncertainty, the dissent considered the purpose of the data protection regulations, which it held was to encourage research and development in new medicines by protecting data created with considerable effort. Given that the data protection regulations were enacted further to Canada's obligations pursuant to NAFTA and TRIPS, the dissent considered these two international treaties as vital in shaping the interpretation of Canada's data protection regulations. It considered that the definition must embody the twin concepts of a "new chemical entity" and "considerable effort" in generating the data to support an application for drug approval. It concluded that the interpretation quoted above does so.
According to the dissent, an interpretation (such as that in the majority decision) that necessarily and absolutely excludes the five categories of substances as "variations":
- leads to results contrary to Canada's NAFTA and TRIPS obligations,
- puts Canada at odds with other significant jurisdictions, which do not have exclusionary carve-outs from data protection,
- creates incentives against the development of beneficial new drugs, and
- leaves many innovators without data protection.
Nevertheless, this is indeed how the majority decision interprets an "innovative product." To appeal the decision, Takeda would need to obtain leave from the Supreme Court of Canada.
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