Canada: Federal Court Of Appeal Considers Data Protection Provisions…Again

The recent decision of the Federal Court of Appeal (FCA) in Minister of Health v. Celgene Inc. (Celgene) marks the second split decision of that court in as many months on the data protection provision of the Food and Drug Regulations (the FDR).

Our previous bulletin, Closer Than They Appear: Federal Court of Appeal Considers Definition of "Innovative Drug", reported on the decision of the FCA in Takeda Canada Inc. v. The Minister of Health (Takeda), denying data protection for Takeda's DEXILANT drug on the ground that it did not qualify as an "innovative drug". Although the FCA in Celgene considered a different aspect of the definition of "innovative drug", data protection was also denied on the ground that the product at issue in that case did not fall within the definition.


The question in the Celgene appeal was whether Celgene's THALOMID drug falls within the definition of an "innovative drug" in the FDR. Under the FDR, an innovative drug, once approved by the Minister of Heath (the Minister) by way of a Notice of Compliance (NOC), is listed on the Register of Innovative Drugs (the Register).

Under the FDR, an approved drug that is listed on the Register benefits from a period of market exclusivity for eight years starting from the date of approval. During that period, a generic manufacturer may not obtain an NOC to market a drug based on the data filed with Health Canada for approval of the innovative drug.

In the FDR, an "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 polymorph" [emphasis added].


In the Federal Court of Canada (FCC), Celgene challenged the Minister's decision not to list THALOMID on the Register. The FCC considered whether the prior approval of thalidomide in the early 1960s constituted an approval within the definition of "innovative drug" in the FDR. Shortly after its first approval in November 1960, thalidomide was withdrawn from the Canadian market in April 1962 due to the determination that the drug caused serious side effects, most significantly severe birth defects.

The FCC held that THALOMID was an "innovative drug" and should be listed on the Register and benefit from the eight years of data protection. The FCC looked at the purpose and intent of the FDR to encourage innovation and the development of new drugs, and found that Celgene had taken a compound that had been banned and had produced entirely new data showing that the drug could be useful and potentially lifesaving under the right circumstances.

The FCC further held that to deny data protection in this case would be inconsistent with Canada's international treaty obligations under the North American Free Trade Agreement and the Agreement on Trade-Related Aspects of Intellectual Property Rights. For further discussion of the FCC decision, please see our October 2012 Blakes Bulletin on Life Sciences: I Want a New Drug: Developments in Data Protection for Innovative Drugs.


In a split decision, the FCA reversed the FCC and held that THALOMID does not qualify as an "innovative drug." Celgene argued that the word "approved" refers to the status of the drug at the time the request for approval of the drug is submitted by the innovator, effectively interpreting the term "previously approved" as "currently approved". Writing for the majority, Justice Gauthier held that the words did not lend themselves to this interpretation and further disagreed with Celgene's argument that such an interpretation was consistent with the intention of the FDR and the relevant treaty provisions. Justice Gauthier applied a literal interpretation of the term "previously approved".

Justice Gauthier stated that the legislators clearly intended to avoid any duplication of the market exclusivity period and that, while there may be no such duplication in this case, this would not necessarily be true if Celgene's interpretation of the term "previously approved" to mean "currently approved" were applied in all cases. She also noted that Celgene's interpretation could apply to any drug which had been withdrawn because of a Minister's decision or even to a drug that was voluntarily withdrawn. While Justice Gauthier acknowledged the exceptional history of thalidomide, she found that this history did not provide sufficient basis to create an exception in the interpretation of the FDR.

Justice Nadon dissented from the majority and would have dismissed the appeal and upheld the decision of the FCC to grant data protection. Like the majority, Justice Nadon focused on the interpretation of the term "previously approved". However, he held that the circumstances surrounding the revocation of thalidomide's approval and removal from the Canadian market in 1962 amounted to a "nullification" of the previous approval so that thalidomide was not "previously approved" and was eligible for data protection.

Although Justice Nadon would have upheld the decision of the FCC, he explicitly distanced his view from the reasoning of the FCC. Specifically, while he found that the FCC's focus on the purpose and intent of the data protection regime was "helpful, and concurrent in result", it was not determinative of his holdings on appeal since his position could be supported merely by a proper interpretation of "previously approved".

Nonetheless, Justice Nadon's reasons do consider the purpose and intention of the data protection regime. In particular, he highlighted that, given thalidomide's revoked approval, there was no product available to serve as a reference product for THALOMID. As such, Celgene was required to prepare and submit the voluminous data required to support a New Drug Submission rather than the Abbreviated New Drug Submission that a generic manufacturer would be able to submit. Justice Nadon found that this bolstered the rationale for extending data protection to THALOMID.

Justice Nadon's strong dissent in this case follows the dissent of Justice Stratas in the Takeda case. Although the cases focused on different aspects of the definition of "innovative drug", in both cases the majority decision held that the literal meaning of the definition was clear. Although both majority decisions considered the purpose of the legislation, including compliance with Canada's international treaty obligations, the decisions turned on the view that the wording of the statutory provision was, on its face, unambiguous.

The dissenting justices in each case, while not expressly adopting a different approach to the interpretation of the statute, appeared to give greater weight to the underlying purpose and context of the statutory provisions and would have adopted an approach that would have more specifically taken into account the amount of time, effort and resources expended by the drug manufacturers when deciding whether to extend data protection.

The majority decisions in these cases, which emphasize the literal interpretation of the statutory provisions, clearly set the precedent for future cases dealing with the data protection regime in the FDR. However, the strong dissents in these cases do illustrate that some uncertainty may still exist when interpreting these provisions.

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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