Canada: Pharmacapsules@Gowlings – February 2006

Last Updated: March 23 2006

Edited by Adrienne Blanchard and Jennifer Wilkie


  • Transfer Pricing Issues
  • Quebec Denies Certification Of Pharmaceutical Class Action
  • PMPRB Announces Increased Enforcement Activities
  • Cancer Drug Access And The Canada Health Act
  • Proposed Changes To U.S. Patent Rule Not Welcomed By Biotech Industry
  • Online Pharmacists Seek Clean Slate With New Conservative Government
  • Release Of Draft Guidance Document For Drug Submissions In Electronic Format
  • Recent Cases

Transfer Pricing Issues

Possible consequences of several recent changes (particularly those in Canada) to the allowed profitability of R&D activities are considered by Dr. Jamal Hejazi, member of the Gowlings Transfer Pricing Goup, in the article, "Transfer Pricing Within the North American Pharmaceutical Industry: Has There Been a Structural Shift in Risk?". Considering the focus on the alleged profitability of e.g. marketing and distribution activities, Dr. Hejazi states his reasons for fearing that the high returns for R&D activities, needed to make their business a success, are being diminished.

The full text of the article can be seen on Gowlings website.

For more information on transfer pricing issues, please contact Gowlings' Chief Economist, Jamal Hejazi Ph.D.

Quebec Denies Certification Of Pharmaceutical Class Action

On January 17, 2006, the Quebec Superior Court refused to authorize a class action in a case that was brought based on information reported in an article printed in La Presse. Justice Roy held that despite the amendments made in 2003 to the Code of Civil Procedure (CCP) intended to reduce the criteria for instituting a class action suit, there is still a minimal factual foundation that must be demonstrated to a Court before it can authorize a class action.

The case began in February 2003, when a proposed class action was filed against several generic pharmaceutical manufacturers for allegedly giving out "illegal" rebates and other benefits to pharmacists in Quebec and other provinces. The suit was based on information contained in La Presse.

Justice Roy's decision re-establishes a balance between the amendments to the CCP in January 2003, which lessen a petitioner's burden to provide evidence in support of a certification motion, and the requirement to include precise and sufficient facts to allow a Court to determine whether the requirements for instituting a class action have been meet.

For more information, please see:

Also, please see the judgment in Option Consommateurs et al. c. Novopharm Ltd. et al., 2006 QCCS 118 (in French)

PMPRB Announces Increased Enforcement Activities

The PMPRB signalled in its January 2006 Newsletter that there will be increased enforcement activities. As recent evidence of this, one can point to the hearing notices that issued in respect of two drugs during the month of January.

The January 2006 Newsletter also reviews the Federal Court decision in Hoechst Marion Roussel Canada Inc. v. Attorney General of Canada. The Federal Court held that, as a patent application only gives rise to a potential grant of a patent, the PMPRB is not authorized to assert jurisdiction over a medicine until a patent is issued. However, the PMPRB comments in its newsletter:

"Patentees will be interested to know that the HMRC decision does not affect the Board's present policy on patent pending, which is to assert jurisdiction retroactively to review the price at which the medicine was sold during the pre-grant infringement period, once the patent issues".

The January 2006 Newsletter also reports on:

  • the PMPRB's new initiative to monitor and report on non-patented drug prices; and
  • voluntary compliance undertakings that were accepted in the last quarter relating to two separate drugs

To access the Newsletter, please see:

Cancer Drug Access And The Canada Health Act

In its Annual Report Card, the Cancer Advocacy Coalition of Canada (CACC) examined cancer drug access across Canada, posing the question does cancer drug treatment comply with the principles of the Canada Health Act, namely, universality, comprehensiveness, accessibility, portability and public administration.

The Canada Health Act mandates coverage of hospital and physician services but not drug coverage. Historically, when cancer treatment consisted of in-patient chemotherapy and radiation, treatment was covered under hospital budgets. As a result of the shift of cancer treatment from an in-patient to an out-patient environment, each province has employed its own process for providing for cancer drug treatments. These include payment through cancer agency and hospital budgets, provincial and private insurance plans, patient payment options and pharmaceutical company sponsored payment assistance programs.

In its study, the CACC identified 24 recently approved drugs, along with evidence supporting their use, and then assessed the availability of these drugs in each province. The results ranged from 21 of the 24 drugs being approved for funding in British Columbia to only 4 of the drugs being approved for funding in Prince Edward Island. Ontario, Alberta and Quebec had approved funding for 6, 7, and 14 of the drugs respectively. In addition to the drugs approved for funding, all of the provinces also allowed some type of limited access to at least one additional drug, to a maximum of 13 of the 24 drugs in Ontario.

The authors conclude that "evaluated on the guiding principles of the Canada Health Act, new cancer drugs are not accessible to all patients that require them, or universal in their coverage, or comprehensive in their integration with other cancer treatments, or portable from province to province, or even publicly funded."

To ensure more timely access to cancer drug treatments, the CACC has issued recommendations which include:

- establishing a national catastrophic drug strategy;
- developing Canadian wide guidelines for cancer drug treatment;
- increasing research to establish which patients would best benefit from new therapies; and
- incorporating patient choice into decision-making.

The CACC Report Card 2005 is available at:

Proposed changes to U.S. Patent rule not welcomed by biotech industry

Although the proposed amendments to the U.S. federal patent rules may alleviate the backlog of patent applications waiting review by examiners, biotech leaders warn that these amendments will have a crippling effect on their industry. The new rule seeks to limit the number of continuation applications to one, as well as limit the number of claims for any subsequent applications to 10.

According to Todd Gillenwater, vice-president of public policy at the California Healthcare Institute, the proposed amendments may result in devastating consequences. "The biotech patent process not only concerns the product itself but also the process to make the product. As you go through 12-15 year cycle, you learn matters about the product, process and its ultimate application – all would require revisiting that application. If you restrict continuing applications, it will force the industry to file overly broad patents to catch everything."

Advocates for the changes state that the amendments will reduce the backlog at the U.S. Patent Office as well as address the issue of abuse in the present patent system. "Continuous applications are sometimes used by less scrupulous companies to claim competitors' technologies in add-on filings while maintaining their priority date on the invention, a practice referred to in the industry as a "submarine patent".

For more information, please see:

Online Pharmacists Seek Clean Slate With New Conservative Government

Having lived for over a year in fear of a crackdown on cross-border trade by the previous Liberal government, the online pharmacy industry is looking forward to starting anew with the newly elected Conservative government.

There remains concern, however, that the newly elected government will not give the issue the same priority as the previous Liberal government.

Just prior to the fall of the previous Liberal government, former health minister Ujjal Dosanjh introduced a bill that was also supported by the Conservatives which that would provide the ability to ban the bulk export of drugs to the U.S.

For more information, please see:

Release Of Draft Guidance Document For Drug Submissions In Electronic Format

By a notice dated January 25, 2006, Health Canada has released a draft guidance document for comment within a 60 day consultation period. The guidance document will assist sponsors in the preparation of drug submissions in the electronic Common Technical Document (eCTD) format developed by the ICH of Technical Requirements for Registration of Pharmaceuticals for Human Use.

The document defines three types of filing formats for drug submissions in eCTD format: co-submission, hybrid submission and electronic-only submission. It also contains information on pilot implementation of the hybrid filing format set to begin on June 30, 2006. It is indicated that the guidance document reflects comments received from stake-holders, including industry representatives, and is expected to be modified upon completion of the 60 day consultation and further, that there may be subsequent iterations of the draft.

Since September 1, 2004, Health Canada has accepted submissions in the eCTD format along with full paper based submissions (known as a co-submission format of filing). At this stage, Health Canada is entering into a transition plan that will eventually accept submissions in the electronic only submission format.

Any comments or questions regarding the draft guidance document should be submitted no later than March 31, 2006.

For information please see the following link:

Recent Cases

Syntex Pharmaceuticals International Limited v. Canada, December 12, 2005, s. 8 proceeding

- the defendant appealed an order striking out a third party notice joining the Crown as a third party to the plaintiff's claim for damages under s. 8 of the NOC Regulations.

- the Court of Appeal held that there could be a claim in negligence against the Crown and proof of a statutory breach that causes damages may be evidence of such negligence, however, the defendants have not properly plead a valid cause of action in negligence

- thus, the appeal was allowed, and although the current pleading was struck, leave was granted to file an amended third party notice.

For the text of this decision, please see:

AstraZeneca AB v. Apotex Inc., January 18, 2006, s. 55.2 proceeding

- prohibition denied

- the Applicant argued issue estoppel in relation to the respondent's formulation, however, as this issue was not plead in the Notice of Application, the argument was rejected.

- after construing the patent, it was determined that the respondent's tablets would not infringe.

- the invalidity allegations were not considered by the Court.

For the text of this decision, please see:

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions