Canada: Canada Amends Regulations Governing Generic Drug Approval Process

Last Updated: November 23 2006

Article by Anthony Prenol, © 2006, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Intellectual Property, November 2006

The Canadian government has announced substantial amendments to the Patented Medicines (Notice of Compliance) Regulations (the NOC Regulations) and the Food and Drug Regulations (the FD Regulations) that will significantly alter the nature of litigation between innovator and generic drug companies.


The NOC Regulations were initially implemented by the Canadian government in 1993, at the same time that the government abolished the specific compulsory licensing scheme that had been in place for patented pharmaceuticals for many years and also enacted an early-working exception.

The NOC Regulations link the ability of the Minister of Health (the Minister) to approve the marketing of a generic drug through the issuance of a Notice of Compliance (NOC) with the patent status of the equivalent innovative drug product. More particularly, a generic manufacturer which compares its product with a patented, innovative drug must either await the expiry of the innovator’s patents before obtaining its NOC or make an allegation of non-infringement or invalidity that is either not disputed by the innovator or is upheld by a court.

If an innovator commences court proceedings for an order prohibiting the Minister from issuing an NOC to a generic manufacturer (NOC proceedings or prohibition proceedings), the NOC Regulations provide for a stay of up to 24 months, which can be extended or abridged by court order, before the Minister can issue an NOC. The purpose of this stay is to allow sufficient time for the innovator’s prohibition proceeding to be heard by the court.

Since their inception, the NOC Regulations have been the subject of extensive litigation and lobbying by both sides of the pharmaceutical industry and also by public interest groups. While previous amendments to the NOC Regulations brought clarity to certain matters, they also led to more litigation as innovators and generic manufacturers disputed the meaning of various amended provisions.

In making the recent amendments to the NOC Regulations, the Canadian government appears to have a number of goals in mind. First, it is attempting to address concerns that have been raised by innovators and generic manufacturers in recent years regarding certain provisions of the NOC Regulations that each group regards as unfair. Second, it is seeking to effectively reverse interpretations given by the courts to various provisions of the NOC Regulations in circumstances where the government either disagrees with the courts’ interpretation or acknowledges that deficiencies in the drafting of the NOC Regulations were responsible for these rulings. Third, the amendments seek to strike a balance between prevention of patent infringement and facilitation of the entry of generic drugs into the marketplace where no infringement exists.

Patent Register

At the heart of the NOC Regulations is the patent register maintained by the Minister. Generic manufacturers must satisfactorily address patents listed on the register for the equivalent innovative drug before they can obtain an NOC.

Generic manufacturers have long complained that the NOC Regulations permit innovators, when obtaining an NOC for a drug, to list patents on the register that do not bear much, if any, relationship to the drug for which approval is granted by the innovator’s NOC. These patents can then be used by the innovator to delay or prevent a generic manufacturer from obtaining an NOC. Innovators have, in turn, complained that the NOC Regulations unfairly limit the types of patents that can be listed and permit a generic manufacturer to make multiple and frivolous allegations concerning a drug.

Eligible Patents

In response to the innovators’ concerns, the amendments to the NOC Regulations have expanded the types of patents that can be listed on the register. Previously, the only patents that were eligible to be listed on the register were those that contained claims to the medicine itself or to the use of the medicine. As a result of the amendments to the NOC Regulations, a patent is now eligible to be listed in connection with a New Drug Submission (NDS) if it contains one or more claims for: (i) the approved medicinal ingredient; (ii) the approved formulation containing that medicinal ingredient; (iii) the approved dosage form; or (iv) an approved use of the medicinal ingredient.

These amendments are not intended to change the preexisting situation which enables product-by-process patents and patents for biologic drugs and polymorphs to be listed. Patents claiming processes, intermediates or metabolites of the medicinal ingredient remain ineligible for listing.

At the same time that the government is broadening the types of patents that are eligible for listing on the register, it is also placing a limitation on when an eligible patent can be listed. More particularly, the amendments to the NOC Regulations provide that the medicinal ingredient, formulation, dosage form or use claimed in the patent sought to be listed must have been approved through the issuance of an NOC in respect of the NDS in question.

Dosage Form Patents

The Regulatory Impact Analysis Statement (RIAS) that accompanied the amendments to the NOC Regulations explains that the intent behind the inclusion of dosage form patents in the list of eligible patents is to provide protection for novel delivery systems by which the approved medicinal ingredient or a formulation containing that ingredient is administered to the patient. The RIAS gives as examples controlled-release tablets and capsules, implants and transdermal patches. The RIAS also cautions, however, that, to be listed, a patent must include a claim to the specific dosage form described in the NDS and must also contain a claim that includes within its scope the approved medicinal ingredient. Therefore, a patent directed solely to a device, such as an intravenous stand or syringe, would not meet the definition of "dosage form" and hence would remain ineligible for listing.

Eligible Submissions

In the past, there were many cases involving the issue of when a supplemental new drug submission (SNDS) could permit an innovator to list a patent on the register. The amendments provide that, if the innovator has filed a patent application prior to its SNDS, it can submit that patent for inclusion on the register in respect of that SNDS, provided that the purpose of the SNDS is to obtain approval for a change in use of the medicinal ingredient, a change in formulation or a change in dosage form and that the patent contains a claim to the formulation, dosage form or use so changed.

As always, an innovator must submit its patent list either with the specific NDS or SNDS to which its patent relates or within 30 days after the issuance of the patent, provided that the Canadian filing date of its patent application precedes the filing date of its submission.

None of the above amendments apply to patents that were on a patent list submitted to the Minister prior to June 17, 2006.

Frozen Patent Register

One of the most significant complaints by generic manufacturers has been that innovators "evergreen" their patents by listing improvement patents on the register during the pendency of NOC proceedings so as to result in successive 24-month stays.

This concern is addressed in the amendments to the NOC Regulations by requiring a generic manufacturer only to address patents that were listed on the register in respect of the innovative drug as of the filing date of the submission by the generic manufacturer for an NOC. As such, the register is effectively frozen during the pendency of the generic manufacturer’s regulatory submission.

The following transitional provisions apply in respect of the above measures. In the case of submissions filed by generic manufacturers on or after October 5, 2006, the changes apply with full effect. In the case of submissions filed by generic manufacturers prior to October 5, 2006, the date of filing of the generic’s submission is deemed to be October 5, 2006 such that the generic manufacturer will not have to address any patents that are added to the register on or after that date.

Timing Of Generic Manufacturer’s Challenge

A generic manufacturer will no longer be permitted to commence the process for challenging a patent under the NOC Regulations through a notice of allegation until it has filed a submission for an NOC.

Infringement Of Use Patents

The amendments seek to clarify the situation where an innovator asserts a patent with claims to a specific use against a generic manufacturer who has filed a submission for an NOC seeking approval to market the drug for a non-patented use. The amendments and the RIAS clarify that, in the case of use patents, a court should limit its inquiry to whether acts of infringement will occur by or at the behest of the generic manufacturer. In other words, it is not sufficient for the innovator to show that third parties, such as pharmacists, may infringe the innovator’s patent by dispensing the generic product for a patented use. Rather, the innovator will need to establish that it is apparent from an examination of the generic manufacturer’s product monograph and labelling that it intends to market the drug for a patented indication.

Recovery By Generic

Section 8 of the NOC Regulations enables a generic manufacturer to obtain recovery for losses that it suffers as a result of a prohibition proceeding commenced by an innovator where the prohibition proceeding was withdrawn or discontinued by the innovator or dismissed by a court.

Although no case on section 8 has yet gone to trial, there has been a series of interlocutory skirmishes over whether subsection 8(4) permits a court to award a generic manufacturer an election of either its damages or the innovator’s profits. Subsection 8(4) formerly read "The court may make such order for relief by way of damages or profits as the circumstances require in respect of any loss referred to in subsection (1)".

The amendments to the NOC Regulations now provide that the court can only make an award of damages to a successful generic manufacturer. This amendment will not, however, apply to any action commenced under section 8 prior to the coming into force of the amended regulations on October 5, 2006. In the RIAS, the government notes that it is reserving comment on the proper interpretation of the word "profits" in the former subsection 8(4), presumably since it does not wish to influence the outcome of litigation between innovators and generic manufacturers on this very issue. The amendments also provide that the Minister is not liable for any damages under section 8, a revision that was presumably made in response to an attempt by an innovator in one section 8 case to visit part of its liability under this section on the Minister for its delay in processing the generic manufacturer’s submission for an NOC.

Data Protection

The amendments to the FD Regulations prohibit the Minister from issuing an NOC to a manufacturer that makes a direct or indirect comparison to an "innovative drug" until at least eight years have passed from issuance of the innovator’s NOC for the innovative drug.

The amendments are important because generic manufacturers generally obtain drug approvals by making "abbreviated" drug submissions that establish the generic drug’s bioequivalence with an existing "reference product". The amendments prevent the use of the innovator’s data during the restricted period. Until now, Canada provided a five-year period of data protection. However, the Federal Court of Appeal has held that this protection period does not prevent generic manufacturers from relying on an innovative product in an abbreviated drug submission.

The Federal Court of Appeal’s interpretations effectively reduced the market exclusivity available in Canada below the levels required by international agreements. Canada is a party to the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement and the North American Free Trade Agreement. Those agreements require that member states afford a minimum of five years of market exclusivity. By way of comparison, the United States provides five years of data protection with the possibility of a three-year extension for new therapeutic indications or significant changes based on new data and a further six-month extension for pediatric data. Europe provides 10 years of data protection with the possibility of a one-year extension for a new therapeutic indication.

This new eight-year Canadian period is extended by a further six months in the case of drugs that have been the subject of clinical trials designed and conducted for the purpose of increasing the knowledge of the behaviour of the drug in pediatric populations. "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".

Additionally, the amendments have introduced a six-year "no filing" period within the eight-year term of data protection. An exception to this six-year period allows for the filing of drug submissions within the framework of Canada’s Jean Chretien Pledge to Africa Act for the export of certain medicines to Africa. These drug submissions can be submitted within the no filing period. However, an NOC will not be issued until the expiry of the eight-year data protection term.

The six-year and eight-year prohibitions do not apply where the innovator consents to the earlier filing by a second manufacturer of an application for an NOC or to the issuance of an NOC to a second manufacturer, as the case may be.

Under the amendments to the FD Regulations, data protection will only apply where the innovative drug has received an NOC and is marketed in Canada. A register of innovative drugs will also be created, listing for each such drug the dates on which the six-year, eight-year and, where applicable, the pediatric extension periods will expire.

These data protection provisions are not applicable to a drug in respect of which an NOC was issued before June 17, 2006.


The amendments provide some much-needed clarification and improvement to both sets of Regulations. If past experience is any guide, however, we can expect a flood of litigation on the interpretation of at least some of the amendments together with calls for further amendments.

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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