Canada: Pharmacapsules @ Gowlings - February 7, 2008

Last Updated: February 25 2008

Edited by Jennifer Wilkie


  • CIPO Prosecution Highway Pilot Launched
  • Health Canada Releases Discussion Paper on Modernizing Food, Health and Consumer Products Safety Regime
  • PMPRB Asserts Jurisdiction Over U.S.-Based Sales
  • A New Discussion Paper from the PMPRB
  • Recent Cases
  • Upcoming Conferences

CIPO Prosecution Highway Pilot Launched

On January 28, 2008, the Canadian Intellectual Property Office (CIPO) launched a one-year pilot program to help fast-track patent examination in Canada and the U.S. The Canada-U.S. Patent Prosecution Highway (PPH) is currently being used by the United States Patent and Trademark Office (USPTO), the Japan Patent Office, the United Kingdom Intellectual Property Office and the Korean Intellectual Property Office. PPH seeks to permit patent offices in participating countries to benefit from each other's work. For example, if claims of an application have been found to be allowable in a participating country, accelerated examination of those claims may be requested in another participating country.

The pilot program will end on January 28, 2009, but may be extended for up to an additional year, if necessary, to adequately assess its feasibility.

For more information, please see:
Article by Isabel Raasch

Health Canada Releases Discussion Paper On Modernizing Food, Health And Consumer Products Safety Regime

In accordance with Canada's Food and Consumer Safety Action Plan, announced by the Prime Minister in December, Health Canada has released a discussion paper on strengthening and modifying Canada's food, health and consumer products safety system. The paper proposes initiatives for risk management through better product information to consumers and rapid response to public safety issues. The paper also focuses on targeting products with higher or unknown risks.

For more information, please see:
Article by Marc Richard

PMPRB Asserts Jurisdiction Over U.S.-Based Sales

In a recent decision, the Patented Medicine Prices Review Board (PMPRB) has ruled that it has jurisdiction over products sold in the U.S., but imported into Canada under Health Canada's Special Access Program (SAP).

The recognized benefits of these agreements will provide accelerated access to information and thus make it easier and quicker to protect public health and improve performance and safety.

Under section 83 of the Patent Act, the Board has the power to issue a remedial order where it finds "that a patentee of an invention pertaining to a medicine is selling the medicine in any market in Canada at a price that, in the Board's opinion, is excessive..."

Celgene Corporation argued that the PMPRB does not have jurisdiction over the pricing of its oncology product, Thalomid, on the grounds that:

  1. The sales of Thalomid occurred in the U.S. and not in Canada; and
  2. Thalomid has only been available under the SAP and has not been commercially marketed pursuant to a Notice of Compliance.

On the first point, the Board found as a fact that under the rules of commercial law, the locus of the sales was the U.S.; the invoices on sales of products delivered to patients in Canada were stamped "F.O.B. New Jersey." Nonetheless, it concluded that it is not restricted by the commercial common law pertaining to the locus of a sale and that its jurisdiction includes:

"... sales of medicines that are regulated by the public laws of Canada, that will be delivered in Canada, to be dispensed in Canada, and where, in particular, the cost of the medicine will be borne by Canadians - patients or taxpayers as the case may be."

On the second argument, the Board found that the sales were made in a "market" in Canada, even if not the commercial market but rather the more limited market available under the SAP, in essence, products supplied directly to patients.

There is a period of 30 days from the date of the decision during which Celgene may file for judicial review.

For more information, please see:
Article by Wayne Critchley

A New Discussion Paper From The PMPRB

The Patented Medicine Prices Review Board (PMPRB) has issued a discussion paper containing some specific proposals and options related to:

  • its review of the Excessive Price Guidelines; and
  • the controversy surrounding the implications of the Federal Court of Canada decision in the LEO Pharma case on the reporting of discounts and rebates.

The Paper includes specific proposals to amend the current policies and guidelines of the Board to provide for the review of prices in "any market" (i.e. by province and class of customer) in certain circumstances, rather than relying on the Average Price for all Canada. It also proposes to establish additional circumstances where it would be appropriate to re-set the maximum non-excessive price of a medicine. Among other things, these circumstances include situations where is can be shown that the costs of making and marketing the drug exceed the MNE price and where new scientific evidence supports a change in the category of the medicine.

The Board has taken the view that the LEO Pharma decision interpreted the Patented Medicines Regulations, 1994 (Regulations) to require patentees to include all discounts, rebates and other benefits in the calculation of the Average Price of the medicine for price review purposes. This interpretation reverses a previous policy of the Board and has attracted concern that it discourages patentees from supplying drugs at low or no cost for compassionate purposes. In addition, stakeholders have expressed concern with the Board's position that patentees ought to report payments to governments that have been negotiated in regard to public drug programs.

The discussion paper outlines eight options to address these concerns including some options to amend the Regulations and others to amend the Excessive Price Guidelines. The Board has not indicated a preference for any of the options.

In addition to these matters, the Board reports that work is proceeding on the other issues under study in its review of the guidelines and more reports and proposals an be expected during the year.

The Board has asked stakeholders to submit comments on the discussion paper to the Secretary of the Board by March 3, 2008.

For a copy of the PMPRB Discussion Paper, Options for Possible Changes to the Patented Medicines Regulations, 1994 and the Excessive Price Guidelines, please visit:
Article by Wayne Critchley


Cobalt v. Pfizer And Pharmascience v. Pfizer; An Appeal Of An Interlocutory Motion; January 10, 2008;

The Court of Appeal affirmed the decision of the Federal Court allowing the owner of a patent to be joined to the proceedings, despite not initially being made a party to the proceedings.

The Court has the discretion to add the patentee at any time. While section 6(4) of the NOC Regulations is mandatory, it does not give a time limit for the patentee to be added as a party. The Judge in the Trial Division was correct to use the Federal Court Rules to supplement the NOC Regulations. The Federal Court Rules provide that a claim shall not be defeated by reasons of misjoinder or non-joinder of a party.

The full text of this decision can be found at:

Pfizer v. Apotex; Decision On The Merits Of A 55.2 Proceeding; January 4, 2008; Drug: Atorvastatin

The Trial Division found the patent at issue to be invalid as it did not meet the test for a valid selection, and it claimed subject matter that was already the subject of a previous patent.

The Court seems to have relied on law developed from cases under the NOC Regulations in coming to its conclusion that the patent at issue is not a proper selection patent. The Court does not seem to have cited Eli Lilly v. Novopharm ([2007] FCA 359) where it was held it is inappropriate to rely on NOC decisions to set binding precedent on controversial questions of patent law.

The Court construed the patent to be claiming a tenfold advantage of atorvastatin over the racemic mixture. The Court then reviewed the experimental data that went to support that claim and found that it was not reliable. Furthermore, the Court did not accept any evidence that atorvastatin has an unexpected or surprising inhibitory advantage over the racemic mixture. Thus, the patent did not meet a test for a valid selection.

The full text of the decision can be found at:

Bayer Healthcare v. Sandoz; An Appeal Of Judicial Review Of A Decision Of The Minister; January 23, 2008; Drug: Ciprofloxacin

Bayer challenged the Minister's decision to issue a NOC to Sandoz in respect of vials of ciprofloxacin. The Court of Appeal upheld the decision of the Federal Court to dismiss the application with costs.

At the time Sandoz's NOC was issued, Bayer had withdrawn its similar product from the Canadian market. Thus, Sandoz's NOC was on the basis of establishing pharmaceutical equivalents of its product to an innovator product in an equivalent jurisdiction. However, Sandoz's ANDS continued to include reference to Bayer's product in Canada.

The Federal Court found that Sandoz did not compare its product to Bayer's for the purpose of showing bioequivalence. The comparison was only for the establishment of a safe limit of a certain impurity.

Thus, the Judge made no palpable and overriding error, and his decision was upheld.

The full text of the decision can be found at:
Article by Beverley Moore


February 27-28, 2008: Toronto

Gowlings Partner Jamie Mills will co-chair and Gowlings Partners Anthony Creber and Neil Belmore will speak at the upcoming Drug Patents and Legal Forum conference, being held at St. Andrew's Club and Conference Centre in Toronto on February 27-28, 2008.

For more information, please see:

April 9-11, 2008: Ottawa

Gowlings is sponsoring a litigation workshop and two-day conference on Life Cycle Management issues, April 9 through 11, in Ottawa, in conjunction with the Canadian Institute. Gowlings Partners Jane Clark and Martin Mason will lead the litigation workshop on patent and PMPRB litigation. Gowlings Partner Adrienne Blanchard and Janssen-Ortho's Lesia Babiak will chair the conference. Gowlings Partner Mary Thomson will speak on class action litigation, while Partner Dale Hill will speak on international tax issues such as transfer pricing.

For more information, please see:

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