Canada: Pharmacapsules @ Gowlings: July 8, 2008

Last Updated: July 9 2008

Edited by Jennifer Wilkie and Chantal Saunders


  • Ontario's Innovation Agenda

  • Consortium Seeks to Innovate Through Collaboration

  • PMPRB Annual Report for 2007

  • Canadian Patient Safety Institute Receives Increased Funding

  • Mergers Increasing in the Life Sciences Industry

  • Report Released on Role of Drug Companies in Research

  • FDA Update: Agreement Between the Office of New Drugs and the Office of Surveillance & Epidemiology Confirms Each Office's Roles Moving Forward

  • TPD Releases 2007 Annual Report Relating to the PM(NOC) Regulations and Data Protection Regulations

  • Recent Cases

Ontario's Innovation Agenda

Article by Michael Herman

In April 2008, the Province of Ontario launched its Innovation Agenda, a plan to strengthen Ontario's economy, health care and environment through innovation. The priorities of the program include government-academic-industry collaborations and partnerships in life sciences, biotechnology, pharmaceutical and medical devices, as well as bio-based, environmental and alternative energy technologies.

The innovation agenda will include close to $3 billion in spending over 8 years aimed at stimulating growth in the science and technology industries that are essential for future sustainable economic growth.

In recent months, the Ontario government has announced a number of specific programs and investments to give effect to its Agenda. In particular, the government has announced:

1. The Next Generation of Jobs Fund, a five year, $1.15 billion strategy to support privately-led initiatives which secure good jobs in Ontario, use or develop innovative technologies, processes and/or materials and build or create new expertise in research and, very importantly, commercialization. Significantly, the government has committed to respond to applications under the Fund within 45 days. In particular, the Fund includes the Biopharmaceutical Investment Program to support the expansion of research and advanced manufacturing by pharmaceutical and biotechnology firms by providing grants, loans, forgivable-interest loans and funds for building infrastructure, research and training. The Fund also includes a Job and Investment Program to help companies expand in Ontario and develop innovative products for global markets and a Strategic Opportunities Program to support industry-led, public-private collaborations in key sectors, including the bio-economy, clean technologies and advance health technologies.

The first successful application to the Jobs Fund was from Sanofi Pasteur in respect a $100 million expansion, newly created jobs and a commitment for over $500 million in R&D investment over the next 5 years.

2. The new $205 million Ontario Venture Capital Fund, a fund of funds to be managed by TD Capital Private Equity Investors, to which the government has committed $90 million, with the balance of contributions coming from institutional investors. As a fund of funds, the Fund will invest in venture capital funds with track records of portfolio investments in high-growth innovative companies. Importantly, the Fund will be market driven with a returns-oriented approach to investment. As Minister of Research and Innovation John Wilkinson has stated, the new Fund will hopefully act as a catalyst in the venture capital community, helping to revive the venture capital investment in Ontario which has experienced significant declines in recent years.

3. A proposed 10 year Ontario income tax exemption for new corporations that commercialize intellectual property developed by qualifying Canadian universities, colleges or research institutes in areas including bio-economy/clean technologies and advanced health technologies. While Canada has been at the forefront globally in basic research and development, Canadian companies have lagged international competitors in commercializing the science into marketable products and technologies. The proposed tax exemption, details of which are expected in the fall, is intended to stimulate and improve the commercialization activities of Ontario companies.

On July 3rd, the government announced that it was providing $7.5 million to help move two biofuel projects forward, initiatives that focus on the next generation of biofuels by creating energy from agricultural byproducts, such as corn husks and manure. Each of these projects combine collaborations between universities and private sector companies and represent examples of the types of projects focused on commercialization the government intends to support through its Innovation Agenda.

For further information on the Innovation Agenda and the specific programs discussed in this article, please see:

Consortium Seeks to Innovate Through Collaboration

Article by Marc Richard

A new partnership has been forged in Quebec which will intensify research into novel drug-discovery technologies. With up to 48 million dollars in funding, the research consortium will comprise private sector participants, including research-based pharmaceutical companies, universities, and small biotech companies, with assistance from the Federal and Quebec governments. The consortium hopes the collaboration will lead to greater innovation through interdisciplinary investigations. The intellectual property arising from the research would be made available to other investors in the program who would pay a licensing fee to access the technology.

For more information, please see:

PMPRB Annual Report for 2007

Article by Wayne Critchley

The Annual Report of the Patented Medicine Prices Review Board (PMPRB) for 2007 was tabled in Parliament on June 18, 2008. It reports that prices of patented medicines declined slightly in 2007 and that there was an increase in spending on research and development. The main highlights:

  • Total sales of patented drugs were $12.3 billion in 2007, an increase of 3.0%. Patented drugs represented a smaller share of total drug sales, 66%, than in 2006.

  • There were 64 new patented drug products, including 20 new active substances, in 2007 with a total of 1,178 drug products under the PMPRB's jurisdiction.

  • Of these, 87% were priced within the PMPRB's Excessive Price Guidelines. As of March 31, 2008, about 9%, or 103 drugs, were under investigation. Twenty-two drug products were the subject of the seven ongoing proceedings before the PMPRB and 31 were under review.

  • On average, prices of existing patented drugs declined 0.1% even though the Consumer Price Index increased by 2.1%.

  • Canadian prices were second highest of the seven countries used by the PMPRB for price comparison purposes, a change from previous years that is largely due to changes in exchange rates.

  • Spending on R&D increased by 9.5% in 2007, raising the R&D-to-sales ratio for all patentees from 8.1% to 8.3% and for members of Rx&D to 8.9% from 8.5%.

For more analysis of the Annual Report, please see: Htmfiles/V2N09_20080703.en.html

To access a copy of the Annual Report, please see:

Canadian Patient Safety Institute Receives Increased Funding

Article by Scott Robertson

Health Canada has renewed its funding of the Canadian Patient Safety Institute (CPSI) in the amount of $8 million over the next five years. The CPSI, which was established in 2003, will use the newly allocated funding to foster collaboration between governments, regulatory bodies and stakeholders, and to develop effective patient safety strategies, frameworks, tools and practices.

Funding for the CPSI is seen as a commitment by the government to building a safer Canadian health care system. Member of Parliament, Laurie Hawn stated, "[p]roviding safe, high quality health care is a priority for the healthcare system and a priority for all governments."

According to Health Canada, the newly announced funding will be committed to education, research, tools and resources, and, interventions and programs while continuing to promote patient safety as a focus in health sector education and training, and facilitate the development of curriculum competencies.

For more information, please see:

Mergers Increasing in the Life Sciences Industry

Article by Scott Robertson

The life sciences sector is undergoing consolidation. Most recently Invitrogen Corporation has purchased Applied Biosystems Group for $6.4 billion and Thermo Fisher has acquired Open Biosystems for an undisclosed amount.

Isaac Ro, an analyst with Leeink Swann, has reported that the recent mergers and acquisitions are an indication of things to come as the life sciences industry has experienced a decrease in the amount of capital raised over the past year. With less capital available, smaller companies will be looking to negotiate sales to their larger competitors.

Ro is confident that a growing demand for the life sciences industry in China and India will help to alleviate the current economic downturn being experienced in the United States. Analysts are also predicting an increase in spending from the National Institutes of Health which should assist the life sciences industry.

For more information, please see: analysts_expect_more_mergers_in_life_sciences/

Report Released on Role of Drug Companies in Research

Article by Chantal Saunders

A report recently released by the Manhattan Institute for Public Policy indicates that the contributions of the private sector in drug discovery and/or development were critical. The study reviewed the role that private companies played in the development of 32 drugs, or classes of several drugs, and found that both private industry and government-funded research is important, with each sector playing a different role in the development.

For more information, please see:

FDA Update: Agreement Between the Office of New Drugs and the Office of Surveillance & Epidemiology Confirms Each Office's Roles Moving Forward

Article by Natalie de Paulsen

On July 1, 2008, Kate Rawson reported in The RPM Report that an Agreement between the Office of New Drugs (OND) and Office of Surveillance & Epidemiology (OSE) had been reached with respect to the management of significant safety issues associated with pending and approved drug products. "Significant safety issues" include those issues which have the potential to lead to the withdrawal of the approved drug from the market, withdrawal of an approved indication, or changes to warning, precautions or contraindication sections of the labelling, amongst others. This Agreement clarifies that the resolution of safety issues must be given the highest priority and that OND and OSE views are to be given equal weight in determining resolution. The Agreement confirms that OSE's role with respect to safety issues will expand and it will assume the lead in areas related to observational epidemiologic studies and medication error prevention. The transfer of the lead in these areas will occur in phases.

For more information, please see:
The July 1, 2008 article in The RPM Report as well as a copy of the Agreement e01.aspx?utm_source=SmartBrief.

TPD Releases 2007 Annual Report Relating to the PM(NOC) Regulations and Data Protection Regulations

Article by Jennifer Wilkie

On July 3, 2008, the Therapeutic Products Directorate (TPD) released its annual statistical report relating to the PM(NOC) Regulations and Data Protection Regulations. Statistics are provided for the year 2007 as to the number of patents added and removed from the patent register, the number of drug submissions affected, how many notices of allegation (NOA) have been sent and the number of and outcome of proceedings commenced. For example, it is reported that 58 NOAs were sent and 52 court proceedings commenced. One order of prohibition has been granted, one proceeding dismissed, 14 applications discontinued and 36 cases are pending resolution.

With respect to data protection, it is reported that as of December 31, 2007, 42 drugs are listed on the Register of Innovative Drugs, 6 with pediatric extensions. Of these, there are 30 prescription drugs, 8 biologics, 3 veterinarian drugs and 1 radiopharmaceutical.

For more information, please see: patmrep_mbrevrap_2007-eng.php

Recent Cases

Article by Beverley Moore

Abbott v. Minister of Health; listing decision; lansoprazole; June 11, 2008;

The trial judge determined that the Minister did not err in interpreting the NOC and the patent and thus dismissed the application for judicial review seeking to have the patent listed on the Patent Register.

The Court held that, on a proper construction of the patent at issue, it was not relevant to the NOC. The patent claimed an orally disintegrable tablet while the NOC was for delayed-release capsules. The Court found that the capsules were intended to be swallowed and are not disintegrable. Thus, the patent was not relevant to the dosage form.

Full text of the decision can be found at:

Pharmascience v. Sanofi-Aventis; decision regarding form of an order; June 20, 2008; ramipril

Pharmascience previously sent a Notice of Allegation (NOA) alleging invalidity, namely that a patent was invalid for double patenting. This allegation was found to be not justified. Later, a different generic company was successful on an allegation of invalidity, in respect of different grounds of invalidity. Pharmascience then sent a second NOA addressing the same grounds of invalidity as were in the other company's successful NOA. In the notice of application, Sanofi-Aventis requested a declaration that Pharmascience's second NOA was invalid for issue estoppel.

In a first portion of the hearing on the merits, the Court held that Pharmascience's allegations of invalidity asserted in its first NOA had been finally determined and issue estoppel thus operated to preclude it from making further allegations of invalidity in a second NOA. The Court thus declined to accept Pharmascience's arguments that it was abusive for Sanofi-Aventis to bring the proceeding as there was no valid NOA in the first place. Pharmascience's appeal of this order was dismissed by the Court of Appeal by a decision dated June 12, 2008.

By decision dated June 20, 2008, a second Order resulted from the second portion of the hearing on the merits where the Court was called on to determine the form of Order disposing of the notice of application in view of the previous finding. The Court found that, as Pharmascience is precluded from making further allegations of invalidity on the basis of issue estoppel, the question of the scope of Sanofi-Aventis's ability to assert the validity of its patent does not arise in this case. Thus, there is no allegation in Pharmascience's NOA that is justified and an order should issue prohibiting the Minister from issuing an NOC to Pharmascience.

The Court also granted costs at the high end of Column V of the Tariff for Pharmascience's motion for summary dismissal and at the high end of Column III for the case as a whole as none of these costs would have been incurred had Pharmascience not endeavoured to re-litigate a battle that it had already fought and lost.

The full text of the decision can be found at:

Janssen-Ortho v. Apotex; NOC proceeding decision on the merits; June 17, 2008; levofloxacin;

The Court granted prohibition. Apotex was the second generic company to challenge the validity of this patent. The first generic company was successful, however the patent was then litigated in a full patent infringement action where it was found to be valid and infringed and the decision was upheld by the Court of Appeal.

The Court considered each of Apotex' allegations of invalidity and non-infringement and found each of them not to be justified.

The Court dismissed the application with costs at the high end of Column IV. Furthermore, the Court added at 5% increase to the costs due to a fraud allegation that was originally raised and later withdrawn.

The full text of the decision can be found at:

Lundbeck Canada v. Apotex; appeal of interlocutory motion to strike; June 23, 2008; citalopram

The Trial Division granted the appeal of a Prothonotary's decision, and struck an affidavit from the proceedings. The Court held that the affidavit contained testing that was not found in the NOA. The NOA did refer obliquely to testing results. However, the report in question was not in existence at the time of the NOA. Thus, it could not be these results that were being referred to in the NOA.

The Court struck the affidavit and those portions of the expert evidence that referred to the affidavit.

The full text of the decision can be found at:

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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