Canada: Pharmacapsules @ Gowlings - 1 August, 2008

Last Updated: August 4 2008

Edited by: Jennifer Wilkie and Chantal Saunders

  • Ontario Government to Introduce Tendering for Public Drug Programs

  • Strategic Risk Management for Biotechnology Companies

  • Proposed Allergen Labelling Requirements

  • PMPRB Issues First Notices of Hearing into Prices of Generic Drugs

  • Recent Cases

Ontario Government to Introduce Tendering for Public Drug Programs

By: Wayne Critchley

The Executive Officer of Ontario's Public Drug Programs (OPDP) has announced the implementation of a new initiative for "competitive agreements" for certain multiple-source drugs. The program is designed to obtain additional savings to the province on the prices of multiple-source drugs that are currently available on the Ontario Drug Benefit Formulary (ODB Formulary). In a Notice dated July 8, 2008, Executive Officer Helen Stevenson stated that the Ministry of Health and Long-Term Care has "high expectations for price reductions" as a result of this initiative.

The OPDP will issue its first Call for Applications for competitive agreements on July 25, 2008 for four drugs: enalapril, ranitidine, metformin and gabapentin.

Manufacturers will have until August 12 to submit applications and contracts may be awarded by late September. Initial contracts will be for two years beginning January 1, 2009, but could start as early as October 1, 2008.

For further discussion of this issue, please see:
The Drug Pricing and Reimbursement newsletter of July 10, 2008: HtmFiles/V2N10_20080710.en.html

In addition, please see:
The Executive Officer's Notice of July 8, 2008: exec_office_20080708.pdf

The OPDP's "Briefing for Stakeholders,": stakeholder_briefing.pdf

More details released in the form of Q's and A's: notices/exec_office_20080716.pdf

Strategic Risk Management for Biotechnology Companies

By: Michael Herman

Ernst & Young has released a report identifying the top 10 strategic risks facing biotechnology companies over the next 5 years. The report consolidates the views of leading industry analysts across various disciplines within the biotechnology sector.

The key risks identified in the report are pricing pressures and access, raising capital, strategic alliances, demonstrating value, product development and clinical trials, regulatory compliance, monitoring drug safety, protecting intellectual property, accessing talent and harnessing emerging markets.

The report defines strategic risk as one which could cause severe financial loss or fundamentally undermine the competitive position of a company. Interestingly, threats emerging from the general geopolitical and macro-economic environment are not viewed as significant to the biotechnology industry.

In what will no doubt cause some debate, Ernst & Young has ranked the strategic risks in order of priority. However, for individual biotech companies, the rankings are less meaningful than a general awareness and appreciation of the risks. In addition, the identified risks likely will not come as a surprise to participants in the biotechnology sector. However, it is important for companies to consider and address each of the risks at an early stage, increasing the odds that nasty surprises can be reduced and expensive directional changes avoided.

Although many of the challenges and issues apply to biotechnology companies wherever they reside, the report is understandably primarily focused on the U.S. market. For example, the report identifies pricing pressures as the number one risk due to the concern that price controls may be introduced in the U.S. In the BIOTECanada/PricewaterhouseCoopers Canadian Life Sciences Industry Forecast 2007, life sciences companies identified their key barriers to success as accessing capital, attracting and retaining key employees (particularly non-scientific managerial talent) and finding licensing or strategic partners. While Canadian biotechnology companies identify generating positive cash flow as an issue, they do not identify price controls per se which are already a feature of the Canadian regulatory system.

Biotechnology companies should be identifying and addressing their strategic risks as part of their overall objectives and plans. The Ernst & Young report serves as a welcome addition to what should be ongoing dialogue, discussion and debate within the biotechnology industry.

For a copy of the Ernst & Young Report, please see:

For a copy of the BIOTECanada/PricewaterhouseCoopers Canadian Life Sciences Industry Forecast 2007, please see:

Proposed Allergen Labelling Requirements

By: Lewis Retik

Health Canada recently proposed new labelling regulations for prepackaged foods which would provide additional labelling requirements specific to food allergens, gluten, and added sulphites. The proposed amendments are stated to be important to the health and quality of life of Canadian consumers with a food allergy, celiac disease or a sensitivity to sulphites. In particular, the regulatory impact analysis statement states that the enhanced labeling requirements will provide essential information to allow consumers to make an informed choice about prepackaged foods.

Under the proposed regulations, food allergens derived from any of the following foods would have to be identified on the product label: almonds, Brazil nuts, cashews, hazelnuts, macadamia nuts, pecans, pine nuts, pistachios or walnuts; peanuts; sesame seeds; wheat, kamut, spelt or triticale; eggs; milk; soybeans; crustaceans; shellfish; or fish. The gluten source would have to be indicated when the food contains any gluten protein from the grain of any of the following cereals or the grain of a hybridized strain produced from at least one of the following cereals: barley, oats, rye, triticale or wheat, including kamut or spelt. Sulphites, when either directly added to a food or when the total amount of sulphites present in the food is 10 PPM or more, would have to appear on the label. The proposed regulations would also require that the list of ingredients identify the specific sources of hydrolysed plant proteins, starches and modified starches, and lecithins.

For more information, please see:
New food labelling rules call for listing of allergens, gluten, sulphites

The proposed regulations are available at:

PMPRB Issues First Notices of Hearing into Prices of Generic Drugs

By: Wayne Critchley

In July 2008, the Patented Medicine Prices Review Board (PMPRB) announced that it has issued two Notices of Hearing with respect to the prices of generic drugs sold in Canada by Apotex Inc. and ratiopharm Inc. These are the first Notices of Hearing issued by the Board with respect to the price of generic drugs. In March, the Board had also commenced proceedings against Apotex to determine if Apotex is required to file price and sales information with the PMPRB with respect to drugs to which a patent may pertain.

Under the Patent Act, the PMPRB is mandated to ensure that the prices charged by patentees for patented medicines are not excessive. These cases involve generic versions of salbutamol sulphate, a bronchodilator medicine. The Statements of Allegations filed by Board Staff claim that they are patented medicines sold as "authorized generics" under licensing agreements with the patentees. It is alleged that both Apotex and ratiopharm began selling Apo-Salvent and ratio-Salbutamol in 2002 but failed to report them to the PMPRB until the fall of 2006. It is also alleged, based on publicly-available information, that the prices of both drugs increased in 2005 from $4.64 per inhaler to $7.73, contrary to the PMPRB's Guidelines.

The PMPRB has set down December 8, 2008 for the hearing with respect to Apo-Salvent and January 12, 2009 for the ratio-Salbutamol matter. The hearing into Apotex's filing obligations is scheduled for October 6, 2008.

For more information, please see:

Recent Cases

By: Beverley Moore

Sepracor v. Pharmascience; appeal of an interlocutory motion to strike a notice of appearance; June 27, 2008; desloratadine;

The Court of Appeal overturned the motions judge's decision striking the notice of appearance. The Court of Appeal held that a respondent who does not oppose an application is entitled to file a notice of appearance in a modified form to reflect their interest in the proceedings. In this case, the respondent patentee will thus be "fully able to represent its interest as befits someone who is intended to be bound by the result".

The Court of Appeal saw that there is little advantage to a person who has the rights and status of a party being required to seek the limited discretionary status of an intervener. Furthermore, the respondent patentee did not need to be added as an applicant. Any procedural fairness and orderliness issues could be dealt with by way of case management as they arise.

The full text of the decision can be found at:

Laboratoires Servier v. Apotex; merits of infringement proceeding; July 2, 2008; perindopril

The trial judge found the patent to be valid and infringed. The Court also dismissed the Competition Act counterclaim.

The Court found that Apotex directly infringed the patent. However, there was no inducement of infringement as the evidence indicated that title does not pass until the product is delivered in the destination country. The Court also found that the non-ADIR foreign plaintiffs did not have standing to bring a claim as the evidence did not show that they were licensed.

Apotex argued that the patent was invalid due to obviousness, utility, sound prediction, inventorship and missed conflict. On each of these issues, the Court found the patent to be valid.

Furthermore, Apotex alleged a conspiracy pursuant to the Competition Act. This alleged conspiracy stemmed from a settlement that arose from a conflict proceeding. The settlement happened prior to the grant of the patents. Thus, the Court found that there was no market power and no impairment of competition at that point. Furthermore, the rules and practices of the Federal Court allow for the settling of actions. Thus, the Court dismissed Apotex' claim under the Competition Act. The Court further found that Apotex was beyond the two-year limitation period in the Competition Act and thus was statute barred from bringing the claim.

The Court also granted the plaintiffs the ability to elect an accounting of profits instead of damages if they so choose. However, the Court declined to order compound interest. The Court and parties agreed it would be premature to make a determination regarding punitive or exemplary damages prior to the reference on damages.

The full text of the decision can be found at:

Nu-Pharm v. Canada (Minister of Health); appeal of summary judgment motion; July 3, 2008; enalapril

The Court of Appeal upheld a summary judgment decision dismissing Nu-Pharm's action on the basis that there was no genuine issue for trial.

In 1997, Nu-Pharm filed an ANDS comparing its drug NU-ENALAPRIL to APO-ENALAPRIL. The Federal Court granted a judicial review and allowed Health Canada to review Nu-Pharm's ANDS. When Nu-Pharm received its Notice of Compliance (NOC), Merck applied for an order quashing the NOC. This was granted in 1999 and upheld by the Court of Appeal. After the decision of the Court of Appeal, the Minister of Health wrote to the Provincial Drug Benefit Managers and advised that Nu-Pharm's NOC was no longer valid and NU-ENALAPRIL products could no longer be sold as it was contrary to the Food and Drug Regulations.

Nu-Pharm commenced a judicial review of this decision. Nu-Pharm also filed a Statement of Claim seeking damages from the Ministry of Health. Nu-Pharm then discontinued the judicial review and maintained only the damages action.

The Court found that the success of Nu-Pharm's action in damages is entirely dependent upon Nu-Pharm showing the unlawful character of the decision of the Ministry. If Nu-Pharm wishes to challenge that decision, it must do so by judicial review. It cannot by-pass the requirements of the Federal Court Act. The within action was found to be collateral attack or an indirect challenge to the decision.

The full text of the decision can be found at:

Eli Lilly v. Novopharm; appeal of scheduling order; July 16, 2008; olanzapine

In the Scheduling Order, the case management Prothonotary reversed the order of evidence with respect to invalidity. The Court also set a schedule for evidence. Novopharm appealed and the Court dismissed the appeal.

The Court held that scheduling matters are discretionary in nature and a Prothonotary's decision should be left undisturbed unless the questions are vital to the final issue of the case.

The Court held that reversing the order of evidence is explicitly contemplated by the Practice Direction of the Court. Thus, the Prothonotary had the jurisdiction to do so. Accordingly, there was no error of law and there was nothing clearly wrong in the exercise of the Prothonotary's discretion.

The full text of the decision can be found at:

Novopharm v. "Company X"; interlocutory motion to issue a Confidential Statement of Claim; July 4, 2008

The Court dismissed Novopharm's motion to maintain the Statement of Claim as confidential in the proceeding.

Initially, the Court refused to clear the court room as it is only in the rarest of circumstances where in camera hearings should be permitted.

Novopharm argued that it wished to protect its commercial interest in the development of its "X" product as the confidentiality of its business strategy is important and it would suffer prejudice if this is disclosed. Competitors could learn of the name of the defendant and the details of the patent and "catch up" with Novopharm to enter the market at the same time, causing Novopharm to lose generic exclusivity. It also tried to argue that it should be granted this exclusivity because it is proceeding by way of impeachment action instead of by way of proceeding under the PM(NOC) Regulations, thus it is seeking judicial economy.

The Court held that without having the benefit of the input of the defendant or the Minister of Health or the Attorney General or other potentially interested parties, the Court should be leery of granting a Confidentiality Order. Confidentiality Orders in both PM(NOC) proceedings and patent actions generally protect documents dealing with trade-secrets, drug formulations and the like. It is naïve to believe that the public has any interest in this information. However, in this case, the applicant is seeking to protect information that the public does have an interest in knowing: the parties that appear before the Court and the issues of the proceeding, including the name of the drug. Thus, the motion must be dismissed.

The full text of the decision can be found at:

Bayer Inc. v. The Minister of Health et al., judicial review of listing decision, July 10, 2008,

The Court upheld decisions of the Minister of Health to not list a patent in respect of submissions for two drugs on the basis that the patent claims were not claims to the dosage form nor did the SNDS represent a change in dosage form. The claims at issue related to a transdermal drug delivery device comprising, a carrier (patch), including a drug, a dessicant and a package containing the carrier and dessicant. The Court found that the invention was the product packaging that enhances the stability and performance of the drug, but that the claim was not in the Court's view a dosage form or novel delivery system in the sense intended by the PM(NOC) Regulations.

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.

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.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.