The Federal Court, in a decision released on July 17, 2009, has
upheld Canada's Food and Drug Regulations as they
relate to the protection of data that is submitted by innovators
for the purpose of obtaining regulatory approval (the Data
Currently, the Data Protection Regulations, implemented
on October 5, 2006, provide a period of 8 years of protection from
the date of an innovator's first Notice of Compliance for an
"innovative drug", and the possibility of a further 6
month period if studies are conducted in the pediatric population.
During the period of protection, no competing manufacturer can
compare its product to the innovative product in order to obtain
approval. Effectively, this protects the underlying clinical trial
and other data submitted by innovators from being relied upon by
competitors seeking their own approvals. The system was implemented
to bring Canada into compliance with its obligations to protect
this information, as required by the North American Free Trade
Agreement (NAFTA) and the World Trade Organization's
Agreement on Trade-related Aspects of Intellectual
The Canadian Generic Pharmaceutical Association (CGPA) and
Apotex Inc., in separate court applications, challenged the new
system as being ultra vires the authority of Parliament
and unconstitutional. Canada's Research-based Pharmaceutical
Companies (Rx&D) (represented by Gowlings' Martin Mason and
Graham Ragan) was granted intervener status in the CGPA proceeding,
while Eli Lilly Canada Inc. (represented by Gowlings' Rick
Dearden and Wendy Wagner) was granted intervener status in the
Apotex application. The two applications were heard together on
December 16 through 18, 2008.
The Attorney General had objected early on in the proceedings to
the standing of either applicant, the CGPA or Apotex. Justice
Mandamin revisited this issue in respect of the CGPA at the hearing
of the matter and determined that the CGPA had public interest
In upholding the Data Protection Regulations, the Court
determined that the constitutional authority for the
Regulations was not the criminal law power, but rather,
that the implementation of the Regulations fell under the
federal trade and commerce authority.
In commenting on the nature of the Regulations, the
The Data Protection
Regulation, although adjunct rather than integral, can be said
to "round out" the valid federal regulatory drug scheme
established for marketing drugs in Canada much in the manner as
described by Chief Justice Lasken in Vapour. It brings the
mechanism by which generic copies of new drugs are approved into
conformity with Canada's obligations in NAFTA and TRIPS.
The Court further stated:
The Data Protection
Regulation deals with the manufacture and marketing of drugs,
a local matter in a single industry. However, the evidence also
demonstrates that this regulation has implications of a national
dimension. It was enacted in compliance with NAFTA and TRIPS. NAFTA
involves Canada, the United States and Mexico. The TRIPS agreement
involves many countries around the world, most of which participate
to some degree or other in the TRIPS scheme for the protection of
new drug research investment through market exclusivity
Canada's implementation or
failure to implement such international trade agreements has a
national dimension that relates to Canada's ability to
participate in world trade. In this sense, the Data Protection
Regulation deals with a genuine national economic concern of
the kind considered by Justice Dickson in Canadian National
The Data Protection
Regulation deals with the approval of the marketing of new
drugs. Provincial legislatures cannot enact legislation that delays
the approval of generic drugs since provincial approvals of drugs
for the market place would seriously interfere with the federal s.
91(27) criminal law power to prohibit the marketing of drugs but
for exceptions where drugs are proven safe and effective. Given the
inability of provincial governments to enact legislation to stage
approval of generic drugs, the fifth criteria enunciated by Chief
Justice Dickson, the failure of one or more provinces jeopardizing
the successful operation in other parts of the country, does not
The Court also found that the Data Protection
Regulations are not beyond the regulatory power of the
Governor in Council in that the Regulations are
"properly concerned with data protection for innovator drug
companies which are required to provide confidential commercially
valuable data to secure a NOC to introduce new drugs to the
Canadian market" and that this is consistent with the
requirement in the NAFTA and TRIPS provisions.
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