Canada: Venlafaxine Section 8 Decision Follows "Roadmap" Set Out In Previous Decisions

In this decision under section 8 of the Patented Medicines (Notice of Compliance) Regulations ("Regulations"), Justice Zinn of the Federal Court considered various issues pertaining to Ratiopharm's (now Teva) claim for damages with respect to the drug venlafaxine, marketed by Pfizer (previously Wyeth) under the brand name Effexor®. This action arose from Wyeth's unsuccessful prohibition application with regards to Canadian Patent 2,199,778, which was held by the Federal Court of Appeal to be improperly listed on the Patent Register against Effexor®.¹ While the public version of Justice Zinn's decision only issued on April 3, the confidential reasons for judgment were issued earlier without the benefit of the reasons in the recent Ramipril appeals.²

In assessing Ratiopharm's damages claim, the Court adhered to the framework or "roadmap" first set out in Justice Snider's Ramipril decisions.³ As such, the issues in this decision largely turn on the facts. The Court did not finalize the quantum of damages, despite the parties' encouragement to take a "broad-axe approach". Rather, it sent the issue of quantum back to the parties. Select aspects of the decision are discussed below.

Start Date for Liability Period

In determining the relevant time period for the section 8 damages assessment, only the start date was at issue. Wyeth argued that the period began 45 days after it received Ratiopharm's Notice of Allegation in respect of the '778 Patent (i.e., the deadline for commencing a proceeding under the Regulations) and could never be before the date certified by the Minister. The Court rejected this argument, holding that the improperly listed '778 Patent need not be considered in assessing the start date. Further, the Court noted that the start date is the Minister's certification date unless there is a more appropriate date. A more appropriate date could be a date preceding certification if the generic suffered losses in that period. In this case, the start date was held to be the date that Ratiopharm would have received its NOC but for the listing of the '778 Patent, provided that Ratiopharm was ready to launch at that date. In particular, the Court held that the relevant date was the expiry date of another patent listed against Effexor®, since Ratiopharm had agreed to await expiry of this patent prior to receiving its NOC.

Market Entry of Other Generics

The Court placed the burden on Wyeth to prove when other generics would have entered the venlafaxine market in the "but for" world. On the facts before it, the Court agreed with Ratiopharm that Novopharm (who sold a generic venlafaxine product authorized by Wyeth) would have entered the market in the "but for" world on the same date as the real world. This was due mainly to Novopharm's manufacturing issues that would have prevented it from entering the market in the "but for" world any earlier than in the real world.

The Court also rejected Wyeth's argument that another generic, Pharmascience, would have entered the market during Ratiopharm's liability period.

Ramp-Up

Consistent with the holding of the Federal Court of Appeal in the recent Ramipril appeals, Justice Zinn rejected Ratiopharm's argument that no deduction should be made for the fact that Ratiopharm's venlafaxine sales would go through a "ramp up" period before reaching a steady state. In doing so, the Court expressly chose not to follow its earlier Pantoprazole⁴ decisionwhere a deduction for ramp-up was declined. Justice Zinn reasoned that allowing a deduction for ramp-up would result in a but for world with steady state sales, a situation that he called a "...fiction divorced from reality in any world, and an inaccurate accounting..." (at paragraph 251).

Pre-Judgment Interest

The Court also addressed the relevant date from which pre-judgment interest starts accumulating. Under the Ontario Courts of Justice Act,⁵ pre-judgment interest is calculated from the date at which the cause of action arose. Wyeth argued that the relevant date was the date of dismissal of the prohibition application. This was rejected in favour of the date that Ratiopharm began to suffer loss.

The full text of the decision can be accessed at: http://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/70810/index.do

Footnotes

1 Ratiopharm inc v Wyeth, 2007 FCA 264.

2 For a summary of the Ramipril appeal decisions, please see:[ADD LINK TO IP REPORT]

3 Sanofi-Aventis Canada Inc v Teva Canada Limited, 2012 FC 552; Apotex Inc v Sanofi-Aventis, 2012 FC 553.

4 Apotex Inc. v Takeda Canada Inc., 2013 FC 1237.

5 RSO 1990, c C43.

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