Canada: Closer Than They Appear: Federal Court Of Appeal Considers Definition Of "Innovative Drug"

A recent decision of the Federal Court of Appeal provides some further guidance as to when a drug will be considered an "innovative drug" and able to enjoy the benefit of data protection. In our October 2012 Blakes Bulletin on Life Sciences: I Want a New Drug: Developments in Data Protection for Innovative Drugs, we highlighted two decisions of the Federal Court that considered the scope and application of the data protection regime for innovative drugs in Canada.

In Takeda Canada Inc. v. The Minister of Health, the Federal Court of Appeal (FCA), in a split decision, upheld the prior decisions of the Federal Court of Canada (FCC) and the Minister of Health (Minister) to refuse to list Takeda's drug DEXILANT on the Register of Innovative Drugs (Register).

Decisions of the Minister and the FCC

A manufacturer of a new drug is required to submit detailed safety and efficacy information to the Minister as part of its New Drug Submission (NDS) in order to receive approval to market and sell the drug in Canada. Where the drug in question is an "innovative drug", the data protection provisions in the Food and Drug Regulations (Regulations) prevent, for a period of time, applications for generic drugs from relying on the data that was submitted in support of the NDS for the innovative drug. Innovative drugs that qualify for data protection are listed on the Register.

An "innovative drug" is defined in the Regulations as "a drug that contains a medicinal ingredient not previously approved in a drug by the Minister and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph" (emphasis added).

Takeda requested that the Minister list its drug DEXILANT on the Register to indicate that it was eligible for data protection. The Minister rejected Takeda's request for data protection on the ground that DEXILANT's medicinal ingredient, dexlansoprazole, is an enantiomer of lansoprazole, a previously approved medicinal ingredient and, therefore, DEXILANT did not meet the definition of an innovative drug.

Takeda brought an application in the FCC for judicial review of the Minister's decision to deny data protection. Takeda argued that the Minister's interpretation of the definition of "innovative drug" in the Regulations was overly restrictive and that enantiomers should not be excluded merely because they are listed in the definition as examples of drugs that are mere variations of previously approved drugs. Takeda submitted that the Minister should also have considered the nature and extent of the data submitted by Takeda in support of the NDS.

Based on the principles of statutory interpretation, the FCC found that the definition of "innovative drug" in the Regulations, when read in its grammatical and ordinary sense, was relatively clear. The Court found that, based on the ordinary meaning of the word "variation", it was reasonable that an enantiomer, along with the other listed examples, will always be a mere "variation" and therefore not an innovative drug. Although the Minister may make additional inquiries (including with respect to the nature and extent of the data submitted in an NDS) to determine whether a medicinal ingredient that is not one of the types listed in the definition may nonetheless be a mere variation, the Court found that medicinal ingredients that are listed are excluded from the outset and further consideration is not required.

Furthermore, the Court also considered that this interpretation was consistent with Canada's international treaty obligations, which were the underlying reason for the implementation of the data protection provisions in the first place. These treaty obligations apply to the protection of "new chemical entities" rather than all "new drugs". Therefore, the mere fact that extensive data may be required to support an NDS will not automatically make the medicinal ingredient an "innovative drug".

The FCC dismissed Takeda's appeal of the decision of the Minister on these grounds.

Federal Court of Appeal

Takeda made a further appeal to the FCA, which denied its appeal by a two-to-one split. The majority of the FCA framed the issue before it as one of statutory interpretation. The FCA agreed with the FCC that the applicable standard of review was that of correctness, namely, was the definition of "innovative drug", taken in context and with attention given to its text and purpose, interpreted correctly by both the Minister and the FCC?

The majority sided with the Minister and found that the FCC had made no error in its decision, agreed that the listed examples in the definition of "innovative drug" are variations, and dismissed the appeal.

The majority also noted that the decision as to whether an enantiomer was sufficiently different as to be considered an "innovative drug" was a policy decision made when crafting the Regulations, and bearing in mind Canada's international treaty obligations. If a party feels that the Regulations are not all-inclusive, it is a matter for the Canadian government to remedy through the legislative process. Courts should not thwart the policy decision behind the definition of "innovative drug", especially where the wording of the provision was, in the minds of the majority, sufficiently precise.

In a very strong dissent, Justice Stratas disagreed and held that DEXILANT could be considered eligible for data protection and proposed that the matter be remitted to the Minister for reconsideration. In his dissenting reasons, Justice Stratas rejected a literal reading of the definition of "innovative drug" in the Regulations and adopted the purposive construction supported by Takeda.

Specifically, Justice Stratas reasoned that the substances listed as "variations" under the definition of "innovative drug" were examples of the types of substances that would normally be regarded as variations. He expressed the view that the controlling idea in the definition was whether or not a medicinal ingredient is really a "variation", and not whether the medicinal ingredient fell within the listed examples. Justice Stratas found that "variation" does not have a specific scientific meaning and that the evidence supported a conclusion that some enantiomers are quite different.

Further, Justice Stratas noted that the level of testing required to establish the safety and efficacy of a drug is relevant to a consideration of whether it should be entitled to data protection. For example, the drug submission requirements related to safety and efficacy for some enantiomers are the same as those for any new active substance. These considerations were found to be consistent with the relevant provisions of the international treaties which shape Canada's data protection regime.

Justice Stratas rejected a strict and literal interpretation of the definition because it would lead to results which are contrary to the purpose of the Regulations, as well as Canada's international treaty obligations. He found that the proper interpretation of the term "innovative drug" under the Regulations can include a drug such as DEXILANT.

As with the earlier decisions related to the drugs ELOXATIN and THALOMID, whether a drug is an "innovative drug" under the Regulations is not necessarily a straightforward analysis. In this case, even the FCA was divided as to whether the drug at issue qualified for data protection.

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