Rx IP Update - May 2017

by Smart & Biggar

Smart & Biggar

Federal Court of Appeal finds that Apotex did not fail to mitigate its damages in relation to Apo-Trazodone drug submission

by Abigail Smith »

On April 6, 2017, the Federal Court of Appeal overturned the Federal Court’s finding that Apotex failed to mitigate the damage it incurred as the result of Health Canada’s misfeasance in public office and negligence in its processing of Apotex’s drug submission for Apo-Trazodone: Apotex Inc v Canada, 2017 FCA 73, varying 2014 FC 1087 (previously reported here). Apotex’s appeal, and Health Canada’s appeal and cross appeal, were otherwise dismissed.

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Bill C-30 receives Royal Assent

As previously reported here, Bill C-30 was passed by the Senate on May 11, 2017. Bill C-30 is the bill that will implement the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). On May 16, 2017, the Bill received Royal Assent and became an Act. However, apart from certain coordinating amendments, the Act will not come into force until there is an Order in Council. Further, before many provisions come into force, regulations will need to be registered.

Supreme Court of Canada dismisses Apotex’s application for leave to appeal double-patenting decision

On April 28, 2017, the Supreme Court of Canada dismissed Apotex's application for leave to appeal a decision of the Federal Court of Appeal (reported here) upholding an Order prohibiting the Minister from granting an NOC to Apotex in relation to its generic version of Eli Lilly's CIALIS (tadalafil) until the expiry of Canadian Patent No. 2,226,784. The Federal Court of Appeal's reasons clarified the test for obviousness-type double patenting and addressed the relevant date for the double-patenting analysis, as well as provided remarks on the distinction between prior art and common general knowledge.

Case No. 37368


Health Canada announces consultations on proposed changes to Patented Medicines Regulations. As reported here, on May 16, 2017, Minister of Health Jane Philpott announced a consultation regarding proposed amendments to the Patented Medicines Regulations that would significantly affect the PMPRB’s approach to drug price evaluation. Key proposed changes include: new factors in determining whether the price of a drug is excessive; expanding the list of comparator countries used to determine whether a price is excessive, but excluding the US and Switzerland; and requiring disclosure of all indirect price reductions, such as rebates and discounts. The consultation period is open until June 28, 2017, and the consultation document can be found here. Based on remarks provided by Minister Philpott to the Economic Club of Canada, the proposed regulatory amendments are expected to be published in the Fall of 2017 in Part I of the Canada Gazette for further feedback, with ultimate implementation in place no later than the end of 2018. The Vice-chairperson of the PMPRB issued a statement welcoming the actions to “strengthen and modernize [the PMPRB’s] pricing framework to reduce the cost of prescription drugs.”

New annual report on drug market entry. On April 11, 2017, the PMPRB published the first edition of Meds Entry Watch, a new annual publication that provides information on recently launched drugs in Canada and select international markets. The inaugural edition provides an analysis of Canadian and select international markets for 2009 to 2014, and a preliminary analysis of drugs launched in 2015.

Release of Annual Public Drug Plan Expenditure Report focusing on 2015-2016 fiscal years. On May 24, 2017, the PMPRB released the third edition of CompassRx, an annual report published under the National Prescription Drug Utilization Information System research initiative. CompassRx provides insight into drivers of drug expenditures in select Canadian public drug plans. The key findings reported include:

  • prescription drug expenditures of Canadian public drug plans increased by 9.9% ($1 billion) over the previous fiscal year, after years of low growth, and
  • drug costs, which accounted for almost 75% of the total expenditures, increased by 12%, driven primarily by the increased use of higher-cost patented drugs.

Health Canada News

Proposed amendments to Food and Drug Regulations to enable importation of drugs that address an urgent public health need. Health Canada has proposed amendments to the Food and Drug Regulations to allow importation and use of drugs that have been authorized for sale in the United States, European Union, or Switzerland but not yet authorized in Canada. The Minister of Health would maintain a “List of Drugs for an Urgent Public Health Need”. Drugs could be added to the list by the Minister upon notification of an urgent public health need by certain public health officials, and withdrawn from the list one year after the most recent notification. As explained in the news release, the motivation for the proposed Regulations includes the current opioid crisis, as well as pandemic or other public health emergencies.

Further proposed Vanessa’s Law amendments coming to the Food and Drug Regulations and Medical Devices Regulations. On April 22, 2017, the Government of Canada published proposed Regulations Amending the Food and Drug Regulations (Vanessa’s Law). Some of the proposed Regulations support the coming into force of certain provisions of Vanessa’s Law, which received Royal Assent on November 6, 2014 (reported most recently here). In particular, the proposed Regulations establish the rules needed to structure the exercise of the new powers to require assessments, tests and studies under sections 21.31 and 21.32 of Vanessa’s Law. The proposed Regulations also support post-market drug safety by creating new foreign incident reporting rules (further to section 30(1.2)(d) of the Food and Drugs Act), and repealing paragraph C.08.005.1(1)(a) thus eliminating the requirement for the filing of clinical case reports in the filed submission or supplement. The proposed amendments can only come into force once subsection 6(2) of Vanessa’s Law comes into force. An order in council would bring into force this subsection and sections 4, 10 and 11 of Vanessa’s Law six months following the publication of the Regulations in the Canada Gazette, Part II. Interested parties may make representations concerning the proposed Regulations within 75 days of April 22, 2017.

Updated guidance document on data protection. On May 17, 2017, Health Canada published an update to the guidance document Data Protection under C.08.004.1 of the Food and Drug Regulations. As explained in the notice, this update clarifies the administration of the data protection regime in view of jurisprudence on what constitutes an “innovative drug”, reflects current administrative practices for maintenance of the Register of Innovative Drugs and the application of the six-month pediatric extension, and provides direction regarding electronic submissions and correspondence.

Proposal to proactively release clinical data after completion of regulatory review process, and final guidance on disclosure of confidential business information. Health Canada has proposed to proactively make certain clinical information about the safety and efficacy of drugs and medical devices available to the public once the regulatory review process is complete. To that end, Health Canada released the white paper Public Release of Clinical Information in Drug Submissions and Medical Device Applications in March. The white paper “sets out the policy objectives, rationale and considerations for future regulations that would specify that certain clinical information contained in drug submissions or medical device applications would not be treated or cease to be confidential business information following a final regulatory decision and that would authorize the public release of that information.” Interested parties have until May 26, 2017 to provide feedback on the white paper. Health Canada has also released the final guidance document Disclosure of Confidential Business Information under Paragraph 21.1(3)(c) of the Food and Drugs Act. Health Canada also maintains a list of completed requests for disclosure of confidential business information (CBI). CBI was disclosed in response to two of the twelve completed requests in 2015 and 2016.

Notice regarding change in location of Summary Basis of Decision Documents and Regulatory Decision Summaries. On March 29, 2017, Health Canada announced that Summary Basis of Decision documents and Regulatory Decision Summaries for pharmaceuticals, biologics, and medical devices are now only available on the Canada.ca website and can be located by using the Drug and Health Product Register.

Health Canada confirms date for mandatory use of eCTD format. Health Canada has confirmed January 1, 2018 as the date for mandatory use of the Electronic Common Technical Document (eCTD) format for filing of certain types of regulatory activities/transactions. Types of filings that must be submitted in the eCTD format, or are recommended to be submitted in the eCTD format are listed here.

Notice regarding IP Hold for Notifiable Change Submissions. On April 7, 2017, Health Canada announced that, as of May 1, 2017, its Office of Submissions and Intellectual Property will no longer notify sponsors by way of an Intellectual Property Hold Letter that the review of a notifiable change submission is complete and has been placed on “IP Hold”. Instead, the status of the notifiable change submission will be updated to “IP Hold” in the Drug Submission Tracking System - Industry Access (DSTS-IA) to notify sponsors once the review is complete.

CADTH releases the 4th edition of the Guidelines for Economic Evaluation of Health Technologies: Canada

On March 28, 2017, CADTH published the fourth edition of the Guidelines for Economic Evaluation of Health Technologies: Canada, which set out the best practices for determining the economic value of health technologies. The updated guidelines account for methodological advancements that have occurred in the economic evaluation of health technologies since the publication of the last edition of the guidelines in 2006. Advancements in methodology include a probabilistic analysis, which accounts for uncertainty in source data. The guidelines were authored by a working group of leading Canadian health economists and created through consultation with patient and industry groups.

Federal Court issues Trial Management Guidelines

On April 28, 2017, the Federal Court released a Notice to the Parties and the Profession: Trial Management Guidelines. The Federal Court has adopted these Guidelines in order to ensure the most efficient, expedient and proportionally fair use of trial time for actions scheduled for five days or longer. The Guidelines address both pre-trial case management (including timing of motions and trial management conferences, and timing of exchange of materials between parties and with the Court) and trial conduct (including limiting expert examination in chief, use of slide presentations with experts, encouraging use of witness statements and fact stipulations, compendia in electronic and paper format). The current Guidelines are further to the Federal Court’s previous Notice to the Profession, reported here, which aimed to increase proportionality in complex litigation before the Court.

Court Decisions

Federal Court of Appeal agrees with Teva’s allegations of obviousness regarding patent claiming atazanavir sulfate. On April 11, 2017, the Federal Court of Appeal dismissed Bristol-Myers Squibb’s appeal of the decision dismissing its prohibition application as it related to Patent No. 2,317,736 (“736 patent”) against Teva for atazanavir sulfate (Bristol-Myers Squibb’s (BMS) REYATAZ): Bristol-Myers Squibb Canada Co v Teva Canada Limited, 2017 FCA 76. As reported here, BMS was successful in the court below in obtaining an order of prohibition in respect of an earlier expiring patent, but was unsuccessful in respect of the 736 patent.

On appeal, BMS submitted the lower court erred when it found that the atazanavir bisulfate claimed in the 736 patent was obvious in spite of the fact that only one of the three elements of inventive concept, improved bioavailability over the free base of atazanavir, was predictable, while the other two elements – crystallinity and stability – were not. The Federal Court of Appeal disagreed with BMS’s submission that all aspects of an inventive concept must be highly predictable in order to establish obviousness, holding that such a categorical approach was inappropriate.

However, the Federal Court of Appeal held that the lower court erred in its identification of the inventive concept of the 736 patent by focussing on the properties of atazanavir bisulfate. Rather, the Court of Appeal held that the “inventive concept” was not “materially different” from “the solution taught by the patent”, which was “atazanavir bisulfate, a salt of atazanavir which is pharmaceutically acceptable because it has equal or better bioavailability than the atazanavir free base.” The limited bioavailability of atazanavir was the source of the motivation to pursue the solution. The Federal Court of Appeal then held that there was no difference between the prior art and the inventive concept, or such difference as there was between the two could be bridged by a skilled person without inventiveness, as a skilled person would have expected that a salt screen would likely identify at least one salt with improved bioavailability, and it was routine work to characterize the properties of such a salt.

Application regarding Apotex’s dasatinib dismissed. On March 21, 2017, the Federal Court dismissed BMS’s application for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Apotex for its dasatinib product (BMS’s SPRYCEL) until after the expiry of Patents Nos. 2,366,932 and 2,519,898: Bristol-Myers Squibb Canada v Apotex Inc, 2017 FC 296. The Court found that (i) Apotex’s allegation of invalidity on the basis of lack of soundly predicted utility was justified with respect to claim 27 of the 932 patent, and (ii) Apotex’s allegation of invalidity on the basis of obviousness and double patenting was justified with respect to claims 1 and 3 of the 898 patent. BMS has appealed.

Apotex’s application for judicial review of Minister of Health’s decision dismissed. On March 27, 2017, the Federal Court dismissed Apotex’s application for judicial review of a decision of the Therapeutic Products Directorate (TPD). By this decision, the TPD continued to require Apotex to provide additional information in respect of NOC submissions for products that were manufactured or tested at Apotex’s facilities in India. The Court found that the decision was not improper or unreasonable with regard to the two submissions for which data integrity issues remain outstanding (varenicline and sitagliptin): Apotex Inc v Canada (Health), 2017 FC 315. Apotex has appealed.

Apotex’s motion at trial to add additional NIA defence dismissed. The Federal Court dismissed Apotex’s motion to amend its pleading during the hearing of the quantification phase of an infringement action relating to omeprazole (LOSEC): AstraZeneca Canada Inc v Apotex Inc, 2017 FC 378. The amendment sought to add a further non-infringing alternative (NIA) defence to the NIA defence already pleaded. Apotex first raised the proposed amendment shortly before trial and brought its motion during trial. By this point in the proceeding, AstraZeneca had already elected to pursue an accounting of Apotex’s profits. Justice Barnes found that “[t]he complications arising from Apotex’s failure to raise this NIA issue in a timely way are simply too profound to be remedied by monetary relief.” Apotex has appealed.

Prohibition application and impeachment action consolidated without consent. In reasons only recently released, on October 3, 2016, a Prothonotary of the Federal Court allowed Shire’s motion to partially consolidate a prohibition application and an impeachment action, both concerning Patent No. 2,527,646: Apotex Inc v Shire LLC, 2016 FC 1099 (Proth). The 646 patent relates to Shire’s lisdexamfetamine dimesylate capsules (VYVANSE). Partial consolidation had been ordered on consent in earlier, unrelated proceedings concerning imatinib mesylate (GLEEVEC). In the instant case, Apotex did not consent, but the Court rejected its assertions of prejudice as unsubstantiated. The Court was satisfied that Shire’s proposal would eliminate wasteful duplication, lead to significant savings of time and expense for both parties, and represent the most efficient and judicious use of the Court’s resources. The Federal Court further observed that it was Apotex’s decision to trigger both proceedings at the same time. Apotex’s appeal was dismissed on February 6, 2017: Apotex Inc v Shire LLC, 2017 FC 139. Justice Strickland held that the Prothonotary did not err in determining that any prejudice to Apotex, which Apotex grounded in loss of various tactical advantages, did not outweigh the benefits of consolidation.

Federal Court of Appeal remits decision to refuse licence for natural health product to Minister of Health for redetermination. As previously reported, the Federal Court issued an order of mandamus requiring the Minister of Health to issue a licence to The Winning Combination (TWC) for its natural health product RESOLVE. On May 15, 2017, the Federal Court of Appeal set aside the order of mandamus, and ordered that the matter be remitted to the Minister for redetermination: Canada (Health) v The Winning Combination Inc, 2017 FCA 101.

The Court of Appeal held that the Federal Court erred in extrapolating its finding of a reasonable apprehension of bias to Health Canada as a whole, and in placing the onus on Health Canada to prove that it could conduct a fair redetermination. The Court of Appeal was “not satisfied that there was evidence upon which it could be concluded that the responsible branches within Health Canada, or its senior management, were incapable of discharging their regulatory obligations in a fair and impartial manner”. Further, the Court of Appeal also found – on the basis of fresh evidence – that there was evidence of a scientific dispute as to whether the product was correctly classified as a natural health product. In view of this dispute, TWC had no clear right to the licence.

PMNOC proceedings


insulin glargine (LANTUS)


Sanofi-Aventis Canada Inc and Sanofi-Aventis Deutschland GmbH


BGP Pharma ULC, Mylan EPD and The Minister of Health

Date Commenced:

April 20, 2017

Court File No.:



Application for Order of prohibition until expiry of Patent No. 2,490,116. BGP alleges non-infringement and invalidity.



adalimumab solution (HUMIRA)


AbbVie Corporation and AbbVie Biotechnology Ltd


Samsung Bioepis Co Ltd and The Minister of Health

Date Commenced:

April 25, 2017

Court File Nos.:

T-598-17, T-599-17, T-604-17, T-605-17


Four separate applications regarding new drug submission No. 203250 for Orders of prohibition until expiry of Patents Nos. 2,504,868, 2,385,745, 2,847,142, 2,494,756. Bioepis alleges non-infringement (except for the 868 and 745 patents) and invalidity.



adalimumab solution (HUMIRA)


AbbVie Corporation and AbbVie Biotechnology Ltd


Samsung Bioepis Co Ltd and The Minister of Health

Date Commenced:

April 25, 2017

Court File Nos.:

T-600-17, T-601-17, T-602-17, T-603-17


Four separate applications regarding new drug submission No. 203292 for Orders of prohibition until expiry of Patents Nos. 2,504,868, 2,385,745, 2,847,142, 2,494,756. Bioepis alleges non-infringement and invalidity.

Other Proceedings

Pharmaceutical product/device:

Auto Injectors


Seedlings Life Science Ventures, LLC


Pfizer Canada Inc

Date Commenced:

April 25, 2017

Court File No.:



Action for a declaration of validity and infringement of Patent No. 2,486,935.

To check the status of Federal Court cases, please click here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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