December 2010 Special Edition

Court of Appeal upholds data protection

On December 9, 2010, the Federal Court of Appeal upheld the data protection provision of the Food and Drug Regulations: Canadian Generic Pharmaceutical Association v. Canada (Health), 2010 FCA 334.

As reported in the August 2009 edition of Rx IP Update, challenges by Apotex and the Canadian Generic Pharmaceutical Association ("CGPA") to the validity of the data protection provisions of the Food and Drug Regulations (section C.08.004.1) ("Data Protection Regulation") and Food and Drugs Act ("Act") (section 30(3)) were dismissed by Justice Mandamin of the Federal Court: Canadian Generic Pharmaceutical Association v. Canada (Health), 2009 FC 725. The Federal Court of Appeal has now dismissed the appeals of that decision.

Section 30(3) of the Act was amended on January 1, 1996, and grants the Governor in Council authority to enact regulations, as he deems necessary, for the purpose of implementing specified data protection provisions of the North American Free Trade Agreement ("NAFTA") and the Agreement on Trade-related Aspects of Intellectual Property Rights ("TRIPS") as set out in Annex 1C to the WTO Agreement.

The present version of the Data Protection Regulation came into force on October 5, 2006, and applies to an innovator's notice of compliance ("NOC") issued on or after June 17, 2006. Section C.08.004.1 prohibits a manufacturer who seeks a NOC on the basis of a direct or indirect comparison between its drug and an innovative drug from filing a submission for six years after the first NOC issued for the innovative drug. Further, the Minister may not issue a NOC for a period of eight years or eight years and six months if the results of certain pediatric clinical trials are submitted.

In the Court of Appeal, Justice Nadon writing for the panel, concluded that the Data Protection Regulation was properly delegated by Parliament to the Governor in Council and is intra vires the authority of the Governor in Council. The Court found that the data which Article 1711 of NAFTA and paragraph 3 of Article 39 of TRIPS seeks to protect is precisely the type of data in regard to which the Data Protection Regulation offers protection, i.e. the data found in an innovator's new drug submission for an innovative drug. The Court agreed with Justice Mandamin's finding that the information is not necessarily "secret".

The Court also concluded that the Data Protection Regulation is rationally and functionally connected to the federal legislative scheme for new drug approval and clearly contributes to balancing the effects of a process established by the Government to protect public health and safety through its jurisdiction to legislate in respect of the criminal law. The Court disagreed with Justice Mandamin's finding that the purpose of the Data Protection Regulation was to balance the commercial interests of innovators and generic drug manufacturers, but rather was to ensure that Canadians have reasonable access, at reasonable prices, to new, safe and effective drugs.

The Court of Appeal's decision ensures that Canada will continue to provide data protection. A decision invalidating data protection would have had far-reaching negative consequences for pharmaceutical innovation in Canada.

If Apotex or the CGPA wish to appeal further, leave must be granted by the Supreme Court.

Nancy P. Pei, Toronto

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