Case: Takeda Canada Inc v The Minister of Health and Attorney General of Canada

Drug: DEXILANT™ (dexlansoprazole)

Nature of case: Appeal from Federal Court dismissing an application for judicial review

Successful party: Minister of Health

Date of decision: January 18, 2013


This was an appeal from the decision of the Federal Court which had dismissed Takeda’s application for judicial review of the Minister’s refusal to list Takeda’s drug, DEXILANT, on the Register of Innovative Drugs, thereby denying data protection for the product. The Federal Court of Appeal found that the Minister had correctly interpreted the term “innovative drug” and Takeda’s appeal was dismissed. Of particular note is the dissenting opinion of Stratas J.A. who would have allowed Takeda’s appeal.

In 2009, Takeda submitted its New Drug Submission DEXILANT and sought data protection, pursuant to section C.08.004.1 of the Food and Drug Regulations (the “Regulations”). The Minister granted a Notice of Compliance for DEXILANT on July 22, 2010 but denied the request for data protection on the basis that DEXILANT did not qualify as an “innovative drug” as it is a “variation” of a prior approved drug. Takeda sought judicial review of the Minister’s decision. The Federal Court agreed with the Minister’s interpretation and the application was dismissed. Takeda appealed that decision.

Is DEXILANT an “innovative drug”?

DEXILANT is used in the treatment of gastroesophageal reflux and is a “new drug” in Canada. The question on appeal is whether DEXILANT qualifies as an “innovative drug” as defined under section C.08.004.1 of the Regulations.

DEXILANT contains the medicinal ingredient dexlansoprazole, which has not been previously approved by the Minister. However, dexlansoprazole is one of two enantiomers that make up lansoprazole, a medicinal ingredient that has been previously approved by the Minister. The Regulations define an “innovative drug” 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”. The issue before the Court is whether dexlansoprazole, an enantiomer of a previously approved medicinal ingredient, is a “variation” of an “innovative drug”.

The Majority Opinion

The Court held that the Minister and Federal Court correctly interpreted the definition of an “innovative drug” and as such, DEXILANT did not qualify for data protection. The Court focused predominantly on the ordinary meaning of the text and the importance of coherence in the enumerated examples of variations not considered for data protection. The Court reasoned that based on the Regulatory Impact Analysis Statement (“RIAS”) that accompanied the Regulations when they were amended in 2006, data protection should not be extended to the “variations”, including enantiomers, of a previously approved medicinal ingredient.

Takeda’s allegations of procedural unfairness were also dismissed by the Court.

he Dissenting Opinion of Stratas J.A. – Non-literal interpretation of an “innovative drug”

In contrast, Stratas J.A. held that DEXILANT could be considered eligible for data protection and proposed that the matter be remitted to the Minister for reconsideration. Stratas J.A. agreed with the majority that a “correctness” standard of review should be applied. However, he rejected a literal reading of subsection C.08.004.1 and preferred Takeda’s contextual and purposive interpretation.

Upon consulting the RIAS and previous decisions of the Minister , Stratas J.A. reasoned that the substances listed as “variations” under the definition of “innovative drug” – salts, esters, enantiomers, solvates or polymorphs – were examples of the types of substances that would normally be regarded as variations. He expressed the view that the “controlling idea in the subsection is whether or not a medicinal ingredient is a “variation” and not whether the medicinal ingredient falls within the five categories of substance.”

Stratas J.A. found that the extensive clinical program and related expense to establish the safety and efficacy of a drug are also factors to consider in determining whether the drug is materially different from a previously approved medicinal ingredient. These considerations are consistent with the relevant provisions of the World Trade Organization’s Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and the North American Free Trade Agreement (NAFTA) which shape the data protection provisions in Canada.

Stratas J.A. rejected a strict and literal interpretation of the definition because it will lead to results which are contrary to the purpose of the Regulations as well as Canada’s international obligations under TRIPS and NAFTA. He found that the proper interpretation of the term “innovative drug” under the Regulations can include a drug such as DEXILANT. Accordingly, he held that the Minister’s decision should be quashed and remitted for re-determination in light of the proper interpretation of an “innovative drug”.

Link to decision:

Takeda Canada Inc v Canada (Minister of Health), 2013 FCA 13