Minister of Health vs Celgene, 2013 FCA 43 (Gauthier, Sharlow, Nadon)

Summary – The Federal Court of Appeal (“FCA”) in a split decision denied Celgene’s request to have its “new” thalidomide drug product designated as an Innovative Drug (i.e., meaning not “previously approved” according to the Food and Drug Regulations (“Regulations”)).   Arguably, this decision brings some reasonable limits to the determination of an “Innovative Drug”.  This is a critical determination which currently awards an Innovative Drug manufacturer with an absolute 8 year market monopoly as part of data protection treaty requirements.

Analysis – The Federal Court below had interpreted “Innovative Drug” to cover thalidomide because thalidomide had been a prohibited/banned drug since 1962, and Celgene had done a lot of work to discover new, safe uses of the previously “shelved” drug.  Thalidomide was well known in Canada for being briefly approved for morning sickness and subsequently being found to cause serious birth defects/death in the early 1960s.  Health Canada issued a “withdrawal letter” in 1962 declaring thalidomide “a new drug” and thereafter only available to be sold for investigation “for the purpose of obtaining scientific and clinical information that could be used to support the safety of its use.”

The FCA first clarified that the lower court was incorrect to consider whether a new use could qualify as an Innovative Drug (para. 38).  None of the Regulations, Regulatory Impact Analysis Statement (“RIAS”) and relevant data protection treaties (NAFTA, TRIPS) referred to a new use.

The FCA determined the main statutory interpretation question as follows:  “not previously approved” refers to a drug that was never previously approved; it is not limited to those drugs that were simply not approved at the time of the brand name’s New Drug Submission (“NDS”).  The FCA considered dictionary definitions of “previously” and “new”.  Central to the FCA’s reasoning was the conclusion that NAFTA and TRIPS protect “certain innovations only” – in particular where a drug is “submitted for approval for the first time to the appropriate authority in the territory of a signatory state.”

The FCA accepted that thalidomide had an “exceptional history”, but found it was not enough to get around the strict tests required to be met for innovative drugs.  The FCA was clearly concerned that certainty was required for this test.  The Minister should not be evaluating the reasons/timing of drug withdrawal.  This would simply add more confusion, and perhaps lead to abuse.

The dissenting Mr. Justice Nadon focused on the “banned” status of thalidomide and found that its prior brief approval was nullified.  Health Canada had also requested that Celgene file a NDS covering “180 volumes of data” (and not merely an abbreviated submission).  Such a request “belies an underlying belief that thalidomide was, although not strictly innovative, best suited to occupy the space set out for an ‘innovative drug’.”  Mr. Justice Nadon relied on the fact that thalidomide could not be used as a Canadian reference product for subsequent generics; and that it was first available through the Special Access Programme (“SAP”) in 1995.  He reviewed Teva v Minister 2012 FCA 106 where the FCA had determined that prior SAP approval did not qualify as prior drug approval.  “It follows that since thalidomide was being accessed through the SAP, it was not approved for use in Canada.  The necessary implication is it cannot be ‘previously approved’.”  Once thalidomide was found unsafe, it could “no longer be considered as having been ‘previously approved’ for an approval process based on safety.”  In the dissent’s view, there was no dangerous precedent for unfairly extending data protection because “the fact situation of thalidomide is highly unusual and unlikely to reoccur.”

Practice Point – This case highlights that “previously approved” refers to previous national filings.  In the United States, thalidomide was “a new active substance as it had never been approved in 1960s in that country.”  The FCA’s reasoning is an example of statutory interpretation taking both purpose, context and underlying treaties into account.  Although the FCA majority explicitly refused to “stretch” the definition of “Innovative Drug” to cover thalidomide, Mr. Justice Nadon was focussed on the current safety status of the drug and refused to recognize it as previously approved merely because Health Canada briefly, and improperly, approved it over 50 years ago.  In many respects, the two decisions reflect a difference in opinion as to the significant aspects of an Innovative Drug.  The majority decision suggests a drug must be a new chemical entity with no prior safety/marketing approval.  The dissent suggests a drug can still be an Innovative Drug even if it had prior safety/marketing approval if Health Canada has revoked this approval such that the drug currently has no safety data (and in fact may have a “banned” status).  Arguably, this case illustrates the difficulty in pigeon-holing exceptional historical events into a current regulatory scheme.  Both the majority and dissent decisions illustrate that this categorization, in the example of thalidomide, is ill fitting.