In 2018 we reported on a number of developments in life sciences IP and regulatory law. Our most-read articles were: #1 a June update on biosimilars (authored by Urszula Wojtyra); #2 a “live” summary chart of Vanessa’s Law developments (authored by Katie Lee); and #3 an article reporting on a decision that a use patent for infliximab was valid and infringed by Hospira’s biosimilar INFLECTRA (authored by Katie Lee and Urszula Wojtyra). We review these and other top developments below.

Decisions under appeal are noted with an *.

1. Biosimilars Update: Consultation on naming approaches; Janssen patent valid and infringed by INFLECTRA; CADTH environmental scans

Our most-read article this year was our mid-year update on biosimilars, including on 2018 biosimilar marketing approvals (there were four by year-end, with a December approval of BGP Pharma’s FULPHILA (pegfilgrastim), a biosimilar of NEULASTA) and ongoing litigation matters. There was a consultation on naming (January) and the Canadian Agency for Drugs and Technologies in Health (CADTH) revised its biosimilar review process (February). In March, our third most-read article reported on the Federal Court’s finding* that a patent for a use of infliximab (Janssen’s REMICADE) was valid and infringed by Hospira’s biosimilar INFLECTRA (approved in 2014). CADTH released two environmental scans relating to biosimilars: Biosimilars — Regulatory, Health Technology Assessment, Reimbursement Trends, and Market Outlook (January) and International Policies on the Appropriate Use of Biosimilar Drugs (October). A reminder that Health Canada’s listing of submissions under review includes biosimilars, which now includes sponsor names for new entries.

2. Proposed PMPRB amendments still under consideration; litigation matters pending

Proposed Regulations Amending the Patented Medicines Regulations remain under consideration; they were not finalized and in force on January 1, 2019, as originally planned. Potential changes to the Patented Medicine Prices Review Board (PMPRB)’s pricing criteria include expanding the list of comparator countries, but excluding the U.S. and Switzerland, and taking into account pharmacoeconomic value. The proposed amendments contributed to Canada’s appearance on the Office of the U.S. Trade Representative’s 2018 Priority Watch List. A steering committee on proposed reform and associated guidelines had its first meeting in June. Its work, and that of a technical working group, is ongoing (see latest status here).

Alexion’s application for leave to appeal a decision dismissing its challenge to the constitutionality of certain PMPBR provisions of the Patent Act was dismissed in June. Two other court cases are pending: (i) Alexion’s judicial review application of the Board’s SOLIRIS decision on use of the Board’s Guidelines was heard; a decision is pending and (ii) the PMPRB’s appeal relating to Galderma’s DIFFERIN on the jurisdictional issue of whether an invention “pertains to” a medicine is scheduled to be heard by the Federal Court of Appeal (FCA) on January 17, 2019.

The PMPRB’s 2017 Annual Report was released in August 2018.

3. Certificates of supplementary protection

Certificates of supplementary protection (CSPs) provide an additional patent-like protection term of up to two years, and are intended to partly compensate for the time required to obtain Canadian regulatory approval. Canada’s regime came into force on September 21, 2017. We published a chart comparing CSPs to European Supplementary Protection Certificates and a first anniversary update, which provides a summary of the elements of the regime (including key deadlines) and the nature of the rejections to that date. GlaxoSmithKline’s application for judicial review of the rejection of a SHINGRIX CSP application remains pending.

4. Amended PMNOC Regulations: Early procedural decisions, updated Health Canada guidance

Substantial amendments to the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations) came into force on September 21, 2017 (see our comparison to the Hatch-Waxman regime). On May 11, Health Canada issued updated Guidance on matters including Patent Register eligibility of CSPs. In July, Health Canada released the Therapeutic Products Directorate Statistical Report 2017/2018 providing an overview of its administration of the PMNOC Regulations and the data protection regime for the year ending March 31, including court activity under both regimes. We provided a first anniversary update with a summary of the various procedural decisions within the first year. Further procedural decisions include: (i) an innovator was not precluded from asserting a patent under the amended PMNOC Regulations after being unsuccessful on an invalidity allegation under the pre-amended PMNOC Regulations; (ii) a concurrent trial on common invalidity issues involving two generic manufacturers was ordered; and (iii) claims for damages and profits were not struck. By November 2019, barring any extensions of the statutory stay, all applications under the pre-amended PMNOC Regulations will be concluded, marking the end of a 26.5-year era.

5. Decisions on the merits: PMNOC applications and actions

There were only three PMNOC decisions on the merits in 2018: (i) Shire was successful* against Apotex in a consolidated prohibition application and impeachment action relating to its patent for lisdexamfetamine (a prodrug of amphetamine, VYVANSE); (ii) Apotex was successful in its obviousness allegation relating to Eli Lilly’s patent for use of prasugrel (EFFIENT) in combination with aspirin in diseases caused by thrombus or embolus; and (iii) Ranbaxy was successful in its non-infringement allegation relating to Valeant’s modified-release tablet formulation patent covering its bupropion extended-release tablets (WELLBUTRIN XL).

There were also three decisions on the merits in impeachment/infringement actions: (i) Janssen was successful* in infliximab (see #1 Biosimilars, above) on infringement and validity of a patent relating to the use of infliximab in combination with methotrexate for the treatment of rheumatoid arthritis, including on the issue of obviousness (the quantification stage is ongoing); (ii) Shire was successful* in lisdexamfetamine (consolidated with the PMNOC application noted above); and (iii) Teva was successful* in responding to Janssen’s counterclaim for infringement of three patents relating to bortezomib (see #6 Section 8 damages, below); the compound patent and a formulation patent were found obvious and a process patent was found not infringed. The Federal Court separately held that AstraZeneca was entitled to a declaration of infringement in AstraZeneca’s esomeprazole (NEXIUM) infringement action against Apotex (following the Supreme Court of Canada decision striking down the promise doctrine).

There were no appeal decisions on the merits in PMNOC applications or liability-phase decisions in infringement/impeachment actions, although the FCA did confirm that an infringer does not have the right to elect a patentee’s remedy.

6. Section 8 and other claims following failed PMNOC Regulations proceedings: No section 8 liability for valid and infringed patent in NEXIUM proceedings; Teva succeeds in olanzapine section 8 appeal and bortezomib section 8 action

There were three decisions on the merits (including one appeal) regarding claims under pre-amended section 8: (i) AstraZeneca was found not liable to Apotex for any section 8 damages relating to its esomeprazole magnesium product (a generic version of AstraZeneca’s NEXIUM), as Apotex’s claim would be fully offset by its liability for patent infringement in the but-for world; (ii) the FCA dismissed Eli Lilly’s appeal of a decision awarding $70 million in section 8 damages to Teva, relating to its lost olanzapine sales (a generic version of Eli Lilly’s ZYPREXA), but granted Teva’s cross-appeal seeking lost pipefill sales and an adjustment for under-reporting of sales (Eli Lilly’s subsequent application for leave to appeal was dismissed); and (iii) the Federal Court granted* Teva’s section 8 claim relating to bortezomib (Janssen’s VELCADE), rejecting the defence of infringement and dismissing the counterclaim for infringement (see #5 Decisions on the merits, above).

Separately, in November, in an action by Apotex for compensation from Sanofi and Schering under the Ontario Statute of Monopolies, U.K. Statute of Monopolies (premised on the assertion of an invalid patent) and the Trade-marks Act, the Ontario Court of Appeal granted Sanofi and Schering leave to amend their defences to plead that the Federal Court relied on wrong legal principles in finding the patent at issue invalid in light of special circumstances arising from the subsequent Supreme Court of Canada’s NEXIUM decision striking down the promise doctrine.

7. Damages and accounting references: Teva’s $19 million levofloxacin damages appeal dismissed; $61 million perindopril profits award against Apotex stands; $75 million cefaclor prejudgment damages interest award against Apotex remitted for reconsideration

The FCA dismissed Teva’s appeal relating to Janssen’s damages ($19 million) for infringement of Janssen’s patent for levofloxacin (LEVAQUIN) and affirmed that Janssen U.S. had standing to make a claim, i.e., it was not required to demonstrate that it had engaged in conduct in Canada that would otherwise amount to infringement. Teva’s subsequent application for leave to appeal was dismissed.

Servier and ADIR were successful* in the redetermination of the profits reference relating to perindopril (Servier’s COVERSYL): the Federal Court again dismissed Apotex’s non-infringing alternative (NIA) defence, finding that Apotex would not have called on foreign third parties to manufacture perindopril to supply Apotex affiliates in the U.K. and Australia. The original $61 million profits award against Apotex was therefore re-affirmed.

The FCA allowed in part Apotex’s appeal of a decision awarding Eli Lilly over $100 million for Apotex’s infringement of patents related to cefaclor. The Federal Court had awarded Eli Lilly $75 million in prejudgment interest as damages for the lost time value of its lost profits. The FCA remitted the decision to the Federal Court for reconsideration solely on the issue of interest. The Court also provided guidance regarding the application and objective of the NIA defence.

8. Treaty/Legislative Updates: CUSMA, proposed amendments to Patent Rules, Patent Act amendments

The United States-Mexico-Canada Agreement (CUSMA or USMCA), which (if ratified) will replace the North America Free Trade Agreement (NAFTA), was signed on November 30. CUSMA’s required changes include: (i) an extension of the data protection term for biologics from eight to ten years, which must be implemented within five years of CUSMA entering into force and (ii) patent term adjustment to compensate for Patent Office delays.

Significant proposed amendments to the Patent Rules (mainly to implement the Patent Law Treaty) were released on December 1. See our IP Update for twelve notable proposed changes and tips. The amendments are expected to come into force in 2019.

Amendments to the Patent Act (Bill C-86, Budget Implementation Act, 2018, No. 2) came into force on December 13 and include: (i) admissibility of prosecution histories to rebut patentee’s representations as to patent construction; (ii) codification of an experimental use exception to infringement; and (iii) expansion of the scope of prior user rights.

9. Health Canada: Strengthening post-marketing oversight, aligned reviews with health technology assessment organizations (HTAs), generic submissions under review now public

The Protecting Canadians from Unsafe Drugs Act (Vanessa’s Law), which was approved on November 6, 2014, amended the Food and Drugs Act and granted the Minister of Health new post-marketing oversight powers over therapeutic products. See our summary chart (our second most-read article) of the related developments to date including those reported in our mid-year update (#9), a guidance document on notifying Health Canada of foreign actions and revised guidance documents on post-notice of compliance changes. In July, the Federal Court ordered Health Canada to release requested copies of all sections of all clinical study reports and all electronic datasets from certain clinical trials under the confidential business information provision.

As of June 22, Health Canada permitted biological (including biosimilar) and pharmaceutical new drug submission sponsors to seek aligned reviews between Health Canada and CADTH and l’Institut national d’excellence en santé et en services sociaux (collectively, the HTAs).

Health Canada’s Drug Submission Performance Annual Reports for the year ending March 31, 2018 report on review activity including approval times. A Drug and Medical Device Highlights 2017 report from July 2018 includes numbers on new drugs and medical devices approved, brief details of approvals, post-market surveillance, and 2017 accomplishments.

In August, the Minister of Health made an interim order permitting the importation and sale of FDA-approved epinephrine auto-injectors, AUVI-Q, for use in emergency treatment of life-threatening allergic reactions, to address the shortage of EpiPen products.

Beginning October 1, Health Canada expanded its Submissions Under Review list (accessible here), including to extend to abbreviated new drug submissions (submissions for generic products)(see Generic Submissions Under Review (GSUR) List) and to add sponsor names to new drug submissions and supplemental new drugs submissions. Health Canada also expanded its Regulatory Decision Summaries (accessible here) to extend to final positive and negative decisions for ANDSs and supplemental ANDSs that may be of interest, including where it deviated from guidance. In December, Health Canada released a helpful comprehensive list of its drug and medical device databases, including the above.

Also in December, Health Canada released an action plan for medical device reform.

10. Consultation on National Pharmacare

On February 27, the creation of an Advisory Council on the Implementation of National Pharmacare (Council) was announced and on April 19, the Standing Committee on Health released a report advocating for a national pharmacare program, specifically, a single payer universal publicly funded prescription drug coverage program for all Canadians. On June 20, the Council was launched, together with release of a Discussion Paper and the opening of a public consultation, which closed on September 28.

11. Other litigation: Apotex succeeds in claim against CRO; FCA dismisses Apotex’s appeal in judicial review of Health Canada decision seeking further information from facilities in India

Released in December 2017 but as we reported in January, the Ontario Superior Court of Justice held that Apotex was entitled to over $11million, plus interest, for losses flowing from delays in the U.S. Food and Drug Administration (FDA)’s approval of Apotex’s amoxicillin-clavulanic acid and levodopa-carbidopa products caused by the contractual breaches and negligence by MDS Pharma Services, a contract research organization (CRO).

In August, the FCA dismissed Apotex’s appeal of the dismissal of its application for review of Health Canada’s decision to require Apotex to submit additional information for products manufactured or tested in Apotex’s facilities in India. Apotex has sought leave to appeal.