The Supreme Court of Canada recently dismissed Takeda Canada Inc.'s application for leave to appeal the decision of the Federal Court of Appeal (Takeda Canada Inc. v. The Minister of Health et al. 2013 FCA 13), which dealt with the eligibility of DEXILANT (dexlansoprazole) for listing on the Register of Innovative Drugs pursuant to the data protection provisions of the Food and Drug Regulations.  This dismissal by the Supreme Court, taken together with the Federal Court of Appeal's decision in Canada (Health) v. Celgene Inc. 2013 FCA 43, denying data protection to THALOMID, has significantly constrained the granting of data protection to drugs in Canada.

Enantiomers of a Previously Approved Drug Are Not Innovative

In the case of DEXILANT, the Minister of Health refused to list the drug on the Register on the ground that dexlansoprazole is a "variation" (i.e. an enantiomer1) of the previously approved drug, lansoprazole.  The Minister took a strict approach in applying the Regulations2, which afford protection to drugs that are not "a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph".

Takeda sought review of the Minister's decision in the Federal Court, asserting that salts, esters, enantiomers, solvates, and polymorphs are only examples of what might be considered "a variation" and that "variation … such as a[n] … enantiomer" does not mean that all enantiomers are to be considered variations.  In Takeda's view, data protection should be extended to a drug if the generation of clinical and pre-clinical data in support of the drug's regulatory approval required "considerable effort".  Essentially, Takeda's argument was that the requirement for extensive safety and efficacy data necessarily means that a drug cannot be a "variation" of a previously approved medicinal ingredient.

Takeda argued that the granting of data protection for DEXILANT would be consistent with the wording of the Regulations, the purpose behind the data protection provisions, and Canada's international treaty obligations.  In support of its position, Takeda pointed to previous decisions wherein the Minister granted data protection to other moieties that allegedly fall within the definition of a variation (i.e. enantiomers and esters of previously approved medicinal ingredients) and argued that the inconsistent approach taken in respect of DEXILANT constituted breach of the duty of fairness owed by the Minister when making discretionary decisions.

The Minister's decision was upheld at first instance and on January 18, 2013 by the majority of the Federal Court of Appeal.  In considering the interpretation of the definition of an "innovative drug", the majority of the Federal Court of Appeal held that the definition in the Regulations is sufficiently precise and that its ordinary meaning should play the dominant role in its interpretation.  Specifically, the Court found that the definition provided that salts, esters, enantiomers, solvates and polymorphs are examples of "a variation" and that the Regulations would be incoherent if the enumerated examples of variations are, in some circumstances, not variations.3  As for the examples of data protection granted previously to other alleged variations of approved drugs, the Court held that the Minister's interpretation of the definition of innovative drug in other cases was not determinative of the interpretation in relation to DEXILANT.

The majority also referred to the Regulatory Impact Analysis Statement (RIAS)4 which accompanied the data protection provisions of the Regulations and noted that the text of the RIAS suggested that the nature of previously submitted clinical data should only be considered for substances other than the enumerated variations, when deciding whether or not data protection should be granted.  Moreover, the Court noted that prior to implementing the data protection provisions in 2006, Parliament considered the specific issue of whether data protection should extend to enantiomers, among other moieties, and had concluded that it should not.

Finally, the Court noted that the data protection provisions were intended to implement Canada's international treaty obligations in relation to protection of "new chemical entities" and had been promulgated following consideration by Parliament of the meaning of this definition.  Accordingly, it had been open to Parliament to decide, as a matter of policy, that salts, esters, enantiomers, solvates and polymorphs were not sufficiently different to be "new chemical entities" entitled to data protection.  In the Court's view, if the data protection provisions are under-inclusive, it is up to Parliament to craft a remedy.

With the Supreme Court of Canada's dismissal of Takeda's application for leave to appeal, it has been established that salts, esters, enantiomers, solvates and polymorphs of previously approved medicinal ingredients are variations of those ingredients and do not fall within the definition of "innovative drug", irrespective of the extent and nature of the data submitted in support of their approval.  These five categories of substances are automatically excluded from the definition of "innovative drugs" and cannot benefit from data protection.

Data protection does not extend to approvals of drugs withdrawn from the market for new uses

In the case of THALOMID, the Minister of Health refused to list Celgene Inc.'s drug on the Register on the ground that thalidomide had been previously approved in Canada, although the drug had been withdrawn from the market for more than 40 years.  Celgene sought review of the Minister's decision in the Federal Court.  The main issue was whether THALOMID contained a medicinal ingredient not previously approved in accordance with the definition of "Innovative Drug" in the Regulations.

The approval history of thalidomide is infamous in the annals of Canadian history.  Thalidomide received approval for sale in Canada in 1960 and 1961 under the brand names KEVADON and TALIMOL, respectively, for sleeplessness and other minor ailments experienced by pregnant women.  In 1962, the Department of Health ordered the permanent withdrawal of the drug from the Canadian market, due to potentially serious adverse effects leading to birth defects and fetal mortality.  A marketing authorization was issued in 20105 for a new use, whereupon the Minister advised Celgene that THALOMID would not be eligible for data protection because thalidomide had been previously approved in Canada.

The Federal Court found that THALOMID qualified for data protection based on the following combined facts: (i) the prior approval of thalidomide was short lived and should never have been given at the time; (ii) thalidomide was effectively banned until Celgene received marketing authorization for THALOMID (for a new indication); and (iii) marketing authorization was granted on the basis of completely new studies and data.  Following an appeal by the Minister of Health, the Federal Court of Appeal overturned the decision of the lower court and upheld the Minister of Health's decision to refuse to list THALOMID on the Register.

In rendering its decision, the Federal Court of Appeal focussed on the meaning of "approved".  Celgene asserted that "approved" refers to the status of a medicinal ingredient at the time a manufacturer files a submission for marketing authorization with Health Canada and that, at the time Celgene filed its submission, thalidomide was a prohibited drug.  The Minister argued that the word "approved" in the Regulations is qualified by the adverb "previously", which supports its view that one must look at an action which took place in the past rather than at the current status of the drug.  The Court sided with the Minister's interpretation.

Celgene also asserted that the primary purpose and object of the data protection provisions of the Regulations, and the international treaties upon which they are based, is to promote innovation and protect innovators against unfair use of their confidential data gathered at significant cost.  While the Court of Appeal did not dispute the fact that Celgene had to submit a considerable amount of costly, confidential data to support of the marketing approval for THALOMID, this did not justify stretching the language of the definition of "innovative drug".  The Court noted that Parliament had the power to extend the protection granted under the data protection provisions of the Regulations to new indications for previously approved compounds, but had chosen not to do so, based on the definition of innovative drug contained within the Regulations.


These two decisions, taken together, are troubling for innovators.  It is now clear that the cost and/or effort expended by an innovator to generate data in support of a submission to Health Canada for marketing authorization of a new drug is not a factor in determining whether the drug qualifies for data protection under the Regulations.  This position may have a chilling effect on the research and development of drugs that fall within the definition of a "variation" of a previously approved drug, but require extensive data to support their approval.

This chilling effect may be especially acute in the burgeoning field of personalized medicine; that is, the identification of patients who may potentially benefit from, or display a different adverse event profile in response to administration of a specific drug.  One of the potential advantages of the personalized medicine approach is to facilitate the reintroduction (for specific individuals) of drugs that have been withdrawn from the market due to severe adverse events.6  The recent decisions relating to data protection tend to reduce the likelihood of an innovator investing significant resources to identify drug candidates for which a new marketing authorization for an unapproved indication in a specific patient subgroup may be advantageous.

In light of the comments of the Federal Court of Appeal in the DEXILANT and THALOMID decisions, innovative drug manufacturers may want to focus their efforts on lobbying Parliament to revisit the definition of drugs eligible for data protection.  With the signing of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (which has been rumoured to include an extension to the data protection term for drugs), expected imminently, Parliament may now be more receptive to recommendations from innovative drug manufacturers on the types of drugs that should be considered "innovative" for the purposes of data protection.