The Supreme Court of Canada denied leave to appeal today from the Federal Court of Appeal (the “FCA”) decision in Takeda Canada Inc. v. Minister of Health, Attorney General of Canada, 2013 FCA 13. This proceeding arises from the Minister’s refusal to list Takeda’s drug, DEXILANT, on the Register of Innovative Drugs and provide data protection in accordance with section C.08.004.1 of the Food and Drug Regulations, CRC c 870, as amended by the Regulations Amending the Food and Drug Regulations (Data Protection), SOR/2006-241.

The data protection regulations were enacted to comply with Canada’s obligations under Article 1711 of the North American Free Trade Agreement, 1992, 32 ILM 296 ("NAFTA") and paragraph 3 of Article 39 in the Agreement on Trade-Related Aspects of Intellectual Property Rights, 1869 UNTS 299 ("TRIPS"). These agreements require that “…where a person submits undisclosed data for approval of a pharmaceutical product, and the product utilizes a ‘new chemical entity’, signatory states commit to preventing other persons from making ‘unfair commercial use’ of that data and (for a reasonable time) from relying on that data in their own applications for approval” (2011 FC 1444, at 13).

The protection granted to innovative drugs under the Canadian data protection regulations takes two forms. “Firstly, a generic drug manufacturer cannot file a submission based on a comparison to an ‘innovative drug’ within the first six years of the eight-year period after the drug has received a Notice of Compliance (“NOC”) (subsection C.08.004.01(3)(a)). Secondly, the Minister may not issue a NOC to the generic drug manufacturer before the end of the eight-year period (subsection C.08.004.01 (3)(b))” (2011 FC 1444, at 12).

DEXILANT is a trade name for dexlansoprazole, a compound intended for use in the treatment of, among other things, gastroesophageal reflux disease (“GERD”). Dexlansoprazole is an enantiomer of lansoprazole. A racemic mixture of the two lansoprazole enantiomers, dexlansoprazole and levlansoprazole, is currently marketed by Takeda as the drug PREVACID, also used for the treatment GERD.

In August of 2009, Takeda Canada Inc. filed a New Drug Submission for DEXILANT. A NOC to market the drug was issued in July 22, 2010. However, the Office of the Patented Medicines and Liaison (“OPML”) decided, on behalf of the Minister, that DEXILANT did not meet the definition of “innovative drug” as required by the regulations. The OPML took the position that because dexlansoprazole was an enantiomer of the previously-approved medicinal ingredient lansoprazole, it was a “variation” within the meaning of the Regulations and therefore not eligible for data protection. Takeda applied to the Federal Court (FC) for judicial review of this decision.

The Federal Court dismissed the application for judicial review (2011 FC 1444). Data protection under section C.08.004.1 of the Food and Drug Regulations (the “Regulations”) is extended to “innovative drugs”. The issue before the Federal Court was whether the Minister erred in interpreting section C.08.004.1(1) of the Food and Drug Regulations which defines 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." Justice Near held that the Minister was correct in interpreting the regulation to mean that, as an enantiomer of a previously approved medicinal ingredient, dexlansoprazole was not entitled to data protection. This decision was appealed.

The Majority of the FCA upheld the decision of the Federal Court and endorsed the Minister’s interpretation of “innovative drug” (2013 FCA 13). The FCA held that the ordinary wording of the Regulations excludes all enantiomers of previously approved medicinal ingredients from qualifying as “innovative drugs”.

Writing for the Majority, Justice Dawson noted that Canada’s obligations under NAFTA and TRIPS required that the Governor in Council consider what constitutes "new chemical entities" when crafting the data protection regulations. However, it “…was open to the Governor in Council to decide, as a matter of policy, that salts, esters, enantiomers, solvates and polymorphs were not sufficiently different to be “new chemical entities” and that the Court “…ought not to thwart the decision of the Governor in Council as expressed in the definition of ‘innovative drug’” (2013 FCA 13, at 131).

Dissenting, Justice Stratas held that the listed categories in the definition of innovative drugs are examples of substances that may be “variations”. In his view, a drug should not be automatically excluded from protection solely on the basis that it contains an ingredient that is an enantiomer of a previously approved medicinal ingredient. Under Justice Stratas’ interpretation, the data protection regulations extend to medicinal ingredients that have “safety and efficacy characteristics materially different from a previously approved medicinal ingredient” (2013 FCA 13, at 102). That such an ingredient might be an enantiomer would not be determinative. Justice Stratas would have quashed the Minister’s decision and remitted the matter to the Minister for redetermination in light of his interpretation of the Regulations.

The decision in this case, and the recent decision in Canada (Health) v. Celgene Inc. (summary), indicates that Canadian courts are taking a strict approach to the definition of “innovative drug”.