Canadian Generic Pharmaceutical Association v. Canada (Health)

Canadian Generic Pharmaceutical Association v. Canada (Health)
Court (s) Database
Federal Court Decisions
Date
2009-07-17
Neutral citation
2009 FC 725
File numbers
T-1976-06, T-2047-06
Notes
Digest
Decision Content
Federal Court
Cour fédérale
Date: 20090717
Docket: T-1976-06
T-2047-06
Citation: 2009 FC 725
Halifax, Nova Scotia, July 17, 2009
PRESENT: The Honourable Mr. Justice Mandamin
Docket: T-1976-06
BETWEEN:
CANADIAN GENERIC
PHARMACEUTICAL ASSOCIATION
Applicant
and
MINISTER OF HEALTH and THE
ATTORNEY GENERAL OF CANADA
Respondents
and
CANADA’S RESEARCH-BASED
PHARMACEUTICAL COMPANIES
Intervener
Docket: T-2047-06
AND BETWEEN:
APOTEX INC.
Applicant
and
MINISTER OF HEALTH and
THE ATTORNEY GENERAL OF CANADA
Respondents
and
ELI LILLY CANADA INC.
Intervener
REASONS FOR JUDGMENT AND JUDGMENT
I. Introduction
[1] The Applicants seek judicial review of the Governor in Council’s 2006 enactment of section C.08.004.1 (the Data Protection Regulation) of the Food and Drug Regulations, C.R.C., c. 870 (the FDA Regulations). The Applicants seek a declaration that the Data Protection Regulation is ultra vires and without legal force and effect and other related remedies.
[2] The Applicant in T-1976-06 is the Canadian Generic Pharmaceutical Association (the CGPA), an association of generic drug manufacturers and their suppliers. The Respondent is Canada, as represented by the Attorney General of Canada and the Minister of Health. The Intervener is Canada’s Research-Based Pharmaceutical Companies (Rx&D), an association of drug manufacturers and related companies.
[3] The Applicant in T-2047-06 is Apotex Inc. (Apotex), the largest generic drug manufacturer in Canada. The Respondent is Canada, as represented by the Attorney General of Canada and the Minister of Health. The Intervener is Eli Lilly Canada Inc. (Eli Lilly), a major Canadian drug manufacturer which participates in global pharmaceutical research and development by the Eli Lilly world-wide group of corporations.
[4] The Parties and Interveners in both applications address the same issues, the vires of subsection 30(3) of the Food and Drugs Act, R.S.C. 1985, c. F-27 (the Act), and of the Data Protection Regulation. The Parties and Interveners made oral submissions at a combined hearing, parcelling out oral argument on issues amongst their respective sides. I will treat the two applications as having been joined and these reasons will apply to both proceedings, T-1976-06 and T-2047-06.
[5] Subsection 30(3) of the Act gives the Governor in Council the authority to enact regulations for the purpose of implementing specified data protection provisions of the North American Free Trade Agreement (NAFTA) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The Governor in Council enacted the Data Protection Regulation on October 5, 2006.
[6] The Data Protection Regulation introduces a period of market exclusivity by imposing an eight year moratorium on approval for the marketing of a generic copy of a previously approved new drug.
[7] Prior to the enactment of the Data Protection Regulation the only restriction on a generic drug manufacturer’s ability to gain approval to market a generic drug was any unexpired patent protection. After the enactment of the Data Protection Regulation the drug company pursuing approval for a generic copy must wait until expiry of the market exclusivity period of the new drug before its generic copy may receive approval, even if there is no existing patent protection.
[8] The issue in these two applications is whether Parliament has the constitutional power to enact subsection 30(3) of the Act and the Data Protection Regulation and whether the Governor in Council may enact the Data Protection Regulation in the present form.
[9] I have decided that subsection 30(3) of the Act and the Data Protection Regulation are intra vires as a valid exercise of the federal constitutional power under the regulation of trade and commerce, subsection 91(2) of the Constitution Act, 1867. I also conclude that Data Protection Regulation is rationally connected with subsection 30(3) of the Act and comes within the regulatory authority Parliament has given the Governor in Council.
[10] On the procedural question, I have found that the CGPA has standing on the basis of public interest.
II. Background
[11] It is useful to begin by describing the process by which approval is obtained to market drugs in Canada.
[12] Generally, a drug company obtains approval of a new drug by submitting to Health Canada a new drug submission (NDS). This submission must include extensive data establishing the safety and efficacy of the new drug. If proven to the satisfaction of the Minister of Health and his officials, the innovator drug company obtains a Notice of Compliance (NOC) approving the new medical drug. A generic manufacturer, which seeks to market a generic version of a drug previously approved by the Minister of Health, establishes that the generic drug is safe by submitting an abbreviated new drug submission (ANDS). The generic manufacturer must submit information that demonstrates that the generic drug is pharmacologically equivalent to the approved drug and has the same bioavailability. When the generic drug’s safety and efficacy is proven by this comparison, the generic drug manufacturer also obtains an NOC for its generic product.
New Drug Submissions
[13] The FDA Regulations prohibit the marketing of all drugs unless the drug is proven to be both safe to consume and effective in treatment. Before a drug manufacturer can market a new drug in Canada, the drug manufacturer must be granted an NOC by the Minister of Health. The NOC indicates that the Minister is satisfied the new drug is both safe and effective. The NOC is granted pursuant to Part C, Division 8 of the FDA Regulations which states:
C.08.002. (1) No person shall sell or advertise a new drug unless
(a) the manufacturer of the new drug has filed with the Minister a new drug submission or an abbreviated new drug submission relating to the new drug that is satisfactory to the Minister;
(b) the Minister has issued, pursuant to section C.08.004, a notice of compliance to the manufacturer of the new drug in respect of the new drug submission or abbreviated new drug submission.
[14] The NDS contains the information required to prove the safety and efficacy of the drug. The NDS data typically identifies the drug, its benefits, adverse reactions, manufacturing processes, clinical trials on healthy volunteers, and medical clinical trials on patients and the safety and efficacy of the drug product. Justice Binnie described the process for new drug submissions in Bristol-Myers Squibb Co. v. Canada (Minister of Health), 2005 SCC 26 (Bristol-Meyers):
13 The Food and Drug Act, R.S.C. 1985, c. F-27 (the "FDA"), sets up a regulatory structure to ensure that before drugs are allowed on the Canadian market they meet rigorous health and safety requirements. Regulatory approval culminates in the issuance of a NOC by the Minister on the advice of his officials in the Therapeutic Products Program ("TPP") of the federal Department of Health.
14 The Food and Drug Regulations, C.R.C. 1978, c. 870 ("FDA Regulations"), and departmental policies require drug manufacturers to submit different types of new drug submission for different purposes. The two principal forms of submission are the New Drug Submission ("NDS"), filed by an innovative drug manufacturer for a new drug product, and the Abbreviated New Drug Submission ("ANDS"), filed by a generic manufacturer that claims its product is the "pharmaceutical equivalent" of a previously approved "Canadian reference product" (s. C.08.002.1(1)(a)).
15 A pharmaceutical company proposing to market a new drug in Canada must include in its NDS a description of the benefits claimed, the adverse reactions experienced, the chemical composition of the ingredients and the methods of manufacture and purification in sufficient detail to enable the Minister to assess the safety and effectiveness of the new drug as therein specified. The Minister and his departmental officials then proceed to examine the material, possibly require further studies, pose questions, and generally conduct a wide-ranging inquiry, all of which may consume several years.
16 A "new drug" is defined in s. C.08.001 of the FDA Regulations as a drug which contains a substance which "has not been sold as a drug in Canada for sufficient time and in sufficient quantity to establish in Canada the safety and effectiveness of that substance for use as a drug".
17 Eventually the Minister, if so satisfied, "shall" issue a NOC. (s. C.08.004(1)). The Minister must also be satisfied with the proposed arrangements of manufacture, quality control and so forth (s. C.08.002). The new drug may then go to market.
[15] The pre-clinical sections of the NDS consist of all the information about the numerous experiments that the innovator has conducted in the laboratory. These experiments are geared to test the action and toxicity of the drug. The clinical portions of the NDS consist of information garnered in clinical trials with volunteer subjects and/or patients to test the safety and efficacy of the new drug. Further information or studies may be required by the Minister of Health before being satisfied. The content, size, and cost of each NDS will vary. However, in general, the information required in an NDS for a new active drug is a significant undertaking by the innovator drug company and can contain as many as one to three hundred volumes of data.
[16] The Minister of Health, upon being satisfied of the new drug’s safety and efficacy, issues an NOC. The drug is then listed as a Canada Reference Product and is issued a unique Drug Information Number (DIN).
Abbreviated New Drug Submissions
[17] Drug manufacturers that seek approval to market a generic copy of an approved drug proceed by way of an ANDS. The submission includes information on the composition, manufacture and studies that prove the generic drug contains the identical amount of the same medicinal ingredient in comparable dosages as the Canadian Reference Product, is pharmacologically equivalent, and has the same bioavailability as the Canadian Reference Product. Justice Hughes summarized the regulatory process to obtain approval to sell a generic copy of an approved drug, Sanofi-Aventis Canada Inc. v. Canada (Minister of Health), 2008 FC 1062:
6 Canada has provided that generic copies of approved drugs may be offered for sale in Canada, whether or not the originator consents. This happens provided that the Minister is satisfied that the copies are equally safe and effective as the original as per the Food and Drug Act and Regulations. The generic does not, however, need to provide the extensive data provided by the originator. It can simply tell the Minister that it relies upon or "references" the originator data by filing an Abbreviated New Drug Submission (ANDS). The generic must submit data on its product, largely directed to satisfying the Minister that the product is pharmalogically equivalent to the original and that the bioavailability of the active ingredient(s) is the same. Thus a generic is required to make some investment of its own in providing data.
[18] The ANDS may also contain stability studies and process validation if the generic manufacturer is using a different manufacturing process or different inactive ingredients in comparison to the process employed and ingredients used by the innovator. A typical ANDS contains fewer volumes of data, typically ranging from a dozen to two dozen volumes.
[19] Once the Minister of Health is satisfied, an NOC is issued for the generic drug; the drug then also becomes a Canada Reference Product and is assigned a DIN.
[20] In either instance, in both the NDS and the ANDS, if the Minister is satisfied that the proposed new drug or generic drug is safe and effective, and otherwise complies with the requirements of the FDA Regulations, the Minister must promptly issue an NOC to the drug manufacturer, subject to patent considerations that are not relevant to these applications.
III. International Agreements and Legislation
Legislative History
[21] Section C.08.004.1 of the FDA Regulations is described in the Regulatory Impact Assessment Statement (RIAS) as a data protection provision. The Governor in Council enacted this regulatory amendment pursuant to subsection 30(3) of the Act. Subsection 30(3) itself was a statutory amendment enacted pursuant to the World Trade Organization Agreement Implementation Act, S.C. 1994, c. 47, s. 117. The previous version of subsection 30(3) had been enacted pursuant to the North American Free Trade Agreement Implementation Act, S.C. 1993, c. 44, s. 158.
[22] The wording of the present version of subsection 30(3) authorizes the Governor in Council to make such regulations as it deems necessary for the purpose of implementing, in relation to drugs, Article 1711 of the North American Free Trade Agreement (NAFTA) and paragraph 3 of Article 39 of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
NAFTA
[23] NAFTA is a trilateral North American trade agreement entered into by the governments of Canada, United States, and Mexico. NAFTA was signed on December 17, 1992. Article 1711 of NAFTA provides:
Article 1711: Trade Secrets
1. Each Party shall provide the legal means for any person to prevent trade secrets from being disclosed to, acquired by, or used by others without the consent of the person lawfully in control of the information in a manner contrary to honest commercial practices, in so far as:
(a) the information is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons that normally deal with the kind of information in question;
(b) the information has actual or potential commercial value because it is secret; and
(c) the person lawfully in control of the information has taken reasonable steps under the circumstances to keep it secret.
2. A Party may require that to qualify for protection a trade secret must be evidenced in documents, electronic or magnetic means, optical discs, microfilms, films or other similar instruments.
3. No Party may limit the duration of protection for trade secrets, so long as the conditions in paragraph 1 exist.
4. No Party may discourage or impede the voluntary licensing of trade secrets by imposing excessive or discriminatory conditions on such licenses or conditions that dilute the value of the trade secrets.
5. If a Party requires, as a condition for approving the marketing of pharmaceutical or agricultural chemical products that utilize new chemical entities, the submission of undisclosed test or other data necessary to determine whether the use of such products is safe and effective, the Party shall protect against disclosure of the data of persons making such submissions, where the origination of such data involves considerable effort, except where the disclosure is necessary to protect the public or unless steps are taken to ensure that the data is protected against unfair commercial use.
6. Each Party shall provide that for data subject to paragraph 5 that are submitted to the Party after the date of entry into force of this Agreement, no person other than the person that submitted them may, without the latter's permission, rely on such data in support of an application for product approval during a reasonable period of time after their submission. For this purpose, a reasonable period shall normally mean not less than five years from the date on which the Party granted approval to the person that produced the data for approval to market its product, taking account of the nature of the data and the person's efforts and expenditures in producing them. Subject to this provision, there shall be no limitation on any Party to implement abbreviated approval procedures for such products on the basis of bioequivalence and bioavailability studies.
7. Where a Party relies on a marketing approval granted by another Party, the reasonable period of exclusive use of the data submitted in connection with obtaining the approval relied on shall begin with the date of the first marketing approval relied on.
North American Free Trade Agreement Implementation Act
[24] Parliament enacted the North American Free Trade Agreement Implementation Act bringing an earlier version of subsection 30(3) of the Act into effect on January 1, 1994. Prior to this enactment, section 30 of the Act only contained two subsections. This first enactment of subsection 30(3) was worded as follows:
Regulations re the North American Free Trade Agreement
(3) Without limiting or restricting the authority conferred by any other provisions of this Act or any Part thereof for carrying into effect the purposes and provisions of this Act or any Part thereof, the Governor in Council may, for the purpose of implementing Article 1711 of the North American Free Trade Agreement, make regulations respecting the extent to which, if any, a person may, in seeking to establish the safety or effectiveness of a new drug for the purposes of any regulations made under subsection (1) or (2), rely on test or other data submitted by any other person to the Minister in accordance with such regulations.
The Data Protection Regulation as of June 9, 1995
[25] Section C.08.004.1 was enacted pursuant to subsection 30(3) of the Act and published in the Canada Gazette on June 9, 1995 under the Regulations Amending the Food and Drug Regulations (Data Protection), SOR/95-411. It read as follows:
C.08.004.1 (1) Where a manufacturer files a new drug submission, an abbreviated new drug submission, a supplement to a new drug submission or a supplement to an abbreviated new drug submission for the purpose of establishing the safety and effectiveness of the new drug for which the submission or supplement is filed, and the Minister examines any information or material filed with the Minister, in a new drug submission, by the innovator of a drug that contains a chemical or biological substance not previously approved for sale in Canada as a drug, and the Minister, in support of the manufacturer’s submission or supplement, relies on data contained in the information or material filed by the innovator, the Minister shall not issue a notice of compliance in respect of that submission or supplement earlier than five years after the date of issuance to the innovator of the notice of compliance or approval to market that drug, as the case may be, issued on the basis of the information or material filed by the innovator for that drug.
(2) Subsection (1) does not apply where the manufacturer of a new drug for which a notice of compliance was issued pursuant to section C.08.004 gives written permission to another manufacturer to rely on the test or other data filed in respect of that new drug.
(3) Subsection (1) does not apply where the data relied upon by the Minister was contained in information or material filed by the innovator before January 1, 1994.
TRIPS
[26] TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994. It is an international agreement administered by the World Trade Organization (WTO) and sets out minimum standards for many forms of intellectual property protection.
[27] TRIPS was signed on April 15, 1994. Article 39 of TRIPS provides:
Article 39
1. In the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.
2. Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices (10) so long as such information:
(a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
(b) has commercial value because it is secret; and
(c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
3. Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.
World Trade Organization Agreement Implementation Act
[28] Parliament amended subsection 30(3) of the Act with the passage of the World Trade Organization Agreement Implementation Act. This Agreement came into force on January 1, 1996. The amended section, now the current wording of subsection 30(3) of the Act reads:
Regulations re the North American Free Trade Agreement and WTO Agreement
(3) Without limiting or restricting the authority conferred by any other provisions of this Act or any Part thereof for carrying into effect the purposes and provisions of this Act or any Part thereof, Free Trade Agreement or paragraph 3 of Article 39 of the Agreement on Trade-related Aspects of Intellectual Property Rights the Governor in Council may make such regulations as the Governor in Council deems necessary for the purpose of implementing, in relation to drugs, Article 1711 of the North American set out in Annex 1C to the WTO Agreement.
The Data Protection Regulation as of October 5, 2006
[29] The RIAS states that after consultation with stakeholders the FDA Regulations were amended to reflect Canada’s international treaty obligations. The Governor in Council amended section C.08.004.1 and this amendment came into force on October 5, 2006 with publication in the Canada Gazette on October 18, 2006. The earlier version from 1995 of C.08.004.1 was replaced by the following amended wording:
C.08.004.1 (1) The following definitions apply in this section.
"innovative drug" means 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. (drogue innovante)
"pediatric populations" means the following groups: premature babies born before the 37th week of gestation; full-term babies from 0 to 27 days of age; and all children from 28 days to 2 years of age, 2 years plus 1 day to 11 years of age and 11 years plus 1 day to 18 years of age. (population pédiatrique)
(2) This section applies to the implementation of Article 1711 of the North American Free Trade Agreement, as defined in the definition "Agreement" in subsection 2(1) of the North American Free Trade Agreement Implementation Act, and of paragraph 3 of Article 39 of the Agreement on Trade-related Aspects of Intellectual Property Rights set out in Annex 1C to the World Trade Organization Agreement, as defined in the definition "Agreement" in subsection 2(1) of the World Trade Organization Agreement Implementation Act.
(3) If a manufacturer seeks a notice of compliance for a new drug on the basis of a direct or indirect comparison between the new drug and an innovative drug,
(a) the manufacturer may not file a new drug submission, a supplement to a new drug submission, an abbreviated new drug submission or a supplement to an abbreviated new drug submission in respect of the new drug before the end of a period of six years after the day on which the first notice of compliance was issued to the innovator in respect of the innovative drug; and
(b) the Minister shall not approve that submission or supplement and shall not issue a notice of compliance in respect of the new drug before the end of a period of eight years after the day on which the first notice of compliance was issued to the innovator in respect of the innovative drug.
(4) The period specified in paragraph (3)(b) is lengthened to eight years and six months if
(a) the innovator provides the Minister with the description and results of clinical trials relating to the use of the innovative drug in relevant pediatric populations in its first new drug submission for the innovative drug or in any supplement to that submission that is filed within five years after the issuance of the first notice of compliance for that innovative drug; and
(b) before the end of a period of six years after the day on which the first notice of compliance was issued to the innovator in respect of the innovative drug, the Minister determines that the clinical trials were designed and conducted for the purpose of increasing knowledge of the use of the innovative drug in those pediatric populations and this knowledge would thereby provide a health benefit to members of those populations.
(5) Subsection (3) does not apply if the innovative drug is not being marketed in Canada.
(6) Paragraph (3)(a) does not apply to a subsequent manufacturer if the innovator consents to the filing of a new drug submission, a supplement to a new drug submission, an abbreviated new drug submission or a supplement to an abbreviated new drug submission by the subsequent manufacturer before the end of the period of six years specified in that paragraph.
(7) Paragraph (3)(a) does not apply to a subsequent manufacturer if the manufacturer files an application for authorization to sell its new drug under section C.07.003.
(8) Paragraph (3)(b) does not apply to a subsequent manufacturer if the innovator consents to the issuance of a notice of compliance to the subsequent manufacturer before the end of the period of eight years specified in that paragraph or of eight years and six months specified in subsection (4).
(9) The Minister shall maintain a register of innovative drugs that includes information relating to the matters specified in subsections (3) and (4).
SOR/95-411, s. 6; SOR/2006-241, s. 1, effective October 5, 2006 (Can. Gaz. Pt. II, Vol. 140, No. 21, p. 1493).
IV. Related Jurisprudence
[30] Also relevant to the legislative history of section C.08.004.1 of the FDA Regulations is jurisprudence concerning the interpretation of the original wording of the provision.
[31] In Bayer v. Canada (Attorney General), [1998] F.C.J. No. 1560 (Bayer FC), Bayer Inc. brought a motion for a declaration that the first version of C.08.004.1 provided for a five year protection period for innovators of new drugs from competition from manufacturers of similar generic drugs.
[32] In Bayer FC Justice Evans noted the RIAS stated that section C.08.004.1(1) was introduced to ensure compliance with Canada’s obligations under NAFTA, in particular paragraphs 5 and 6 of Article 1711. After deciding that the drug in question was a new drug within the meaning of the regulation in that this was the first time approval was sought to treat humans, Justice Evans turned to the interpretation of the provision. First, Justice Evans, at para. 37 decided that “given the overall purpose of the FDA Regulations, the adverb ‘indirectly’ should not be read into section C.08.004.1(1) so as to broaden the scope of the verb ‘relies’.” Second, he decided that the text of section C.08.004.1 should be interpreted to apply when the Minister, in considering an ANDS, actually examines the data submitted in the corresponding NDS for the comparative Canadian Reference Product. Finally, he concluded that the regulation as worded and interpreted does not confer the right to a five year exclusive marketing period for Bayer since the Minister of Health does not examine the NDS information submitted by an innovator in considering a subsequent ANDS by a generic manufacturer proposing to make a generic copy.
[33] Bayer appealed the decision to the Federal Court of Appeal. In Bayer v. Canada (Attorney General), [1999] F.C.J. No. 826 (Bayer FCA), Justice Rothstein framed the issue as:
4 The issue is whether, when a competitor of an innovator seeks approval of the safety and effectiveness of its product by comparing it with the innovator's product, there is examination and reliance by the Minister on the confidential detailed safety reports and evidence of clinical effectiveness originally filed by the innovator with the government. If so, the innovator will be entitled to at least five years of protection from competition.
[34] Justice Rothstein confirmed Justice Evans’ assessment that the Court ought not to read the words “‘indirectly’ or some other modifier” into the regulation. He found that regulation provided for a sequence: first, filing of an ANDS; second, examination of the information filed in an earlier NDS; and third, reliance on that information by the Minister in issuing an NOC for the ANDS generic drug. Importantly, the Minister and departmental officials did not examine the original NDS data submitted nor was there an implied examination required by the wording of the then existing regulation.
[35] Justice Rothstein reviewed the NAFTA provision 1711 and concluded:
18. Subsection C.08.004.1(1) and sections 5 and 6 of Article 1711 of NAFTA are responsive to the requirement on innovators of pharmaceutical products of having to disclose confidential proprietary information to the government. They provide for the use of that confidential or trade secret information by the government on behalf of the generic manufacturer and when that occurs, the minimum five year protection from competition for the innovator applies. Where the government does not use that confidential or trade secret information on behalf of the generic manufacturer, the provision is not applicable.
[36] The Governor in Council amended section C.08.004.1 after the Federal Court of Appeal decision in Bayer FC. The accompanying RIAS states that the amendments to the FDA Regulation are intended to clarify and effectively implement Canada’s obligations under NAFTA and TRIPS “with respect to the provision of undisclosed test or other data necessary to determine the safety and effectiveness of a pharmaceutical or agricultural product which utilizes a new chemical entity.” The RIAS specifically referenced the Bayer FC decision noting that the previous wording of the regulation did not provide sufficient data protection. The RIAS states that the federal government believes the amendments would achieve a greater balance between the need for innovative drugs and the need for competition in the marketplace.
V. Issues
[37] The issues raised by the CGPA are:
Is the Data Protection Regulation ultra vires the regulation-making power conferred on the Governor in Council by subsection 30(3) of the Act?
Is the Data Protection Regulation and subsection 30(3) of the Act ultra vires the constitutional authority of the federal government?
[38] Canada responded to these two issues and raised a further issue of CGPA’s standing:
Does the CGPA have standing to seek judicial review of the Data Protection Regulation?
[39] The issues raised by Apotex are:
Is the Data Protection Regulation ultra vires the authority of the Governor in Council for not being rationally connected to the grant of authority of the Enabling Provision, which pertains to trade secrets and confidential information?
Is the Data Protection Regulation ultra vires federal legislative competence pursuant to s.91 of the Constitution Act, 1867?
Does the Data Protection Regulation involve an impermissible sub-delegation of treaty implementation responsibilities?
Is the Data Protection Regulation void for uncertainty or vagueness for the grant of discretion to the Minister as to the scope of the FDA Regulations?
[40] The Applicants agreed that there were three issues raised between the two applications since the challenge on uncertainty was not being argued. The first issue involves a constitutional challenge to subsection 30(3) of the Act and the Data Protection Regulation. The remaining two issues involve the validity of the Data Protection Regulation in relation to its governing statutory provision, subsection 30(3) of the Act: first, that the challenged regulation is not rationally connected to the enabling provision since the latter relates to trade secrets and confidential information as set out in Article 1711 of NAFTA and Article 39 of TRIPS; second, that subsection 30(3) is an impermissible sub-delegation by Parliament to the Governor in Council.
[41] In response to the challenges, Canada submits that subsection 30(3) of the Act and the Data Protection Regulation are within the Parliament’s constitutional competence, within the scope of the criminal law power pursuant to subsection 91(27) of the Constitution Act, 1867.
[42] In my view, the substantive issues to be addressed in these applications are:
1. Is the Data Protection Regulation intra vires the federal legislative powers pursuant to subsection 91(27) of the Constitution Act, 1867?
2. Is subsection 30(3) of the Act and the Data Protection Regulation intra vires the federal legislature powers as being enacted pursuant to the international trade agreements NAFTA and TRIPS under:
a) the general regulation of trade and commerce branch of subsection 91(2); or
b) the national concern branch of the peace, order, and good government power (POGG)?
3. Is the Data Protection Regulation invalid:
a) for not being rationally connected to the grant of authority in subsection 30(3) of the Act; or
b) because the enabling provision, subsection 30(3), is an impermissible sub-delegation by Parliament of international treaty implementation responsibilities?
VI. Standard of Review
[43] The two applications by CGPA and Apotex are for judicial review of the vires of regulations enacted by the Governor in Council pursuant to an act of Parliament. As such they involve a question of law for which the standard of review is correctness.
Dunsmuir v. New Brunswick, 2008 SCC 9, at para. 58
Nanaimo (City) v. Rascal Trucking Ltd., [2000] 1 S.C.R. 342
Westcoast Energy Inc. v. Canada (National Energy Board), [1998] 1 S.C.R. 322
VII. Analysis
Evidence
[44] The evidence submitted by the parties in T-1976-06 consists of the following:
1) The CGPA submitted Affidavits from the following individuals: James Keon, Paula Rembach, and Michal Niemkiewicz.
James Keon is the president of the CGPA. In his Affidavit he discusses the importance of low cost generic drugs to drug expenditures in Canada, the health and safety approval process for generic drugs; the fact that the Minister does not rely on the initial drug manufacturer’s NDS data for an ANDS. He then surveys the power under the Food and Drug Act to make regulations necessary for the purpose of implementing Article 1711 of NAFTA and Paragraph 3 of Article 39 of TRIPS. Attached to his Affidavit is a list of members of the CGPA, which includes: Cangene Corporation, Cobalt Pharmaceuticals Inc., Novopharm Limited, Nu-Pharm, Orbus Pharma Inc., Pharmascience Inc., Pro Doc Ltee, Ranbaxy Pharmaceuticals Canada Inc., ratiopharm inc., Sandoz Canada Inc., Taro Pharmaceuticals, ACIC, Debro Pharmaceuticals & Chemicals, PDi-Pharmaceuticals, Inc., Algorithme Pharma Inc., SFBC Anapharm, Viovail Contract Research, and MDS Pharma Services. Attached to his supplemental Affidavit is a table titled “Register of Innovative Drugs” dated 2006-11-02.
More specifically, Mr. Keon notes:
1. When a generic version of a drug enters the market, the price of the generic version is typically 30-50% below that of the originator drug. Thus the ability of generic manufacturers to get marketing approval for generic drugs plays a fundamental role in controlling drug expenditures in Canada.
2. The generic manufacturer in submitting an ANDS does not rely on the clinical and pre-clinical studies of the innovator to support the safety and efficacy of its generic drug. Rather, both the generic manufacturer and the Minister rely on:
a. the fact that an NOC has previously been issued in respect of the Canadian reference product;
b. the fact that the Canadian reference product is being marketed in Canada; and
c. the information and material contained in the ANDS.
3. CGPA estimates the total lost saving to the health care system as a result of the monopolies imposed by the FDA Regulations at $500 million dollars, as more fully set out the affidavit of Paula Rembach.
Paula Rembach is a research analyst for the CGPA. Her Affidavit contains a summary of the exhibit attached to her Affidavit; “Data Protection Analysis – Estimated Cost of 8.5 Year Ban on Generic NOC’s”.
The Affidavit of Michal Niemkiewicz contained the following documents:
· Copy of Article 1711 of the North American Free Trade Agreement;
· Copy of Article 39 of the Agreement on Trade-related Aspects of Intellectual Property Rights;
· Copy of Portions of the North American Free Trade Agreement Implementation Act;
· Copy of Portions of the World Trade Organization Agreement Implementation Act;
· Copy of the Order of the Governor in Council, SI/94-1, published on December 1, 1994 in Canada Gazette Part II, Vol. 128, No.1;
· Copy of the Order of the Governor in Council, SI/96-1, published on October 1, 1996 in Canada Gazette Part II, Vol. 130, No.1;
· Copy of Chapter 20 of the North American Free Trade Agreement;
· Copy of Part V of Agreement on Trade-related Aspects of Intellectual Property Rights
· Copy of Annex 2 of the Agreement Establishing the World Trade Organization entitled Understanding on Rules and Procedures Governing Settlement of Disputes
· Copy of Food and Drug Regulations, Amendment, SOR/95-411, published in the Canada Gazette Part II, Vol. 129, No. 18, pages 2489-2496 and Regulatory Impact Analysis Statement;
· Copy of Regulations Amending the Food and Drug Regulation (Data Protection), SOR/2006-241 published on October 18, 2006 with Regulatory Impact Analysis Statement in Canada Gazette Part II, Vol. 140, No. 21;
· Copy of Section C, Division 8 of the Food and Drug Regulations;
· Copy of Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, published on March 24, 1993 with Regulatory Impact Analysis Statement in Canada Gazette Part II, Vol. 132, No.4;
· Copy of Regulations Amending the Patented Medicines (Notice of Compliance) Regulations, SOR/98-166, published April 1, 1998 with Regulatory Impact Analysis Statement in Canada Gazette Part II, Vol. 132, No. 7;
· Copy of Regulations Amending Patented Medicines (Notice of Compliance) Regulations, SOR/99-379, published October 13, 1999 with Regulatory Impact Analysis Statement in Canada Gazette Part II, Vol. 133, No. 21;
· Copy of Regulations Amending Patented Medicines (Notice of Compliance) Regulations, SOR/2006-242, published October 18, 2006 with Regulatory Impact Analysis Statement in Canada Gazette Part II, Vol. 140, No. 21; and
· Copy of report titled “Drug Expenditure in Canada 1985 – 2006” from the Canadian Institute for Health Information”
The CGPA also submitted the transcripts of the cross-examination of Anne Bowes and Declan Hamill.
2) Canada submitted the Affidavit of Elizabeth Bowes. She is the Associate Director at Health Canada in the Office of Patented Medicines and Liaison, Therapeutic Products Directorate. She is responsible for the administration of section C.08.004.1 of the FDA Regulations and the Patented Medicines (Notice of Compliance) Regulations, [S.O.R./93-133].
Ms. Bowes’ Affidavit contains a