Federal Court Decisions

     T-2030-96

IN THE MATTER OF Sections 18 and 18.1 of the Federal Court Act, R.S.C. 1985, Chapter, F-7

AND IN THE MATTER OF the Food and Drugs Act, R.S.C. 1985, Chapter F-27 and Division 8 of the Regulations thereunder.

AND IN THE MATTER OF the Patented Medicines (Notice of Compliance) Regulations. SOR/93-133.

BETWEEN:

     NU-PHARM INC.,

     Applicant,

     - and -

     ATTORNEY GENERAL OF CANADA

     and MINISTER OF NATIONAL HEALTH AND WELFARE,

     Respondent.

     - and -

     MERCK & CO., INC. and MERCK FROSST CANADA INC.,

     Intervenors.

     REASONS FOR ORDER

RICHARD J.:

Nature of the Proceeding

     This is an application by Nu-Pharm Inc., pursuant to s. 18.1 of the Federal Court Act, for an order:

(a)      declaring the refusal of the Minister to process the applicant's New Drug Submissions in issue except pursuant to the terms of the Patented Medicines (Notice of Compliance) Regulations (the "Patent Regulations") invalid or unlawful and setting aside the Minister's decisions;

(b)      directing the Minister to process the applicant's New Drug Submissions in issue without regard to the Patent Regulations, and more particularly, to issue Notices of Compliance for the applicant's drug products in issue.

     The application is based on the following grounds:

(a)      The respondent Minister of National Health and Welfare has refused to process the applicant's New Drug Submissions in issue on the ground that the Patent Regulations apply to the New Drug Submissions in issue.

(b)      The Patent Regulations apply only to a person who files a New Drug Submission in respect of a drug and wishes to compare that drug to, or make reference to, another drug for which a Notice of Compliance has been issued and in respect of which a patent list has been submitted under the Patent Regulations.

(c)      With respect to the New Drug Submissions in issue, the applicant does not seek to compare the submitted drugs with or make reference to drugs for which a patent list has been submitted under the Patent Regulations.

     By Order dated March 10, 1997, the Associate Senior Prothonotary gave Merck & Co., Inc. and Merck Frosst Canada Inc. leave to intervene in the main application but limited the intervenors to argument relevant to paragraphs (b) and (c) of the grounds set out in the main application.

Background

     On August 7, 1996, Nu-Pharm submitted two New Drug Submissions, one for Drug X in one strength and the second for Drug Y in two strengths.

     By letters dated August 20, 1996 and August 28, 1996, the Minister advised Nu-Pharm that their New Drug Submissions will not be processed until the requirements of the Patented Medicines (Notice of Compliance) Regulations are met.

     It is these refusals which give rise to this application for judicial review. Two affidavits were filed in this proceeding: one by Joseph Beyger, Director of Regulatory Affairs, on behalf of the applicant and the other by Sheila Ann Hills, Head, Information Dissemination Section, in the Submission and Information Policy Division, Drugs Directorate, Health Protection Branch, Department of Health, on behalf of the respondent.

Regulatory Scheme

     Pursuant to the Food and Drug Regulations, a manufacturer must satisfy the Minister that the new drug is safe and effective before a Notice of Compliance permitting it to market a new drug in Canada is issued.

     In a typical case, an innovator of a drug files a New Drug Submission containing the comprehensive information and material required by subsection C.08.002(2) of the Food and Drugs Regulations. This includes, among other things, detailed pre-clinical and clinical data to establish the safety and efficacy of the drug in question.

     Generally, a manufacturer of generic drugs files an Abbreviated New Drug Submission. The manufacturer of generic drugs relies on comparative studies provided in its New Drug Submission. These studies, rather than providing full pre-clinical and clinical data on safety and efficacy, explicitly compare the drug in question to a drug for which a Notice of Compliance was previously issued to the innovator.

     In what is known in the Department and in the industry as a Cross-Referenced New Drug Submission, a manufacturer explicitly relies on the information and materials submitted in a New Drug Submission filed by another manufacturer of that same drug for which a Notice of Compliance has been previously issued. No independent data is provided. Essentially, the cross-referenced submission consists of a letter from the submitting manufacturer indicating reliance on the material and information submitted by the other manufacturer, a letter from the other manufacturer authorizing such reliance, draft product labels, and a product monograph.

Facts

     Nu-Pharm will not itself manufacture the drugs. The drugs will be manufactured for Nu-Pharm and will be identical to the previously approved brands to which the Nu-Pharm submissions are cross-referenced except for branding and labelling changes. The drugs will be marketed by Nu-Pharm under its own label and brand.

     The New Drug Submissions made by Nu-Pharm Inc. were Cross-Referenced New Drug Submissions. They explicitly relied on the information and materials submitted in New Drug Submissions filed previously by Generic 1, which provided to Nu-Pharm its written consent for such cross-reference. Drug X and Drug Y were precisely the same products as those for which Generic 1 had filed New Drug Submissions. No independent data were provided by Nu-Pharm.

     The New Drug Submissions filed by Generic 1 were Abbreviated New Drug Submissions. They relied on studies that explicitly compared Generic 1's drugs to drugs for which Notice of Compliance had previously been issued to Innovator 1 and to Innovator 2, respectively.

     Prior to the filing of Nu-Pharm's New Drug Submissions for Drug X and Drug Y:

(a)      Innovator 1 had submitted to the Minister a patent list setting out patents that contain claims for the medicine or for the use of the medicine to which Generic 1 had explicitly compared Drug X in its Abbreviated New Drug Submission; and

(b)      Innovator 2 had submitted to the Minister a patent list setting out patents that contain claims for the medicine or for the use of the medicine, to which Generic 1 had explicitly compared Drug Y in its Abbreviated New Drug Submission.

Position of the Parties

Applicant

     The applicant states that the drug products to which the Nu-Pharm drugs are being compared are not drug products in respect of which a patent list has been filed with the Minister. The manufacturer and holder of the Notices of Compliance for the drug products to which the Nu-Pharm drugs are cross-referenced does not hold any patents in respect of the drugs, and hence, has submitted no patent list in respect of the drugs.

     The applicant submits that as Nu-Pharm did not compare its drug with or make reference to a drug that had been marketed by a person that filed a patent list in respect of the drug, the Patent Regulations have no application as the precondition for their application in subsection 5(1) thereof has not been met.

     That the Patent Regulations do not apply to Nu-Pharm in the circumstances is confirmed by an examination of the Form V declaration which requires, under Part B, details of the reference product and the pertinent patent number. In this case, the reference products, as indicated, are drug products in respect of which there is no patent list.

     The products which Nu-Pharm seeks to sell are already being sold directly by the manufacturer from whom Nu-Pharm will buy the products and in fact have been on the market for at least several years. In neither case has any action been initiated by any patentee alleging patent infringement.

     The applicant concludes that it is unreasonable and illogical to prevent Nu-Pharm from obtaining its Notice of Compliance when Nu-Pharm will be selling the identical drug product in relation to which the Patent Regulations are either inapplicable or have already been satisfied.

Respondent

     In light of the facts, Nu-Pharm's New Drug Submissions for Drug X and Drug Y compare or make reference to drugs that have been marketed in Canada pursuant to Notices of Compliance issued to a first person in respect of which a patent list has been submitted, within the meaning of sections 4 and 5 of the Patented Medicines (Notice of Compliance) Regulations. No Notices of Compliance may be issued in respect of these New Drug Submissions unless the requirements of these Regulations are met.

Intervenors

     An administrative practice cannot be inconsistent with the statute or regulations. Nu-Pharm's submissions compare or make reference to drugs that have been marketed in Canada pursuant to Notice of Compliances to a first person in respect of which a patent list has been submitted.

Analysis

     As I observed in AB Hassle and Astra Pharma Inc. v. The Minister of National Health & Welfare and Novopharm Ltd.¹ the Patent and Medicines (Notice of Compliance) Regulations must be read with the Food and Drug Regulations. The Patented Medicines (Notice of Compliance) Regulations have been grafted onto the Food and Drug Regulations, whose sole purpose is the protection of public health and safety. The Patented Medicines Regulations were drafted in order to protect the research and development initiatives of innovator pharmaceutical companies. A large measure of the difficulties which occur in interpreting both regulatory schemes are due to their different objectives.

     The Patented Medicines (Notice of Compliance) Regulations require that, where a second person (usually a generic manufacturer) files a submission for a Notice of Compliance in respect of a drug and wishes to compare that drug with or make a reference to a drug that has been marketed in Canada pursuant to a Notice of Compliance issued to a first person (usually the brand name manufacturer) who has previously filed a patent list, the second person shall, in the submission, with respect to each patent on the list, state that the person accepts that the Notice of Compliance will not issue until the patent expires or make one or more specific allegations pertaining to the patent. The Patented Medicines (Notice of Compliance) Regulations further provide that when an allegation pertaining to a patent is made in a submission notice of that allegation must be served on the first person and proof of such service must be provided to the Minister. The Patented Medicines (Notice of Compliance) Regulations do not apply when a second person chooses not to request this comparison to be made.

     While the Food and Drug Regulations specifically provide for and describe a New Drug Submission and an Abbreviated New Drug Submission, nowhere is a Cross-referenced New Drug Submission referred to. A Cross-referenced New Drug Submission is an Abbreviated New Drug Submission and must comply with all its requirements; the material in support need not be physically reproduced but only referenced. As stated by Madam Justice Tremblay-Lamer in the Merck Frosst case² at page 65:

...[A] cross-referenced application relies on the very same information (regarding composition, analysis, testing, etc.) submitted by another applicant in support of its earlier successful NDS for the same medicine, with the consent of that other applicant.

     A person who seeks a Notice of Compliance for a drug must file an allegation and a detailed statement of its factual and legal basis, and must serve a Notice of Allegation, if the person wishes to compare that drug with, or make a reference to, a drug in respect of which a patent list has been submitted. Failing compliance with those requirements in those circumstances, the Minister may not issue the Notice of Compliance.

     Nu-Pharm has submitted that its New Drug Submissions do not compare its drugs with, or make reference to, a drug on a patent list. Nu-Pharm has argued that its New Drug Submissions refer only to the drugs marketed by Generic 1, which has not filed a patent list.

     Nu-Pharm's New Drug Submissions provide no new data. They rely explicitly and solely on the fact that Nu-Pharm's products are precisely the same as Generic 1's products, and on the information accordingly supplied by Generic 1. That information consists of tests and data whose only purpose is to explicitly compare the drugs Generic 1 manufactures to the drugs manufactured by Innovators 1 and 2. The comparison is intended to show that the drugs manufactured by Generic 1 are essentially the same as the drugs manufactured by Innovators 1 and 2, for which Notices of Compliance were previously issued.

     The Notices of Compliance issued to Generic 1 were issued on the basis of its comparisons to the drugs appearing on the patent lists submitted by Innovators 1 and 2. There is a comparison from Nu-Pharm's Cross-Referenced Submissions through Generic 1's Abbreviated Submissions to the drugs appearing on the patent lists submitted by Innovators 1 and 2.

     Accordingly, Nu-Pharm's submissions compare its drugs with, or make reference to a drug that has been marketed in Canada pursuant to a Notice of Compliance issued to a first person in respect of which a patent list has been submitted.

     The medicine in those drugs is identical and, while the drugs themselves may not be identical by reason of differences in their excipients (carriers and binders), they are equivalent.

     Counsel for the applicant relied on the decision of Madam Justice Tremblay-Lamer in the lisinopril case.³ That case stands for the proposition that under s. 5 of the Patented Medicines (Notice of Compliance) Regulations the generic manufacturers are allowed to pick and choose the approved drug with which they want to establish a comparison or make a reference and that ss. 5(1) cannot be construed as requiring that a notice of allegation be served on all first persons who have filed a patent list in respect to the drug in issue. That does not arise in this case. Generic 1 has not filed a patent list and is not a first person within the meaning of ss. 4(1) of the Patented Medicines (Notice of Compliance) Regulations. However, there is a comparison from Nu-Pharm's Cross-Referenced Submissions through Generic 1's Abbreviated Submissions to the drugs appearing on the patent lists submitted by Innovators 1 and 2.

     In these circumstances, the Minister's decision that Nu-Pharm's New Drug Submissions will not be processed until the requirements of the Patented Medicines (Notice of Compliance) Regulations are met, is not invalid or unlawful. The Minister has no duty or right to issue Notices of Compliance in respect of these New Drug Submissions unless the requirements of s. 5 of the Patented Medicines (Notice of Compliance) Regulations are met.

     Accordingly, the application for judicial review is dismissed.

     __________________________

     Judge

Ottawa, Ontario

May 15, 1997

__________________

¹      (1995) 62 C.P.R. (3d) 3 at p. 11 (appeal discontinued on May 8, 1996).

²      Merck Frosst Canada Inc. v. Canada (1996), 69 C.P.R. (3d) 62 (F.C.T..D.).

³      Merck Frosst Canada Inc. v. Minister of Health and Welfare et al. (1996), 71 C.P.R. (3d) 156.