Federal Court of Appeal upholds the Data Protection Regulations and its guaranteed eight-year period of market exclusivity for "innovative drugs"

January 21, 2011

The Federal Court of Appeal has upheld the validity of section 30(3) of the Food and Drugs Act and section C.08.004.1 of the Food and Drug Regulations (known as the Data Protection Regulations) in its decision in Apotex Inc. v. The Minister of Health, 2010 FCA 334

The Data Protection Regulations (DPR) were designed to clarify and implement Canada’s obligations under the data protection provisions of the North American Free Trade Agreement (NAFTA) and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). The DPR introduced a guaranteed period of market exclusivity of at least eight years for manufacturers of “innovative drug[s]”.  More particularly, the DPR prohibits a generic manufacturer seeking a notice of compliance (NOC) for a new drug “on the basis of a direct or indirect comparison  between the new drug and an innovative drug” from filing a New Drug Submission (NDS) “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”.  In addition, the DPR prohibits the Minister of Health from issuing a NOC to a generic drug manufacturer “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”. Thus, generic drug manufacturers cannot obtain approval for their generic drug until the period of market exclusivity of the innovative drug has expired, even where there is no patent protection for that drug.

The Federal Court of Appeal found that the Governor in Council’s use of innovator market exclusivity was rationally connected to subsection 30(3) of the Food and Drugs Act in order to give effect to the relevant provisions of NAFTA and TRIPS and to ensure that data is protected against unfair commercial use. 

The Federal Court of Appeal also upheld the Federal Court’s finding that the DPR is constitutionally valid but ultimately relied on a different head of federal power to justify its findings. In particular, while the Federal Court found that the DRP was intra vires the federal trade and commerce power under subsection 91(2) of the Constitution Act, 1867, the three judges of the Federal Court of Appeal unanimously agreed that the DPR in fact constitutes a valid exercise of the federal criminal law power under subsection 91(27) of the Constitution Act, 1867.

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