Plus ça change…? The new amendments to the Food and Drug Regulations and the Patented Medicines (Notice of Compliance) Regulations 



December 2006 - (NOC: News of Course , published by CAPRA)

NOC: News of Course , published by CAPRA

On October 5, 2006, amendments to section C.08.004.1 of the Food and Drug Regulations and to the Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regs) came into force.  Among the objects of the amendments are "to provide new drugs with an internationally competitive, guaranteed minimum period of market exclusivity of eight years"[1] and the restoration of "the balanced policy underlying the PM(NOC) Regs by reaffirming the rules for listing patents on the register and clarifying when listed patents must be addressed."[2]

For the benefit of the readers, it might be useful to state some basic principles of Canadian patent law to understand why there is a special regime for pharmaceutical patents.  A patent results from a bargain between the inventor and the Government of Canada – in exchange for the inventor disclosing in her patent application everything a skilled worker in the relevant field would need to duplicate the invention, the Government of Canada grants the inventor a period of exclusivity for practicing that invention once the patent office is satisfied that the invention is entitled to patent protection.  This period of exclusivity for patents issued from applications filed on or after October 1, 1989, is 20 years from the date of the application.  If two inventors file an application for the same invention, the first person to file is the one entitled to the patent.  This "first to file" system encourages inventors to initiate the application process as quickly as possible.

Once the inventor of a new machine or new process; for example of making shoes, has made his application, he is free to begin marketing the invention[3].  However, the inventor of a new drug or a new process for making or administering a drug is not so lucky since the Food and Drugs Act prohibits anyone from marketing a medicine until she has obtained approval to do so by receiving a Notice of Compliance (NOC) from Health Canada (HC).  When a new drug is submitted for approval to HC, the applicant must supply clinical data sufficient to demonstrate safety and efficacy of the new drug.  HC will issue the applicant an NOC only if they are satisfied that the submitted clinical data supports the claims.

For the applicant, gathering the required clinical data is an expensive and time-consuming process that may take several years.  While the inventor of the new drug is gathering this data, the period of patent exclusivity is effectively wasted, since the drug cannot be marketed until the manufacturer has received the NOC.  By the time the NOC is issued, the patent may only have 8 to 10 years of life left.  The effect of the drug approval process is to shorten the actual period of market exclusivity that the inventor of a new drug receives compared to the period of market exclusivity that the inventor of a device that does not require regulatory approval will have.

Food and Drug Regulations Amendments

Section C.08.004.1 of the Food and Drug Regulations is the "so-called" data protection provision. A subsequent applicant for approval to market a drug for which an NOC has already been issued is not required to duplicate clinical trials conducted by the first NOC holder, but is permitted to demonstrate safety and efficacy by submitting bioequivalence data against the formulation for which the NOC was originally issued.  In effect, the subsequent applicant derives a benefit from the first applicant's clinical data.  Under the amendments to the Food and Drug Regulations, the first party to obtain an NOC for a drug will have an eight-year period of exclusivity starting from the date it received its NOC based on the clinical data.  A subsequent applicant for marketing approval who seeks to establish safety and efficacy by comparing its product to the product that received the first NOC will not be able to file an application until six years after the first NOC was issued.  HC will not be permitted to issue an NOC to that applicant until eight years after the issuance of the first NOC.  The additional two-year period will correspond in most cases to the 24-month automatic stay under the PM(NOC) Regs.  If the first applicant submits additional studies with the goal of increasing knowledge about the behaviour of the drug in pediatric populations which will assist health professionals and others in making informed choices about drug therapy, it will be entitled to an additional six months data protection.

The amended regulation also contains a definition of "innovative drug" which excludes variations of previously approved drugs such as salts, esters, enantiomers, solvates or polymorphs from obtaining data protection.  A registry of innovative drugs will be established and maintained, listing the name of the drug, the active ingredient, and the date data protection expires, including any pediatric extension.

Another important point to note is that a drug is only entitled to data protection so long as it is being marketed in Canada.  If a drug is withdrawn after approval, the drug will lose its data protection.

The amended regulation applies in respect to all drugs for which an NOC was issued on or after June 17, 2006.

PM (NOC) Regs Amendments

Since first being enacted in 1993, the PM(NOC) Regs have resulted in an impressive body of case law.  Whether the stated desire of reducing the volume of litigation under these regulations will be realized remains to be seen.  Nevertheless, a number of issues have been addressed in the amendments.

Under the previous version of the PM(NOC) Regs, the party filing the first New Drug Submission (NDS) was permitted to submit a list of patents that included claims to the medicine itself and to the use of the medicine.  That party was also able, at any later date, to file an amended list within 30 days of issuance of any patent issued after the granting of the NOC to add the new patent, provided that its application had been filed before the submission in support of the NOC.

Perhaps one of the strategies under the old PM(NOC) Regs that vexed most generics companies was the rolling series of additions to the patent list.  A generic manufacturer would file its submission, usually in the form of an abbreviated new drug submission (ANDS), and serve its notice of allegations (NOA) explaining either that it was content to wait until all the patents on the patent list had expired to receive its NOC, or explaining why the patents were either invalid or would not be infringed.  One amendment to the PM(NOC) Regs now makes filing of the submission by the generic manufacturer a precondition of serving an NOA.  The innovator would have 45 days after being served with the NOA to commence an application in court to prohibit HC from issuing an NOC until all the patents on the list had expired.  This would trigger an automatic 24-month period during which HC would not be permitted to issue an NOC so that the Court could determine the respective rights of the two drug makers.  Under the old regulations an innovator could add a new patent to the list by filing a supplementary new drug submission (SNDS) for certain changes in order to obtain an updated NOC.  Adding a new use, such as "social phobia (social anxiety disorder)" for a drug previously approved as an "antidepressant / antiobsessional / antipanic agent"[4] could be used to justify the filing of a SNDS so that a new patent could be added to the list when the new NOC was issued.  The generic would then have to amend its application to deal with the new patent, which would trigger a further 24-month delay.  Even if the newly added patent concerned a different formulation or a different use than the one for which the generic sought approval and the generic ultimately justified its allegation of non-infringement, it would still have been delayed for another two years.

The amendments contain a number of changes to prevent this practice from continuing.  Firstly, the patents on the list must be relevant to the drug product that the applicant is approved to sell under its NOC.  Secondly, the patent list is tied to the particular NDS or SNDS and may only include patents for which an application had been made prior to the filing of that NDS or SNDS.  Thus, while an innovator may submit a SNDS to obtain approval for a change in use or for a change in formulation or dosage form, its patent list will be tied to that specific formulation.  Any new patents that claim that use, formulation or dosage form may be added.  However, a patent for a new physical form of the active pharmaceutical ingredient (API) will not qualify for inclusion on such a list.  Thirdly, once a generic company files its ANDS the patent list is "frozen" as of that date, and it does not need to address any new patent added to the patent list for that drug after the date of its ANDS.[5]

The transitional provisions, however, may cause some difficulty.  According to the Regulatory Impact Analysis Statement, although freezing the register and eliminating early NOAs is thought to be the most expedient solution to the problem of multiple stays under the PM(NOC) Regs, considerable confusion could result from the immediate application of these changes to pre-existing facts.  The transitional rules accompanying the amendments thus provide that, for those generic manufacturers who have already filed a submission or supplement for an NOC in respect of a generic version of an innovative drug with patents on the register, the filing date for the purposes of amended section 5 is deemed to be the date the amendments come into force."[6]  The transitional provision for subsections 5(1) and 5(2) provide that "the date of filing of the submission is deemed to be the date of the coming into force of these Regulations."[7]  The problem is that the PM(NOC) Regs require that certain steps are either concurrent with or follow the filing of the submission.  For instance, if the generic manufacturer has already served its NOA, it will pre-date the deemed filing date for its submission, contrary to subsection 5(3) of the amended regulations.  If that problem is solved by assuming that the NOA is deemed to have been served on the date the regulations came into force, does this give an innovator that had not commenced an application to court a further 45 days from October 5, 2006 to reconsider its decision?  It would appear that the intended effect would have been achieved had the transitional provision stated: "the date of filing of the submission is deemed, for the purposes of subsection 5(4) only, to be the date of the coming into force of these Regulations."

The amendments also contain a provision intended to parallel the data protection provision that denies protection to drugs that have been withdrawn from the market.  If a drug is no longer being marketed, the Minister is required to delete any listed patents.  This provision is subject to a 90-day grace period so that technical withdrawals such as one due to a change in manufacturer will not result in deletion of listed patents before the approval can be moved over to the new manufacturer.

The 24-month automatic stay is a powerful instrument and to discourage its frivolous use, the PM(NOC) Regs contained a provision permitting the generic company to seek compensation for the period of time it was kept from the market in the event the court held that the allegations in the NOA had been justified.  Under the old form of the regulation the generic manufacturer could choose between proving its actual loss (damages) or seek to have the innovator pay the profits that was earned during that 24-month period.  The amended regulation now restricts the generic manufacturer to proving its actual loss and also specifies that the Minister is not liable for any such damages.


The amendments to the Food and Drug Regulations and the PM(NOC) Regs represent an effort by the Government of Canada to address a number of problems that had been encountered in practice and to restore the balance between innovator and generic manufacturers of pharmaceutical products to the point which the Government believes protects their interests and also serves the interests of the Canadian public.  While the provisions appear to effectively address a number of practical problems that were discovered with the prior version of the regulations, the transitional provisions with respect to subsections 5(1) and 5(2) may well require either legislative or judicial clarification to avoid a number of unintended consequences.

[1] Regulatory Impact Analysis Statement for the amendments to the Food and Drug Regulations

[2] Regulatory Impact Analysis Statement for the PM(NOC) Regs amendments

[3] In Canada an inventor has one year after taking a step which makes the invention available to the public within which to apply for a patent.  However, many countries have "absolute novelty" rules which prevent inventors from obtaining patent protection if they published the invention before filing a patent application.

[4] Apotex Inc. v. Minister of Health (1999), 87 C.P.R. (3d) 271 (F.C.T.D.) affirmed 11 C.P.R. (4th) 538 (F.C.A.)

[5] Subsection 5(4) of the amended PM(NOC) Regs

[6] Regulatory Impact Analysis Statement for the PM(NOC) Regs amendments

[7] Section 7 of the amending regulation for the PM(NOC) Regs