Catalyst Pharmaceuticals v. Canada, 2021 FC 505

In Catalyst Pharmaceuticals, Inc. v Canada (Attorney General), 2021 FC 505, the Federal Court allowed Catalyst Pharmaceuticals, Inc. (“Catalyst”) and KYE Pharmaceuticals Inc.’s (collectively, the “Applicants”) application seeking judicial review of a decision of the Minister of Health (“Minister”). This decision related to the issuance of a Notice of Compliance (“NOC”) to Médunik Canada (“Médunik’s”).

The Federal Court ruled that the Applicants had standing to bring their application for judicial review, quashed the Minister’s decision, and returned it back to the Minister for redetermination.

Background

Catalyst and Médunik both sought approval of their drugs containing amifampridine, a medicinal ingredient that could be used to treat an ultra-rare and debilitating autoimmune disorder. Catalyst was the first to initiate the review process, as it requested “priority review” of its New Drug Submission for its drug FIRDAPSE in August of 2019. In October of the same year, Health Canada had approved Catalyst’s request and, in November, Catalyst had submitted its New Drug Submission for FIRDAPSE.

Catalyst also sought data protection, asking the Minister to classify FIRDAPSE as an “innovative drug”, as characterized under section C.08.004.1 of the Food and Drug Regulations (“Regulations”). Only drugs that contain a medicinal ingredient not previously approved in a drug by the Minister can qualify for data protection. The Minister informed Catalyst in November of 2020 that FIRDAPSE appeared to be an “innovative drug” and that FIRDAPSE would be listed on the Register of Innovative Drugs. The Minister also granted an NOC for FIRDAPSE in July of 2020, without any accompanying reasons for doing so.

Concurrent to Catalyst’s application for approval, Médunik was granted priority review status for its NDS. The Minister granted an NOC to Médunik for its RUZURGI product in August of 2020, providing no accompanying reasons for doing so. Médunik’s NOC was signed by Dr. J. Patrick Stewart, the same signor of the Catalyst NOC for FIRDAPSE.

The issue surrounded a perceived shortcoming in the regulatory system. Here, there was evidence of concurrent New Drug Submissions, with both New Drug Submissions being processed almost simultaneously. One was approved before the other while being classified as an “innovative drug”, which afforded it data protection. As only the first drug that has an NOC issued could qualify for data protection, Catalyst sought judicial review of the Minister’s decision to also grant an NOC to Médunik’s RUZURGI on the basis that it was inconsistent with Catalyst’s granted data protection.

Analysis

Applicants Had Standing to Bring Application for Judicial Review

The Federal Court ruled that the Applicants did have standing to challenge the decision of the Minister regarding whether the issuance of an NOC to Médunik contravened the data protection provision of the Regulations. As the Applicants were not challenging the Minister’s decision to grant an NOC on safety and efficacy grounds, the Federal Court granted standing to the Applicants. The Federal Court established that an innovator whose drug is listed on the Register of Innovative Drugs has standing to challenge an NOC issued to another company if it alleges that the NOC was issued in violation of the data protection afforded to its own product.

A Decision Without Reasons Precludes a Reasonableness Review

The Applicants, Médunik, and the Attorney General of Canada agreed that the standard of review would be a reasonableness standard. However, the Federal Court sided with the Applicants in ruling that there were barriers to conducting a typical reasonableness review in this case.

As the Minister’s decision did not include reasons, the ability to conduct a review was nullified. The Federal Court reviewed several instances of case law from the Supreme Court of Canada and the Federal Court in understanding that, while the Court could examine the record before the Minister, the reasons must nevertheless express why the Minister made their conclusions in the manner that they did.

The Federal Court rejected the Attorney General’s argument that, since the NOC was granted to Médunik, all the associated checks and balances must have been completed. The Federal Court refused to draw the inferences that the Attorney General asked, namely, that the IP Check process was followed by virtue of RUZURGI being granted an NOC, and the inference that FIRDAPSE was not overlooked by virtue of the same person signing both Catalyst’s and Médunik’s NOCs.

This was, as the Federal Court termed it, a “trust us, we got it right” approach, which was expressly rejected in Vancouver International Airport Authority v Public Service Alliance of Canada, 2010 FCA 158. As there was no indication in the Minister’s decision, nor on the record that the verification and regulatory processes were adopted, the Federal Court rejected the Attorney General’s argument and ruled in favour of the Applicants.

The Federal Court highlighted that its role on judicial review is not to provide the decision-maker with the proper interpretation of the Regulations. Its role is to simply look at whether the Minister’s interpretation was reasonable or correct, as the case and standard of review would indicate. The Federal Court followed the reasoning from Canada v Kabul Farms Inc., 2016 FCA 143, in understanding that requiring administrative decision-makers to write more detailed reasons would not hinder their work or be inconsistent with the efficiency of administrative justice.

Conclusion:

As neither the record nor the Minister’s decision permitted the Federal Court to conduct a review with the standard of reasonableness, the Federal Court quashed the Minister’s decision and remitted the matter back to the Minister for redetermination.

Authors:  Mark Leonard and Nisheet Karthikeyan, 2021 Summer Student-at-law