Federal Court: Health Canada’s decision to deny filing of Natco’s ANDS was “reasonable”

The Federal Court has dismissed an application for judicial review (2020 FC 788) of Health Canada’s decision to deny Natco Pharma (Canada) Inc.’s (“Natco”) abbreviated new drug submission (“ANDS”) for a drug that contains two medicinal ingredients, tenofovir alafenamide hemifumarate (“TAF”) and emtricitabine. TAF and emtricitabine are antiretroviral agents used in the treatment of HIV/AIDS.

Health Canada concluded that the ANDS was prohibited by the data protection provisions of the Food and Drug Regulations, which provide that a manufacturer may not file an ANDS for a new drug “on the basis of a direct or indirect comparison between the new drug and the innovative drug” for a defined period.

Natco’s ANDS compares its drug to DESCOVY, a drug marketed by Gilead Sciences Canada Inc (“Gilead”), which contains TAF and emtricitabine.

Health Canada does not consider DESCOVY to be an “innovative drug”, as it was approved subsequent to Gilead’s GENVOYA drug, which contains TAF, emtricitabine and two other antiretroviral agents. However, Health Canada considers GENVOYA to be an “innovative drug” under the data protection provisions.

Regulatory Framework

The “data protection” provisions of the Food and Drug Regulations (C.08.004.1) set out two main time periods:

• A “no file” period of six years, during which a manufacturer may not file an ANDS or other submission for a Notice of Compliance; and
• A “data protection” period of eight years, during which the Minister of Health may not approve a submission or issue a notice of compliance – this period may be lengthened if there is data regarding pediatric populations.

These time periods are triggered 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”.

Therefore, the Court stated that the key question for Health Canada was whether Natco sought the notice of compliance “on the basis of a direct or indirect comparison” between its new drug and an “innovative drug”.

As stated in section C.08.004.1, the data protection provisions must be considered in light of the North American Free Trade Agreement (NAFTA) and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). NAFTA and TRIPS provide that, if the state, as a condition of approving the marketing of pharmaceutical products that “utilize new chemical entities”, requires the submission of “undisclosed test or other data” that is the product of “considerable effort”, then the state shall protect such data against disclosure or unfair commercial use.

The Court noted that this is further confirmed in the Regulatory Impact Analysis Statement (RIAS) that accompanied the current data protection provisions when they were promulgated in 2006. However, the RIAS notes that the definition of “innovative drug” specifically prohibits innovators from “obtaining additional terms of data protection for variations in medicinal ingredients”.

Health Canada’s Decision

Health Canada concluded that, as GENVOYA was an “innovative drug” that was properly granted data protection for TAF, “consistent with the intent of section C.08.004.1 to protect new chemical entities, other drugs containing [TAF], such as DECOVY, also benefit from the same period of data protection”.

Health Canada noted that both TAF and emtricitabine had been approved in a drug at the time DESCOVY was approved, so it was not eligible for a separate term of data protection. However, “DESCOVY was protected under the data protection term for GENVOYA with respect to [TAF] because DESCOVY also contains this medicinal ingredient.”

Although Natco’s ANDS was filed based on a direct comparison to DESCOVY and made no comparison to GENVOYA, Health Canada concluded that the obligations under NAFTA and TRIPS “protect the new chemical entity … for the entire duration of the data protection term”.

Health Canada’s conclusion was further supported by the fact that there was reliance on the data from GENVOYA in the approval of DESCOVY.

Federal Court: Health Canada’s Decision Was Reasonable

The Federal Court dismissed the application for judicial review and concluded that Health Canada’s decision was reasonable.

The Court was of the view that Health Canada’s consideration of the intent of the regulations and the obligations under the trade agreements was entirely reasonable and rejected Natco’s argument that Health Canada effectively broadened the definition of “innovative drug” to include other drugs with the same medicinal ingredient.

The Court concluded that Health Canada’s decision did not mean that it considered DESCOVY as an innovative drug or treated it as if it was one, but, instead, Health Canada properly concluded that DESCOVY was “protected under” or “benefited from” the term of data protection granted to GENVOYA as an innovative drug.

The Court accepted Natco’s argument that Health Canada “skip[ed] a step” by not assessing whether there was a direct or indirect comparison to an innovative drug. The mere presence of the chemical entity does not mean there has been a “direct or indirect comparison” to the innovative drug that contains it.

The Court found that, had Health Canada based its conclusion solely on the fact that DESCOVY contained TAF, without assessing whether Natco’s submission directly or indirectly compared its drug to the innovative drug GENVOYA, then the decision would have been unreasonable. However, the Court was satisfied that Health Canada considered the issue of reliance on the data for GENVOYA in the approval of DESCOVY. Natco’s submission, which compared its drug to DESCOVY, thus made a “direct or indirect comparison” to GENVOYA, an innovative drug.

Authors: Jordan Scopa and Jaclyn Tilak