On July 12, 2021, the Federal Court of Appeal (Canada) (FCA) released its decision1 in relation to the Minister of Health’s refusal to grant data protection for Janssen’s SPRAVATO® (esketamine) drug, which refusal was affirmed by the Federal Court Trial Division. Data protection had been refused on the basis that SPRAVATO was not an "innovative drug" eligible for such protection.
What you need to know
The FCA determined that the Minister of Health’s decision—that SPRAVATO is a variant of a medical ingredient that had already been approved by Health Canada thus making it ineligible for data protection—was reasonable.
- The FCA had previously considered (in its decision in Takeda2) whether an enantiomer of a previously approved medicinal ingredient is eligible for data protection and had concluded that enantiomers were not. There was a strong dissent in the Takeda decision.
- Janssen had asked the FCA to revisit its prior decision in Takeda and to come to a different conclusion in interpreting the applicable regulations.
- The FCA refused to reconsider its interpretation of the applicable regulations as set out in Takeda and refused to allow Janssen to adduce new evidence on appeal.
- Until this decision is overturned on appeal or reconsidered, potentially in view of new international obligations, prospects are very dim that an enantiomer of a previously approved medicinal ingredient will be eligible for data protection in Canada.
- Janssen has until September 29, 2021 to file an application seeking leave to appeal the FCA decision to the Supreme Court of Canada.
SPRAVATO is a drug that treats major depressive disorder in patients who have not responded to other antidepressant medications. The active ingredient in SPRAVATO is esketamine hydrochloride, an enantiomer of ketamine hydrochloride. While ketamine hydrochloride was previously approved by Health Canada as an injectable anaesthetic, circumstances surrounding the marketing authorization for esketamine hydrochloride differed substantially than the circumstances surrounding ketamine hydrochloride, including that:
- SPRAVATO was fast-tracked by Health Canada because it addressed an unmet need among Canadians suffering from major depressive disorder;
- SPRAVATO’s authorization was for an indication (major depressive disorder) completely different than the indication for ketamine hydrochloride (anaesthesia);
- SPRAVATO was directed to a nasal-spray dosage form rather than an injectable dosage form;
- SPRAVATO was manufactured and developed by a different manufacturer than ketamine hydrochloride; and
- SPRAVATO required 29 clinical studies over eight years to establish safety and efficacy.
Data Protection Regulations
Canada’s data protection regulations arose out of its obligations under the North American Free Trade Agreement (NAFTA) which entered into force on January 1, 1994. The obligations culminated in Canada’s data protection regulations (the "Regulations"), which are part of the federal Food and Drug Regulations3 . The Regulations protect the data of "innovative drugs". An "innovative drug" is defined in the Regulations4 as "a drug that contains a medicinal ingredient not previously approved in a drug by the Minister and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph". (Emphasis added.)
Data protection rights for innovative drugs are valuable rights. If a competitor manufacturer seeks a marketing authorization for its drug based on a direct or indirect comparison to the innovative drug which has data protection, the competitor manufacturer is prevented from filing its regulatory submission with Health Canada for six years (the "no-file" period) and from obtaining marketing authorization from Health Canada for eight years (the "no-approval" period) from the date of approval of the innovative drug. The no-approval period can be extended by six months, if the manufacturer of the innovative drug files pediatric data within a certain time (this is known as the pediatric extension of data protection).
Minister of Health and Federal Court Trial Division decisions
The Minister of Health refused data protection for SPRAVATO because esketamine hydrochloride is an enantiomer of a previously approved drug, ketamine hydrochloride. The other circumstances (i.e., the 29 clinical trials, the fast-tracking of the SPRAVATO regulatory submission, the unmet need of Canadians, etc.) did not bear on the Minister’s interpretation of the Regulations because, in its view, data protection is unavailable for an enantiomer of a previously approved medicinal ingredient.
After the Minister of Health refused to grant data protection for SPRAVATO, NAFTA was replaced by the Canada-United States-Mexico Agreement (CUSMA), which entered into force on July 1, 2020. The Regulations were updated to refer to CUSMA rather than to NAFTA.
Janssen filed an application for judicial review of the Minister’s decision to refuse data protection with the Federal Court Trial Division. While the Federal Court agreed that there were factual differences between the Takeda decision and the facts relating to SPRAVATO, it concluded that the interpretation of the Regulations adopted by the Minister—that the threshold issue of whether an enantiomer was an "innovative drug" should not be influenced by the facts—and confirmed that data protection would not be available for SPRAVATO. (On this point, the Minister’s view had been that the Minister only had to consider whether the data was worthy of protection—that is, whether its generation required "considerable effort"—only after the threshold issue had been determined. Put another way, the Minister did not have to consider Janssen’s "considerable efforts" arguments, because the Minister had determined, as a threshold issue, that esketamine was an enantiomer and thus not capable of attracting data protection.)
Janssen appealed the Federal Court Trial Division’s decision to the FCA. The FCA accepted that the decision of the Minister of Health was reviewable on the reasonableness standard.
The FCA referred to the Takeda decision, and noted that Takeda related to the drug DEXILANT (dexlansoprazole), an enantiomer of lansoprazole used to treat gastroesophageal reflux disease. Lansoprazole had been previously approved in Canada, but dexlansoprazole had not. While Takeda used considerable effort to generate clinical and pre-clinical data for the marketing authorization of DEXILANT, the indications and dosage forms between DEXILANT and the previously approved lansoprazole were the same. The FCA in Takeda determined that DEXILANT, being an enantiomer of lansoprazole, was a "variation" of a previously approved medicinal ingredient and, on that basis alone, concluded that data protection was unavailable.
While Janssen asked the FCA to depart from its decision in Takeda, the FCA observed that precedents are a "foundational principal of common law" and that decisions of other courts (whether vertical or horizonal) must be followed to promote certainty and consistency, unless the case under consideration can be distinguished on the facts or unless a prior decision is "manifestly wrong." The FCA concluded that the Minister’s decision to follow Takeda was reasonable and that the prior decision in Takeda was not manifestly wrong. The FCA further rejected Janssen’s argument that the certainty and predictability of stare decisis must give way to changes in the economic, social and political circumstances underlying the Takeda decision. As a result, SPRAVATO, being an enantiomer, fell squarely within the ruling in Takeda, which had already determined that enantiomers are an excluded class of variants not entitled to data protection.
Janssen asked the FCA to allow it to present fresh evidence regarding the impact of CUSMA, which had come into force on July 1, 2020, on the interpretation of the Regulations. The FCA determined that the fresh evidence could have been adduced at the time of Janssen’s application for judicial review to the Federal Court Trial Division. Further, CUSMA was not in force on the date (April 25, 2019) of the decision of the Minister of Health. So, determining whether the Minister’s decision was reasonable should not involve a consideration of CUSMA, because a judicial review of the Minister’s decision should be based only on the facts and law that existed at the time of the decision. (The FCA left open the possibility of Janssen applying for judicial review of the Minister’s decision to refuse to re-consider the data protection of SPRAVATO in light of CUSMA.)
Although there had been a strong dissent in Takeda, by Justice Stratas—to the effect that an enantiomer is simply an example that could be a “variation” and that data protection should depend on the circumstances surrounding the generation of the data needed to obtain marketing authorization—that dissent had no impact on this decision of the FCA. Interestingly, Justice Stratas was a member of the (unanimous) panel in the Janssen FCA case. The FCA determined that judges should follow prior decisions, even if they disagree with them. Citing from an English decision, the Court concluded: "‘however wrong or anomalous the decision may be it must stand … unless or until it is altered by Parliament.’ The same may be said here." The FCA dismissed Janssen’s appeal.
As for what’s next, there are various possibilities for what may happen next, including the following:
- Janssen may seek leave to appeal this decision to the Supreme Court of Canada. (The deadline to seek leave is September 29, 2021.)
- A refusal by the Minister of Health to re-consider data protection for SPRAVATO based on CUSMA arguments may be reviewed by the court. (Again, the Federal Court of Appeal left this open as a possibility.)
In the meantime, there is little wriggle room, if any, to seek data protection for an enantiomer of a previously approved medicinal ingredient, regardless of the circumstances surrounding the marketing authorization, including unmet need of Canadians, safety and efficacy data required by regulators, and the efforts and resources required to generate those data. This will be a disappointing result to stakeholders.
Hopefully, there will be further opportunities to revisit the current interpretation and application of the Data Protection Regulations. For example,
- the CUSMA arguments may be received and applied as a matter of first impressions in another data protection case involving a different drug product;
- there may be an opportunity to leverage the current trend of looking to Canada’s international obligations, when interpreting domestic laws and regulations, as well as reviewing Health Canada decisions; or
- the definitional provisions of the Regulations may be altered if there were to be political will to effect change.
1 Janssen Inc. v. Canada (Health), (FCA) https://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/500364/index.do.
2 Takeda Canada Inc. v. Canada (Health), 2013 FCA 13,  3 F.C.R. 70.
3 Food and Drug Regulations C.R.C., c. 870, section C.08.004.1.
4 Subsection C.08.004.1(1).
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