Data Protection in Canada: Court of Appeal Confirms Narrow Approach
On January 18, 2013, the Federal Court of Appeal (FCA) released its decision in Takeda Canada Inc. v. The Minister of Health and Attorney General of Canada and, in doing so, provided important insight into the operation of the Food and Drug Regulations (Regulations) as it relates to data protection. The FCA refused to grant data protection to Takeda’s drug Dexilant (dexlansoprazole) because it was a "variation" of a previously approved drug.
Background
Canada introduced the concept of data protection into its regulatory framework so that it would be in compliance with its obligations under both the North American Free Trade Agreement (NAFTA) and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). The data protection regime prevents second-entry drug manufacturers from relying on undisclosed data submitted to government entities by first-entry manufacturers in order to obtain approval for new drugs. There is a six-year no-filing period and an eight year no-approval period for second-entry drug products, meaning that for eight years following the first approval of a drug competitors are prevented from relying on the first manufacturer’s data to get their own marketing approval. Data protection exists regardless of whether the drug is protected by a Canadian patent. However, data protection is available only for an "innovative drug," defined as a "drug that contains a medicinal ingredient not previously approved in a drug by the Minister and one that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph."1
Summary of the Decision
Takeda had appealed a Federal Court decision, which confirmed the Minister of Health’s refusal to grant drug data protection to Takeda. According to the Minister, the drug did not meet the definition of an "innovative drug" under the Regulations because it was an enantiomer of a previously approved drug (lansoprazole).
The FCA found that the Minister was correct in refusing to list Dexilant on the Register. The FCA concluded that if a drug’s medicinal ingredient is an enantiomer of a medicinal ingredient previously approved by the Minister, it automatically constitutes a variation under the Regulations. In coming to this conclusion, the FCA interpreted the definition of an "innovative drug" as one that enumerates several examples of variations, one of which is an enantiomer. As a matter of statutory interpretation, the FCA concluded that the phrase "such as" (within the definition of innovative drug) means "for example" and that an enantiomer is automatically excluded from the definition of innovative drug. As a result, Takeda’s drug was not entitled to data protection.
In a strong dissent, Justice Stratas found that Dexilant met the definition of an innovative drug and was not a variation.
Implications
According to the Court’s interpretation of the definition of an innovative drug, a drug will automatically be barred from receiving data protection if it is a salt, ester, enantiomer, solvate or polymorph, irrespective of the extensive new clinical data that a manufacturer is required to generate to get marketing approval for the drug and irrespective of other circumstances that might support an application for data protection.
While it is unclear whether Takeda will apply for leave to appeal to the Supreme Court of Canada, the ruling as it currently stands means that a drug product’s "variations" will not be afforded data protection. 
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1 Food Drug Regulations, C.R.C., c. 870 at c.08.004.1(1) [emphasis added].
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