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Registration SOR/2006-241 October 5, 2006

FOOD AND DRUGS ACT

Regulations Amending the Food and Drug Regulations (Data Protection)

p.e.2006-1076 October 5, 2006

Her Excellency the Governor General in Council, on the rec­ ommendation of the Minister of Health, pursuant to subsec­ tion 30(3)" of the Food and Drugs Act, hereby makes the annexed Regulations Amending the Food and Drug Regulations (Data Protection).

REGULATIONS AMENDING THE FOOD AND DRUG REGULATIONS (DATA PROTECTION)

AMENDMENT

1. Section C.08.004.1 of the Food and Drug Regulations! is replaced by the following:

C.08.004.1 (I) The following definitions apply in this section. "innovative drug" means a drug that contains a medicinal ingredi­

ent 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, enantiorner, solvate or polymorph. (drogue innovante) --_.. . - .. . -_. - _..

"pediatric populations" means the following groups: premature babies born before the 37th week of gestation ; full-term babies from 0 to 27 days of age; and all children from 28 days to 2 years of age, 2 years plus 1 day to I I years of age and II years plus 1 day to 18 yean; of age. (population pedia­ trique;

(2) This section applies to the implementation of Article 171I of the North American Free Trade Agreement, as defined in the definition "Agreement" in subsection 2(1) of the North American Free Trade Agreement Implementation Act, and of paragraph 3 of Article 39 of the Agreement on Trade-related Aspects of Intellec­ tual Property Rights set out in Annex lC to the World Trade Or­ ganization Agreement, as defined in the definition "Agreement" in subsection 2(1) of the World Trade Organization Agreement Implementation Act.

(3) 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,

(a) the manufacturer may not file a new drug submission, a supplement to a new drug submission, an abbreviated new drug submission or a supplement to an abbreviated new drug sub­ mission in respect of the new drug before the end of a period of six years after the day on which the first notice of compliance was issued to the innovator in respect of the innovative drug; and

• S.C. 1994, c. 47, s. 11 7 C.R-C., c. 870I

(b) the Minister shall not approve that submission or supple­ ment and shall not issue a notice of compliance in respect of the new drug before the end of a period of eight years after the day on which the first notice of compliance was issued to the innovator in respect of the innovative drug.

(4) The period specified in paragraph (3)(b) is lengthened to eight years and six months if

(0) the innovator provides the Minister with the description and results of clinical trials relating to the use of the innovative drug in relevant pediatric populations in its first new drug sub­ mission for the innovative drug or in any supplement to that submission that is filed within five years after the issuance of the first notice of compliance for that innovative drug; and (b) before the end of a period of six years after the day on which the first notice of compliance was issued to the innova­ tor in respect of the innovative drug, the Minister determines that the clinical trials were designed and conducted for the pur­ pose of increasing knowledge of the use of the innovative drug in those pediatric populations and this knowledge would there­ by provide a health benefit to members of those populations.

(5) Subsection (3) does not apply if the innovative drug is not being marketed in Canada.

(6) Paragraph (3)(0)" does not apply to a subsequent manufac­ turer if the innovator consents to the filing of a new drug submis­ sion, a supplement to a new drug submission, an abbreviated new drug submission or a supplement to an abbreviated new drug submission by the subsequent manufacturer before the end of the period of six years specified in that paragraph .

(7) Paragraph (3)(0) does not apply to a subsequent manufac­ turer if the manufacturer files an application for authorization to sell its new drug under section C.07 .003.

(8) Paragraph (3)(b) does not apply to a subsequent manufac­ turer if the innovator consents to the issuance of a notice of com­ pliance to the subsequent manufacturer before the end of the pe­ riod of eight years specified in that paragraph or of eight years and six months specified in subsection (4).

(9) The Minister shall maintain a register of innovative drugs that includes information relating to the matters specified in sub­ sections (3) and (4).

TRANSITIONAL PROVISION

2. Section C.08.004.1 of the Food and Drug Regulations, as it read immediately before the coming into force of these Regulations, applies to a drug in respect of which a notice of compliance was issued before June 17,2006.

COMING INTO FORCE

3. These Regulations come Into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(Thisstatement is not part ofthe Regulations.)

Description

The amendments to section C.08.004.1 of the Food and Drug Regulations ("Regulations") are intended to provide new drugs with an internationally competitive, guaranteed minimum period of market exclusivity of eight years. An additional six months period of data protection is available for innovative drugs that have been the subject of clinical trials designed and conducted for the purpose of increasing the knowledge of the behaviour of the drug in pediatric populations.

These amended Regulations are based on the proposal that was pre-published in the Canada Gazette, Part I, on June 17, 2006. Two minor modifications have been made as a result of the com­ ments received during the consultation period. The first modifica­ tion was the addition of a provision to allow for an innovative company to consent to the filing of a submission by a subsequent manufacturer. In the second modification, the transitional provi­ sion was altered to provide data protection for drug submissions that had not received a notice of compliance before pre­ publication on June 17,2006.

Background

The amendments to section C.08.004.1 of the Food and Drug Regulations are intended to clarify and effectively implement Canada's North American Free Trade Agreement ("NAFTA") and the Trade-Related Aspects of Intellectual Property Rights ("TRIPS") obligations with respect to the protection of undis­ closed test or other data necessary to determine the -safety and effectiveness of a pharmaceutical or agricultural product which utilizes a new chemical entity. The obligations in TRIPS require that signatories provide protection against the unfair commercial use of the data, whereas NAFfA requires that signatories provide a reasonable period of time during which a subsequent manu­ facturer is prohibited from relying on the originator's data for product approval. The reasonable period of time is specified as normally not being less than five years from the date on which regulatory approval was granted to the originator of the data. In keeping with the provisions, the government has decided to pro­ vide this protection by allowing the innovator, or the originator of the data submitted for regulatory approval, to protect investments made in the development of the product by providing a period of market exclusivity.

Under the current Regulations, the data protection exclusivity period arises when the Minister of Health examines and relies on an innovator's undisclosed data in order to grant a notice of com­ pliance to a generic manufacturer. However, to receive a notice of compliance in Canada, a generic manufacturer need only demon­ strate bioequivalence by comparing its generic product to the innovator's product. Therefore, in actual practice, the Minister typically does not examine the data contained in the innovator's submission in order to grant a notice of compliance for a generic product ~ a result, data protection does not arise where bio­ equivalence forms the basis of a generic submission, as affirmed by the Federal Court ofAppeal in Bayer Inc. v. Canada (Attorney General), 87 C.P.R (3d) 293.

While the comparison necessary to demonstrate bioequivalence rarely involves an examination of the innovator's data, it does involve reliance on the innovator's product Therefore, these amendments are being introduced to clarify that the aforemen­ tioned reliance will give rise to an exclusivity period.

Amendment to C.08.0D4.1

.The government is introducing an eight-year term of data pro­ tection for innovative drugs with a six-year no-filing period within the eight-year term of data protection. A:; a result, Canada will now provide for a six-year period (within the eight-year term) where a generic manufacturer, seeking to copy an innova­ tive drug, will not be permitted to file a new drug or abbreviated new drug submission with the Minister. This will be followed by a no-marketing period of two years during which the Minister will not grant a notice of compliance to that generic manufacturer. This additional two-year period is generally reflective of the pe­ riod of time required to approve a drug submission, as well as the time required for a generic manufacturer to meet its obligations under the Patented Medicines (Notice of Compliance) Regula­ tions ("PM(NOC) Regulations"). The introduction of these changes will provide an adequate incentive for innovators to invest in research, and to devc:lop and market their products in Canada. It will also bring Canada in-line with a system similar to that of other jurisdictions in respect of the no-filing period..

The introduction of the six-year no-filing period, requires an exception to this provision to allow for the filing of drug submis­ sions within the framework of the Canada's Access to Medicines Regime ("CAMR") also known as Jean Chretien Pledge to Africa Act. Although these drug submissions can be submitted within the no-filing period, the notice of compliance will not be issued until the expiry of the data protection term.

Innovative Drug

The definition of "innovative drug" specifically prohibits inno­ vators from obtaining additional terms of data protection for variations of medicinal ingredients. The list of variations is not exhaustive, but rather meant to give examples of the types of · variations not considered l or protection. The exclusion of varia­ tions of a previously approved medicinal ingredient from the scope of protection was introduced to avoid the granting of an additional eight years of protection where an innovator seeks ap­ proval for a minor change to a drug. For other arguable variations not included in the list, such as metabolites, an assessment will be made as to whether or not approval is being sought primarily on the basis of previously submitted clinical data (i.e. without the support of new and significant clininal data) or not. This position is consistent with both NAFTA and TRIPS which only require the granting of protection for undisclosed data, the origination of which involved a considerable effort.

Combinations ofpreviously approved medicinal ingredients are not eligible for an additional data protection period. Where a combination consists of an innovative drug and another medicinal

ingredient not covered by data protection, a generic manufacturer will not be allowed to file or receive a notice of compliance, as the case may be, in respect of the combination until expiry of the original data protection period of the innovative drug. Where two or more innovative drugs are sold in combination, a generic manufacturer will not be allowed to file or receive a notice of compliance, as the case may be, until expiry of the latest data protection term.

Biologic drugs arc included within the scope of innovative drugs. In keeping with the definition, only those biologics that have medicinal ingredients that have not been previously ap­ proved and not considered variations will receive protection.

Triggering mechanism

The triggering mechanism is intended to capture generic and second entrant manufacturers that are seeking to rely on direct or indirect comparison between their drug and the innovative drug. As was observed by the Supreme Court of Canada in Bristol­ Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, such direct or indirect comparisons would exclude submissions in which the submission sponsor does not rely on another manufac­ turer's safety and efficacy data in seeking approval under the Food and Drug Regulations. This is consistent with Article 1711 of NAFfA and paragraph 3, Article 39 of TRIPS, since there would be no unfair commercial use of data or the reliance on such data for the approval of the product The mechanism is intended to capture both submissions that fall under the abbreviated new drug submission provisions and submissions that are filed under the new drug submission provisions, so long as there is a direct or indirect comparison with the innovative drug .

Pediatric data protection

In addition to the eight-year term of data protection, an addi­ tional six months will now be applied if an innovator includes, in its new drug submission, or any supplement to that new drug submission filed within the first five years of the eight-year data protection period, clinical trials which were designed and con­ ducted with the purpose of increasing knowledge about the use of the drug in pediatric populations.

Comments received during the consultation period indicated a need for further clarification regarding the types of pediatric clinical trials required to be eligible for the six-month extension. The purpose of the provision is to encourage sponsors to submit trial data pertaining to the use of the drug in pediatric populations. Therefore, it must be clear that the goal of such studies was to increase knowledge about the behaviour of the drug in pediatric populations that will assist health professionals, parents, caregiv­ ers, and patients in making informed choices about drug therapy. This will provide heath benefits for pediatric patients. This goal ofincreasing knowledge should be reflected in the study hypothe­ sis, objectives, design and conduct. Clinical trial is defined in Division 5 of the Regulations as "an investigation in respect of the drug for use in humans that involves human subjects and that is intended to discover or verify the clinical, pharmacological or pharmacodynamic effects of the drug, identify any adverse events

in respect of the drug, study the absorption, distribution, metabo­ lism and excretion of the drug, or ascertain the safety or efficacy of the drug". For the purposes of the six-month extension provi­ sion, the clinical trials must have been conducted in pediatric populations.

Extending market exclusivity in this manner will encourage pediatric research and improve drug information regarding pedia­ tric usage for health professionals, thus providing health benefits to children.

Marketed in Canada

The protection of an innovative drug only applies where the in­ novative drug has received a notice of compliance and is mar­ keted in Canada. Where the drug is not being marketed in Canada, no protection will be offered. For example, this would prevent the situation where the originally marketed version of a protected innovative drug is withdrawn from the Canadian market by the innovator, but no equivalent generic drug is allowed on the Canadian market until the protection period has expired .

Register of innovative drugs

As a transparency measure, a register of innovative drugs will be created . The register will include the name of the drug, the medicinal ingredient, and the date on which the data protection and, where applicable, pediatric extension will terminate. This register should provide both transparency and predictability for Canadian pharmaceutical companies.

Consent provision

Following comments from stakeholders during the consultation period , a provision was added to allow an innovative company to provide consent to another manufacturer to both file a submission during the six-year "no file" period and to allow for the issuance of the notice of compliance during the entire protection period . This addition was a minor change from the pre-published version to simply correct an oversight.

Transitional provision

The transitional provision has been amended to allow for the protection to extend to drugs that have received notices of com­ pliance following pre-publication in the Canada Gazette, Part I, on June 17, 2006. This change is in keeping with the transition period affecting the patent"eligibility under the PM(NOC) Regu­ lations.

Amendments to the PM(NOC) Regulations

These amendments are being enacted at the same time as amendments to the PM(NOC) Regulations. Amendments to those regulations are intended to reaffirm the requirements for listing patents on the patent register, thereby restoring the original policy intent of the PM(NOC) Regulations and reducing the number of court cases between innovator and generic manufacturers, which can delay the issuance of a notice of compliance to the latter.

The changes to the PM(NOC) Regulations are also being re­ fined in response to comments received following initial publica­ tion. The changes also clarify that the PM(NOC) Regulations apply only to those second-entry submissions in which a direct or indirect comparison or reference is made to the drug for which a patent is listed The two sets of amended regulations are intended to act as a balanced set of measures, designed to work together to stabilize Canada's intellectual property protection for drugs by ensuring a minimum period of protection and maintaining a rea­ sonable ceiling on the maximum protection available. For further information on the amended PM(NOC) ·Regulations, refer to the RIAS prepared by Industry Canada and published on the same day as this RIAS.

Alternatives

Terms of protection available internationally:

Currently, the United States offers a five-year term of protec­ tion to manufacturers who file a submission for a new active in­ gredient, with three years of protection available for new uses or other significant changes approved on the basis of new and essen­ tial clinical investigations . The United States also offers an addi­ tional period of six months of exclusivity for drugs where pediat­ ric studies were conducted and deemed acceptable by the Food and Drug Administration. This additional period attaches to both the new chemical entity exclusivity and patent protection listed in the Orange Book.

On November 30, 2005 the European Union began to offer a ten-year period of market protection, which can be extended to eleven years on the basis of the authorization of one or more new therapeutic indications. A generic application can only be submit­ ted after eight years and the product can be approved for market­ ing after 10 years, or 11 years if, during the first eight years, the innovator obtains an authorisation for one or more new therapeu­ tic indications. The European Commission has proposed new regulations that will enhance protection for drugs with pediatric studies. The draft pediatric regulations provide for a six-months patent extension in the form of an extension to the supplementary protection certificate for eligible medicines, other than orphan medicines. For orphan medicines, an additional two-years of market exclusivity is added to the existing ten-years awarded under the EU orphan regulation. The regulations also provide for ten years of data protection for new pediatric studies on off-patent products.

In determining how best to clarify Canada's NAFTA and TRIPS commitments while also promoting innovation within Canada, these alternative approaches were considered.

Maintain the status quo

The first option considered was to leave the Regulations un­ changed. This was found to be an unacceptable option given the need to clarify and effectively implement the NAFTA and the TRIPS agreements while in turn, ensuring the protection offered in Canada was competitive with the protection offered in comparable jurisdictions.

Benefits Ilnd Costs

The go vernment bel ieves that these amendments, including changes resulting from stakeholders ' comments , will ach ieve a greater balance between the need for innovative dru gs and the need for competition in the marketplace in order to faci litate the accessibility of those drugs .

Introducing a sill-year no-filing period within the eight-year term of data protection will allow innovators to enjoy market exclusivity without the threat of any challenges that might be brought against them during that six-year period. During this pe­ riod, it is anticipated th~ innovator and generic litigation, and the cos ts associated with that litigation. wou ld decrease significantl y while providing increased predictability, a result which is desir­ able to stakeholders on both sides of the industry.

The in troduction of a register of innovative drugs \\'111 ensure that the operation of data protection will be fair and transparent The definition of "innovative drug" will prevent duplication (If data protection terms. Conversely, it will be clearer i1S to when a generic manufacturer will be subject to data protection. TIle clari­ fication of which types of studies will qualify an innovator com­ pa.ny for the pediatric extension. and the timing upon which such trial s must be submitted. will max imize the information received for the benefit of children. Finally, the goals of CAMR will not be hindered by the implementation of thes; amendments.

The net effect of the amendments to the data protection provi­ sions in these Regulations. concurrent with amendments to the PM(NOC) Regulations, will be to provide a balanced, stab le regime that encourages innovation while at the same time ensur­ ing Canad ians have access to affordable medicines. In addition to maintain predictability, the amendments also include a grand­ lathering provision, which provides that inno vator submissions which have received from Health Canada a notice of compliance prior to June 17, :2006, remain subject to the data protection pro­ vision as it was interpreted and applied prior to that date.

Consulunion

Pre-publication in the Canada Gazette , Part I, on June 17, 2006, was followed by a 30-da y consultati on period, during which time stakeholders were given the opportunity to provide comments on the proposed amendments to the Food and Drug Regulations (Data Protection} . Health Canada received repre sentations from approximatel y 43 sources Including inn ovator and generic manu­ facturers and the ir trade associations. biopharmaceurical manufac­ lllTCTS and their trade associations, members of par liament, uni­ versi ties, international pharmaceutical trade asso ciations, pro vin­ cial and territorial Min isters of Health, law firms and consumer groups. All of the stakeholder commentary was taken into consid­ erat ion by the government The amendments reflect the concern s and suggestions rece ived from the various stakeho lders . The fol­ lowing is a summary of the comments received from the stake­ ho lders during the 30-day con sultation period.

Proponents for the generi c drug indu stry contended that Canada' s existing data prot ection pro visions are in acco rdance wi th SAITA and TRIPS and that the pro posed changes exceed Canada 's commitments under int ernational trade agreements. and will result in the dela y of generic drug produ cts ente ring the Canadian marketplace leading to increasi ng health care costs for Canadian citizens. More spec ifically, the generic drug indus try raised objections to the S-year term and indicated that the pre.... posed regulations for data protection would impose a moratorium on generic approval for a period that is three years longer than is required under NAFT:\. and in other juris dictions, including the United States and Mexico. In the alternative, the generic drug industry recommended that, if there is to be a ban on competition. the start ing date should be the date either of first approval in Canada or in another jurisdiction, Some proponents indicated that data protection should apply only if the product is launched in Canada within 90 days from rece ipt of the Notice of Compliance. In addition. the generic dru g indus try contended that the defini­ tion of "i nnovative drug" should be amended to expressly exclude metabo lites and pro-drugs as many active metabolites are not covered by the words salt , este rs, enantiorners , sol vates or poly­ morphs. Further, the generic drug ind ustry object ed to the addi ­ tional six -month pediatric cxclusivuy period as. in their opinion, it will not encourage pediatric research or pediatric trials in Canada, but will prolong the brands ' monopolies ,

Proponents fOI the inno vative drug industry supported the eight -year term of data protection but urge d the go vernment to adopt a data protection peri od consistent with that of the Euro­ pean Union . TIle: innovativ e drug industry requested that the scope of data protection be expanded to includ e product varia­ tions that have different safety and efficacy profiles from the: original product. such as metabolites. cnnnriomers, salts and esters. In addition. they requested that the term of data protection be extended for new indications for previously approved com ­ pounds and on the sw itch of a product from prescription to non­ presc ription status, They also noted that the current language inadequa te ly reflects the intent o f pro vid ing protection to the original medicinal ingrediem, and all products incorporating that medi cinal ingred ient, includ ing combina tion products. different formulations and polymorphs, Further, the innov ative drug indus­ try, speci fica lly the biopharmaceutical manufacturers. raised the concern that the term "variation" may be broadly interpreted to exclude innovative products, such as biologics, because it is un­ clear whether a different product developed by a subsequent in­ novator for a similar, but not identical, ingredien t is cons idered a "variation" of the first product

The innovative drug industry further obj ect ed to the marketing requirement for the applicatio n of data protection and contended that it is'contrary to Canada ' s obliga tions under NAFT:\. and TRIPS. In the altcmauve, the)' not ed that. if the marketing requirement rem ains, greater cla rity on wha t " marketing" mea ns and how it will be applied is necessa ry, 'They also noted that there

is a lack of clarity as to some of the wording in the provisions regarding pediatric extension. They indicated that the pediatric extension could be inadvertently undermined by wording regard­ ing "supplements", requiring a "health benefit' and the ministe­ rial approval for protection in a timely manner. Furthermore, the innovative industry indicated that the new regulations should include a provision permitting an innovator to consent 10 early filing ofa submission by a subsequent manufacturer in addition to the pro vision permitting an innovator to consent to the early issu­ ance of a Notice of Compliance. Finall y, the innovative drug in­ dustry urged the Government to consider granring data protection to all products that receive No tices of Compliance after the date of pre-publication of the Canada Gazette, Part I. Some propo­ nents, such as the biopharrnaceutical manufacrurers, requested that the new data protection regulation s apply to data relating to products that have been marketed for less than eight years prior 10 the coming into force of the regulations for which there is no subsequent-entry manufacturers' submission filed prior 10 December 11,2004, the date the generic drug industry W,lS given notice of the proposed 8-year data protection term .

The provincial and territorial Ministers of Health recommend­ ed that the 30-00)' consultation period be extended an addition­ al 60 da ys \0 allow for dialogue between the key stakeholders, so as to garnet a better understanding of the impact of the proposed regulatory amendments. Specifically, the Ministers expressed concern that the proposed data protection regulations appear to impede access to non -patented medicines. Further consultations with provincial and territorial representative have since taken pL1Ce.

Complianc« and Enforcement

This amendment does not alter existing compliance mecha­ nisms under the prov isions of the Act and the regulations en­ forced by Health Canada inspectors,

Contact

OrnerBoudreau Director General Therapeunc Prod ucts Directorate Holland Cross Building, Tower B. lith Floor 1600 Scon Street Address Locator : 3 I06B Ottawa, Ontario KIA IBn Telephone: (613 ) 957-0369 FA.X: (613) 952-7756 E-mail: Proj 14lC @hc-sc .gc .ca