Court of Appeal confirms validity of the Data Protection Regulations

Publication | December 15, 2010


CaseApotex Inc. v Minister of Health; Cdn Generic Pharmaceutical Assn v. Minister of Health (Federal Court of Appeal)
Nature of CaseJudicial Review challenging vires of Data Protection Regulations
Successful partyMinister of Health
Date of decisionDecember 9, 2010


On December 9, 2010, the Federal Court of Appeal (FCA) dismissed two related appeals by Apotex Inc. and the Canadian Generic Pharmaceutical Association (CGPA) from a decision of Justice Mandamin and affirmed the validity and constitutionality of the Data Protection Regulations (DPR). Justice Mandamin's decision was reported in a previous Pharma In Brief.

Apotex and the CGPA sought a declaration that the DPR were ultra vires the constitutional authority of the federal government and were not properly enabled by the Food and Drugs Act. On appeal, two issues were considered: 1) are the DPR within the scope of the Governor in Council's delegated authority to make regulations that it “considers necessary” pursuant to s. 30(3) of the Food and Drugs Act?; and, if so, 2) are the DPR within the legislative competence of the federal government pursuant to s. 91 of the Constitution Act?

On the delegation issue, the FCA found no basis to depart from the established principle that Parliament has a broad power to delegate its legislative authority to the Governor in Council to make regulations that it “considers necessary”, subject to the scope of the enabling statute.

In respect of the enablement issue (i.e., whether the DPR are within the legislative authority of the Governor in Council), the appellants argued that there was no rational connection between the data submitted by innovators in their drug submissions and the type of data which the relevant provisions of NAFTA and TRIPS seek to protect. The FCA rejected this argument. The FCA held that the relevant provisions of NAFTA (article 1711) and TRIPS (paragraph 3 of article 39), which the DPR were enacted to implement, do not pertain to the protection of trade secrets. Rather, they constrain the use by generics of information created by innovators in relation to the approval of their “innovative drugs”. Accordingly, the DPR is in “clear accord” with the enabling provision in s. 30(3) of the Food and Drugs Act, which was enacted “to ensure that the data is protected against unfair commercial use.” The data protected by the DPR is “precisely the type of data” sought to be protected by the relevant NAFTA and TRIPS provisions. The FCA held that the filing of an abbreviated drug submission process involves, at the very least, indirect reliance on the safety and efficacy information derived from the innovator's drug submission.

On the constitutional issue, the FCA found that Justice Mandamin erred in his determination of the “pith and substance” of the DPR. Mandamin J found that the pith and substance was an exercise of the trade and commerce power of Parliament. The FCA held that Justice Mandamin erred in his determination that the DPR serves to balance the commercial interests of innovators and generic drug companies. Instead, the FCA stated that the purpose of the DPR is to “ensure that Canadians have reasonable access, at reasonable prices, to new, safe and effective drugs.” The FCA held that the DPR play an important role in encouraging research and development of new medicines and that Canadians can “only benefit from the discovery and development of new medicines after the information and data generated in extensive pre-clinical and clinical trials demonstrate the ‘innovative drug’s’ safety and efficacy to the satisfaction of the Minister.” The DPR is a mechanism “deemed necessary to balance the effects of the regulatory scheme set forth in the [Food and Drugs] Regulations, the purpose of which is to protect public health and safety.” In sum, the DPR are a valid exercise of the federal criminal law power under subsection 91(27) of the Constitution Act and are intra vires.

The Appellants may seek leave to appeal the FCA decision to the Supreme Court within 30 days of the final judgment.

Find a link to read the decision here.

PDF Version

Download Pharma in brief - Federal Court of Canada upholds data protection regulations (pdf 93kb)

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