Date: 20110120
Docket: T-1422-09
Citation: 2011 FC 74
Toronto, Ontario, January 20,
2011
PRESENT: Kevin R. Aalto, Esquire, Case Management Judge
BETWEEN:
|
|
PFIZER CANADA INC.,
WARNER-LAMBERT COMPANY AND
WARNER-LAMBERT COMPANY LLC
|
|
|
|
Applicants
|
|
and
|
|
|
RATIOPHARM INC. AND
THE MINISTER OF HEALTH
|
|
|
|
Respondents
|
|
|
|
|
REASONS FOR ORDER AND ORDER
[1]
It is well
settled law that a generic drug manufacturer cannot have two Notices of Allegation
(NOA) for the same drug which are substantially identical. This case raises a
novel question concerning the Patented Medicines (Notice of Compliance)
Regulations (the Regulations). Two different generic drug manufacturers served NOAs
regarding the same drug. Subsequently, both of the generic drug companies
amalgamated with a third drug company under the name of which they all now
carry on business. Is it an abuse of process and contrary to the Regulations
to permit the new amalgamated corporation to maintain both NOAs? That is the
question for determination in this motion.
Facts
[2]
On May 1,
2009, ratiopharm filed an Abbreviated New Drug Submission (ANDS) with Health Canada seeking the issuance of a
Notice of Compliance (NOC) for its pregabalin drug product. On September 18,
2009 Novopharm Inc. (Novopharm) filed an ANDS with Health Canada seeking the issuance of an
NOC for its pregabalin drug product.
[3]
At the
time ratiopharm`s NOA and Novopharm`s NOA were served, both ratiopharm and
Novopharm were separate and distinct companies. Both companies retained
separate counsel to assist in preparation of their NOA`s. ratiopharm and
Novopharm acted independently. They rely upon different experts in support of
their allegations in their respective NOAs.
[4]
In
response to the NOA from ratiopharm, the Applicants (Pfizer) commenced this
proceeding on August 26, 2009. Subsequently, on November 13, 2009 Pfizer
commenced a Notice of Application being Court File No. T-1868-09 in respect of
the Novopharm NOA in which an order was sought prohibiting the Minister of
Health from issuing an NOC for the Novopharm pregabalin product (the Novopharm
Proceeding). Both this proceeding and the Novopharm Proceeding continue to be
litigated in the ordinary course including the service of their respective
experts’ evidence. ratiopharm served its evidence utilizing experts that are
different from the experts relied upon by Novopharm in the Novopharm
Proceeding. Further, the ratiopharm pregabalin product and the Novopharm
pregabalin product are apparently different pharmaceutical formulations.
Certain of the excipients in the two formulations are different and apparently
where the same excipients are present, the amounts used are different. This
applies not only to the compositions of the powder blends, but also the
compositions of the hard gelatine capsule into which the powder blends are
filled. The manufacturer for each of the ratiopharm pregabalin product and the
Novopharm pregabalin product are different. Because ratiopharm and Novopharm
were independently seeking approval of different formulations, they were
required by the Regulations to submit separate ANDS and to serve separate
NOAs.
[5]
On March
18, 2010 counsel for Novopharm in the Novopharm Proceeding advised Pfizer that
Novopharm Limited had changed its name to Teva Canada Limited. Counsel to Novopharm
provided an affidavit to Pfizer attaching the Certificate and Articles of Amendment
and advised that “[T]he certificate confirmed that only the name of the
corporation has changed. The legal entity remains the same. There has been no
assignment, transmission, or devolution of interest or liability”.
[6]
Further,
counsel to Novopharm advised that the Novopharm drug submission would be
updated over a period of time to reflect the name change and that Novopharm
“will be seeking to amend the title of proceedings on consent to reflect the
name change at the appropriate time. The amended title of proceedings will
substitute ‘Teva Canada Limited’ in place of ‘Novopharm Limited’”.
[7]
Thereafter,
ratiopharm amalgamated with Teva Canada Limited (Teva). In August, 2010,
counsel to ratiopharm in this proceeding advised Pfizer of the amalgamation of
ratiopharm and Teva. ratiopharm’s counsel advised Pfizer that “[A]s a result
of the amalgamation, ratiopharm Inc. will henceforth conduct business under the
name ‘Teva Canada Limited’”. ratiopharm’s counsel sought Pfizer’s consent to
amend the title of proceedings herein to “Pfizer Canada Inc. v. Teva
Canada Limited” and also sought Pfizer’s consent to add Novopharm’s counsel
to the Protective Order in this proceeding on the basis that Novopharm’s
counsel is also counsel to Teva Canada.
[8]
Thus, both
ratiopharm and Novopharm now carry on business under the name Teva and the
litigation strategy in both this proceeding and the Novopharm Proceeding is
directed by the Director, Intellectual Property of Teva.
Issues
[9]
These
novel facts raise a number of issues. First, is it an abuse of process for
Teva to effectively have two NOAs outstanding simultaneous relating to the same
drug? If it is an abuse of process is the appropriate remedy that this
proceeding be stayed and an order be made indefinitely extending the 24-months
statutory stay under the Regulations?
Discussion
[10]
Pfizer
argues that as a generic manufacturer is not permitted to maintain two NOAs for
substantially the same drug this application must be stayed in favour of the
“first” proceeding involving the drug. The “first” application according to
Pfizer’s ingenious argument is the one commenced by Novopharm.
[11]
Pfizer
argues that as the amalgamation between ratiopharm and Teva was subsequent in
time to the amalgamation of Novopharm and Teva, this proceeding is therefore
the second proceeding of Teva involving pregabalin. From a policy perspective,
Pfizer’s position is that by allowing this proceeding to continue relating to
the same issues and patents the principles of judicial economy, consistency,
finality and the integrity of the administration of justice are violated. All
of this taken together equals an abuse of process that compels the staying of
this proceeding in favour of the Novopharm Proceeding some six months after the
ratiopharm hearing is to be held. Thus, in Pfizer’s submission there is no
prejudice to the amalgamated Teva save and except a further six month wait.
[12]
Pfizer
also points out that the Novopharm Proceeding raises not only the identical
allegations raised by ratiopharm (non-infringement, invalidity, obviousness
etc.) but also adds the allegation of insufficient disclosure. On cross-examination,
General Counsel for Teva took the position that the Novopharm NOA was better
than the ratiopharm NOA. Be that as it may it is not determinative of the
matter. While it may be better drafted or more comprehensive, if the two NOAs
are for different formulations and different excipients then there is no automatic
result in one proceeding being stayed and no reason why the two proceedings
cannot continue.
[13]
This
proceeding is the result of ratiopharm exercising its right to enter the marketplace
with its generic version of pregabalin. Novopharm did the same for its own
formulation. Their amalgamation with Teva has had the unintended result of
Teva being involved in two proceedings involving this drug. As counsel for
Pfizer so felicitously phrased it “their common ownership is the happy but
unintended consequence of a commercial marriage”.
[14]
However,
that does not necessarily result in this proceeding being an abuse of process.
Pfizer argues that the doctrine of abuse of process engages the inherent power
of the Court to control its own process and prevent misuse of that process
which otherwise would bring the administration of justice into disrepute.
There is no doubt that the Court does have such a power. The question is
whether the facts of this case and the scheme of the Regulations mandate the
Court exercising its discretion to effectively permanently stay this proceeding
in favour of the Novopharm proceeding on the basis of abuse of process.
[15]
Pfizer
points to a number of cases to support its position that this application
should be stayed as an abuse of process. First, in AB Hassle v. Canada (Minister
of National Health and Welfare) (1997), 71 C.P.R. (3d) 129, the Court was
asked to declare a second or further NOA delivered by a generic manufacturer to
be void and of no effect or alternatively staying the proceedings until after
final disposition of prior proceedings involving an NOA by the same generic
manufacturer. The motion was dismissed. It was held that a stay of proceedings
was warranted only if the usual tests were met and as the NOA was a document
filed with the Minister, the Court did not have jurisdiction to declare it void
and of no effect. In coming to this conclusion the Court observed at p. 137:
The Regulations are silent about
whether more than one notice of allegation may be given by a generic producer
seeking to compare its drug with one already approved for sale in Canada under
an NOC. . . More than one allegation is contemplated by s-s 6(2) which directs
the Court, on application by the first person, holding an NOC, for an order
prohibiting issue of a second NOC, “to make an order in respect of a patent
that is the subject of one or more allegations if it finds that none of those
allegations is justified”. Yet that subsection does not specify whether more
than one notice of allegation may be swerved or whether, as the applicants here
would have it, all allegations, one or more, of the second applicant for an
NOC, are to be made at the same time in one notice of allegation.
[16]
In
essence, as an NOA is not a document submitted to the Court, the Court should
not strike it out (see also, Pharmacia Inc. v. Canada (Minister of National Health
and Welfare)
(1994), 58 C.P.R. (3d) 307 (F.C.A.) per Stone J.A. at p. 209). However, in
this case the issue does not relate to an NOA per se but to staying as
an abuse of process a notice of application for prohibition which was properly
brought on the basis of an NOA which was properly served pursuant to the
Regulations.
[17]
There is
clear authority for the proposition that a second NOA which is in all
material respects similar to a prior NOA served by the same generic in an
earlier proceeding may be found to be an abuse of process because it would lead
to an inefficient use of judicial resources, undermine the integrity of the
justice system and threaten the principle of finality (see Sanofi-Aventis
Canada Inc. v. Novopharm Ltd (2007), 59 C.P.R. (4th) 416
(F.C.A.)). In that case, the proceeding was dismissed on the ground that the innovator
had lost a previous prohibition proceeding against a different generic on the
basis of sound prediction being the same allegation made in this proceeding
which was dismissed. The second application by the innovator was found to
amount to an abuse of process because it would lead to an inefficient use of
judicial resources, undermine the integrity of the justice system and threaten
the principle of finality. The Federal Court of Appeal held that at p. 444
that:
All parties are held to the same standard:
they must each put forward their entire case, complete with all relevant
evidence at first instance. The innovator is prevented from re-litigating an
issue already decided in a proceeding to which it was a party with the aid of
additional evidence it chose not to adduce in the earlier proceedings.
Generics likewise must put forward their full case at the first opportunity.
Multiple NOAs issued by the same generic relating to a particular drug and
alleging invalidity of a particular patent will generally not be permitted,
even if different grounds for establishing invalidity are put forward in each.
However, where one generic has made an allegation but has failed to put forward
the requisite evidence and argument to illustrate the allegation is justified,
it would be unjust to preclude a subsequent generic, who is apprised of better
evidence or a more appropriate legal argument, from introducing it. Although
this situation may give rise to the possibility of an inconsistent result, this
concern is overridden by the potential for unfairness to the generic that is
barred from bringing forward its case simply because another generic’s approach
was inadequate. In each situation, it is necessary to balance the effect of a
proceeding on the administration of justice against the unfairness to a party
from precluding it from forward its case.
[18]
While the
case indicates that the doctrine of abuse of process can be utilized to dismiss
an application, it is only on the basis that a prior application was dismissed
on grounds substantially similar to those in issue in the second proceeding.
Such is not the case here. The NOA served by ratiopharm is not in
chronological time a “second” NOA by the same generic nor is there a case which
has been determined on the very allegations raised in the ratiopharm NOA.
These arguments by Pfizer regarding abuse of process may very well have greater
success in connection with the Novopharm Proceeding once this ratiopharm
proceeding has been disposed of. However, in my view the NOA issued by
ratiopharm which has resulted in this proceeding does not fall within the abuse
of process basket.
[19]
There is
no disagreement with Pfizer’s argument that the regime established by the
Regulations mandates and encourages the efficient use of judicial resources and
discourages repetitious litigation where substantially similar allegations have
been disposed of by the Court in prior proceedings. However, in this case no
disposition has yet been made by the Court on any of the allegations in
ratiopharm’s NOA.
[20]
The Federal
Court of Appeal gave further consideration to the doctrines of issue estoppel
and abuse of process in the context of the Regulations in Pharmascience Inc.
v. The Minister of Health and Abbott Laboratories et al. 2007 FCA 140.
That case was an appeal from an order dismissing an application under the
Regulations on the basis of issue estoppel. It was held that Pharmascience
could not attempt to litigate additional questions which it failed to raise in
prior litigation involving the same parties and same patent. The appeal was
dismissed. In the course of its reasons, the Federal Court of Appeal noted as
follows:
What the NOC Regulations require
the second person to establish is, inter alia, that the patent is invalid
or that it would not be infringed. In other words, the “issue” to be addressed
is invalidity or non-infringement. The specific grounds on which the second
person wishes to demonstrate invalidity, whether that be by obviousness,
anticipation, overbreadth or lack of sound prediction, do not constitute
separate issues for the purpose of issue estoppel but are merely different
bases on which the second person may address the issue of invalidity.
Consequently, multiple NOAs from the same generic relating to a particular
pharmaceutical and alleging invalidity of a particular patent will generally
not be permitted, even if different grounds for establishing invalidity are
put forward in each. As a majority of this Court identified in P & G
at paragraph 22, an exception to the application of this rule might be made in
cases where facts material to the issue could not have been discovered with
reasonable diligence at the time of the first litigation. No such exception
applies in the present case, however, Pharmascience does not deny that it could
have raised additional grounds of invalidity in the first NOA, but merely
contends that splitting its claims is permissible within the scheme of the
regulations. [emphasis added]
[21]
The
Federal Court of Appeal disagreed with the position of Pharmascience and
concluded that “multiple NOAs alleging invalidity will generally not be
permitted.” The Court concluded that this approach is consistent with the
jurisprudence and cited, inter alia, Madame Justice Carolyn Layden-Stevenson
(as she then was) in AB Hassle v. Apotex Inc. et al. (2005), 38 C.P.R.
(4th) 216 (F.C.), aff’d 2006 FCA at paras 73 and 76 wherein Justice
Layden-Stevenson observed:
The general rule, stated in P &G,
supra, is that a party in one proceeding is estopped from raising an issue
that it could and should have raised in a previous proceeding between the
parties. Although this form of estoppel is of the weaker variety, when the
conditions are met, it is a matter of discretion as to whether the party should
be estopped . . .
. . .
As I understand it, the jurisprudence
holds that a subsequent NOA is permissible when a previous NOA has been
withdrawn due to difficulties in meeting regulatory requirements or where
the subsequent NOA is separate and distinct from the previous one (such as a
new formulation) or where a procedural defect with respect to the previous
NOA opens the door for the transmission of a subsequent NOA. [emphasis added]
[22]
It is
therefore not axiomatic that two NOAs for the same drug by the same generic
will necessarily result in a finding of abuse of process. Thus, on the unique
facts of this case, it is apparent the ratiopharm NOA and the Novopharm NOA are
separate and distinct and, as is alleged, they each rely on different
formulations and excipients. They also rely on different evidence. Clearly,
when they were drafted they were entirely separate and distinct and the fact of
amalgamation does not change that fact.
[23]
Thus, in
my view, based on a consideration of all of these authorities, the very helpful
submissions of counsel, and a consideration of the legal effects of an
amalgamation, this application is not an abuse of process and should not be
stayed (even if it could be stayed, as discussed below).
Amalgamation Issue
[24]
The unique
facts in this case also raise a further issue concerning the application of the
Canada Business Corporations Act (CBCA) which, in section 186, sets out
the effect of an amalgamation as follows:
On the date shown in a certificate of
amalgamation
(a)
the amalgamation
of the amalgamating corporations and their continuance as one corporation
becomes effective;
(b)
the
property of each amalgamating corporation continues to be the property of the
amalgamated corporations;
(c)
the
amalgamated corporation continues to be liable for the obligations of each
amalgamating corporation;
(d)
an
existing cause of action, claim or liability to prosecution is unaffected;
(e)
a civil,
criminal or administrative action or proceeding pending by or against an
amalgamating corporation may be continued to be prosecuted by or against the
amalgamated corporation;
(f)
a
conviction against, or ruling, order or judgment in favour of or against, an
amalgamating corporation may be enforced by or against the amalgamated
corporation; and
(g)
the
articles of amalgamation are deemed to be the articles of incorporation of the
amalgamated corporation and the certificate of amalgamation is deemed to be the
certificate of incorporation of the amalgamated corporation.
[25]
Notably,
sub-section (c) provides that “a civil, criminal or administrative action or
proceeding pending” may continue to be prosecuted. Further, in sub-section (d)
an “existing cause of action, claim or liability to prosecution” remains
“unaffected”.
[26]
ratiopharm
argues that in light of the provisions of section 186 this proceeding is
statutorily permitted to continue. The delivery of an NOA is a step in an
administrative proceeding involving the regulation of drugs and the process
whereby generic drug companies obtain a required Notice of Compliance.
[27]
This
proceeding was commenced prior to amalgamation and therefore s. 186 should
apply to permit the proceeding to continue. Pfizer argues that it is not the
intention of s. 186 to oust the Court’s discretion to dismiss a proceeding for
abuse of process where the circumstances require such a remedy. While the
Court retains discretion to control its process and stay or dismiss actions
that warrant it, the circumstances must compel a finding that the proceeding is
an abuse of process. Thus, while s. 186 does not oust the jurisdiction of the
Court to control its own process by applying the abuse of process doctrine it
provides support for the proposition that the NOA of ratiopharm is not an abuse
of process under the regulatory scheme of the Regulations. It is therefore another
factor which has been considered in exercising the discretion of the Court not
to declare the ratiopharm NOA, now meaning the Teva NOA, which gives rise to
this proceeding, an abuse of process.
Staying this Proceeding
[28]
Pfizer
argues that if it is determined that this proceeding is an abuse of process
then the Court should stay this proceeding indefinitely. Even if it were found
to be an abuse of process it is doubtful the proceeding could be stayed absent
the requirements of the Regulations being met. The Regulations provide in s.
7(5)(b) that the Court may extend the 24-month statutory stay granted under
section 7(1). However, the stay may be extended in only two circumstances: 1)
where the parties consent; or, 2) if the Court finds that one party has failed
to reasonably co-operate in expediting the proceeding. None of these
circumstances apply here. The parties do not consent and there has been no
failure by the parties to move the matter forward. Indeed, a hearing date is
imminent in March, 2011. Pfizer did not, and in this case managed case, could
not put forward evidence to satisfy the second part of the statutory
requirement.
[29]
Thus, this
is not a case where the Court could extend the stay. While the Court has inherent
jurisdiction to control its own process which would extend to issuing stays in
appropriate cases, in the face of a clear statutory admonition that the stay
can be extended on only two specific grounds, it is questionable whether such a
remedy could be granted. As noted by Justice Mackay in AB Hassle v. Canada (Minister of Health), supra, at p. 134 as
follows:
In the alternative, the applicants seek
an order staying these proceedings until final disposition of the appeal
proceedings, A-394-96 and A-398-96, initiated following the first round of
proceedings, with an extension of the time provided by paragraph 7(1)(e) of the
Regulations for the Minister to refuse issue of an NOC, for a period
equal to the stay. Even if I were so disposed, I am not sure that s-s 7(5)
would here be applicable for there is no evidence before me that a party to
this application failed to cooperate reasonably in expediting the application,
the statutory ground upon which the Court may extend the time. [emphasis
added]
[30]
Thus, on
the basis of the provisions of the Regulations the granting of a stay is severely
circumscribed. To use Justice Mackay’s approach, even if the Court were to
conclude that this proceeding was based on an NOA which was a “second” NOA by
the same generic and finding it raised substantially similar allegations based
on substantially similar formulations and excipients, the Court’s ability to
extend the stay, without evidence meeting the statutory requirements of the
Regulations, is doubtful.
Conclusion
[31]
Thus, in
considering all of these matters and the unusual sequence of events giving rise
to the arguments on this motion, it must be dismissed. The disposition of
costs was not reviewed at the hearing. The parties therefore, if they are
unable to agree on costs, may make brief written submissions not exceeding
three pages. The moving party shall submit their submissions within 15 days
and the responding party shall submit theirs within 10 days thereafter.
Email this Content