Docket: T-823-15
Citation:
2015 FC 744
Ottawa, Ontario, June 12, 2015
PRESENT: The
Honourable Madam Justice Gagné
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BETWEEN:
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HORIZON PHARMA
PLC
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Applicant
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and
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THE MINISTER
OF HEALTH AND THE ATTORNEY GENERAL OF CANADA
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Respondents
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ORDER AND REASONS
[1]
Horizon Pharma plc brings an urgent motion,
dated May 20, 2015 and amended May 28, 2015, for an Order, pursuant to sections
18(1), 18.1 and 18.2 of the Federal Courts Act, RSC 1985, c F-7, staying
the issuance of a Notice of Compliance [NOC] for its own drug RAVICTI. The
applicant asserts that the Minister of Health [Minister] is poised to issue the
NOC as early as June 27, 2015 and thus seeks the stay pending judicial review of
the Minister’s decision to refuse data protection for RAVICTI.
[2]
The applicant argues that without a stay, it
will be left with no choice but to withdraw its New Drug Submissions [NDS] for
RAVICTI in order to prevent generic competitors to use the information therein
contained and enter the market immediately upon the expiry of its Canadian
Patent Number 2, 212, 047 [047 Patent], on February 6, 2016. As a consequence,
the applicant and Canadian patients will suffer irreparable harm.
[3]
The respondents take no position in this motion.
[4]
For the reasons discussed below I am of the view
the application should be granted.
I.
Background
[5]
The applicant is a specialty biopharmaceutical
company that markets a portfolio of products in arthritis, inflammation and
orphan diseases. It acquired and merged with Hyperion Therapeutics Inc.
[Hyperion] in May 2015. Hyperion was involved in a series of events leading to
the present motion.
[6]
Hyperion markets two drugs which became part of
the applicant’s orphan drug portfolio, BUPHENYL (sodium phenylbutyrate) and
RAVICTI (glycerol phenylbutyrate), both of which are used to treat Urea Cycle
Disorders [UCDs].
[7]
Neither product has yet received a NOC or any
form of data protection in Canada.
[8]
Only BUPHENYL, which is offered in tablet or
powder, has been available in Canada as part of Health Canada’s Health Access
Programme.
[9]
RAVICTI is an oral liquid and a clinical
improvement over BUPHENYL. It was only after the applicant has filed its Notice
of Application before the Court that it became aware that Patent 047 was found
to be eligible for listing on the Patent Register in Canada.
NDS for RAVICTI
[10]
On April 25, 2014, Hyperion filed its NDS for
RAVICTI. It also requested that RAVICTI be added to the Register of Innovative
Drugs on the basis that it qualified as an “innovative drug” pursuant to
section C.08.004.1 of the Food and Drug Regulations, CRC c 870 [Regulations].
A drug that satisfies the requirements and is added to the Register of
Innovative Drugs automatically enjoys data protection. Otherwise, the drug may
be copied immediately upon the issuance of a NOC as a result of the lack of
data protection.
Initial Denial of Data Protection for RAVICTI
[11]
On May 26, 2014, the Office of Patented Medicines
Liaison [OPML] advised Hyperion of its preliminary position that RAVICTI was
not an “innovative drug”. However, after ongoing
discussion and further submissions by the applicant, the OPML reversed its
prior position and advised Hyperion that RAVICTI was eligible for data
protection, subject to a final review of NOC issues.
Notice of Deficiency
[12]
On November 13, 2014, Hyperion was notified that
it failed to include the results of a drug-drug interaction study referenced in
the NDS. It was also advised that its NDS would be placed at the back of the
queue and that the approval clock would be re-set for 6 months.
The Generic Competitor and PHEBURANE
[13]
Meanwhile, Medunik Canada, a generic competitor,
received a NOC, pursuant to section C.08.002 of the Regulations for its PHEBURANE
(sodium phenylbutyrate), a generic copy of BUPHENYL®. The applicant asserts
Medunik was permitted to receive a NOC relying on data from Hyperion’s European
reference product AMMONAPS (BUPHENYL) and its market experience over the past
10 years.
[14]
Medunik Canada had submitted its NDS after
Hyperion in June 2014.
Decision Leading to Judicial Review
[15]
On May 1, 2015 and after consultation and
consideration of submissions, the OPML refused to add RAVICTI on the Register
of Innovative Drugs and found that it was not eligible for data protection [Data
Protection Decision]. Hyperion was advised that RAVICTI was not eligible
because it was considered an ester variation of PHEBURANE (sodium
phenylbutyrate) and that in the alternative it was “a
second minor variation” of phenylbutyric acid, which was approved in
PHEBURANE as a sodium salt. Given that PHEBURANE was approved prior to RAVICTI,
the OPML was of the view that RAVICTI could no longer be considered as an “innovative drug” under the Regulations.
[16]
On May 20, 2015 the applicant filed a Notice of
Application for judicial review of the Data Protection Decision.
II.
Issues
[17]
The sole issue raised by the applicant’s motion
is:
•
Whether this Court should stay the Minister’s
decision to issue a NOC for RAVICTI pending the judicial review of the Data
Protection Decision.
III.
Analysis
[18]
The applicant argues that a stay is necessary and
appropriate and that this case satisfies the criteria for granting a stay (RJR-MacDonald
Inc v Canada (Attorney General), [1994] 1 S.C.R. 311 [RJR-MacDonald
Inc]; Jamieson Laboratories Ltd v Reckitt Benckiser LLC et al, 2015
FCA 104 at para 22 [Jamieson Laboratories Ltd]):
(i)
it presents a serious issue to be tried;
(ii)
the applicant and Canadian patients will suffer
irreparable harm if no stay is granted; and
(iii)
the balance of convenience favours the requested
relief.
[19]
The test for granting a stay is conjunctive and
each factor needs to be assessed.
Serious issue to be tried
[20]
The applicant argues that in the present case,
an incorrect, unreasonable and inconsistent interpretation of the Regulations
is a serious issue to be tried. It is of the view that:
−
The Minister incorrectly found RAVICTI to be an
ester variation of sodium phenylbutyrate;
−
The Minister’s “second minor variation” argument
is an error of law;
−
The Minister erred in ignoring the significant
and substantial data of the RAVICTI NDS;
−
Denying RAVICTI data protection is inconsistent
with the policy behind data protection;
−
The Minister capriciously and inconsistently applied
the data protection regulations.
[21]
As has been held repeatedly, the threshold that
the applicant must meet in establishing a serious issue, in most circumstances,
is a low one; unless it can be shown that the arguments put forth are frivolous
or vexatious, a serious issue will be made out. As has been held recently, this
question must be answered on the basis of no more than an “extremely limited review of the case” (Jamieson
Laboratories Ltd, at paras 21-26). Without deciding the merits of the
judicial review of the Data Protection Decision, I am satisfied that in the
present case there is a “serious issue” of potential errors committed by the
Minister, such as, for example, in connection to interpreting and applying the
definition of “variation” within the meaning of
subsection C.08.004.1(1) of the Regulations and/or on classic
administrative law principles. The applicant has offered the Affidavit of Dr.
Bruce Scharschmidt in support of its motion; Dr. Scharschmidt now serves as a
consultant for the applicant and had served as Senior Vice President and Chief
Medical & Development Officer at Hyperion. Dr. Scharschmidt discusses Health
Canada’s initial denial of data protection and subsequent reversal. It seems
that Health Canada essentially agreed with the submissions and would have
afforded RAVICTI data protection but for the delay and subsequent result—which
was that Medunik got its NOC first. He goes on to discuss the analogous case of
AVAMYS, for the proposition that two separate variations of the same medical
ingredient have received data protection, as long as the medical ingredient
itself has not been previously approved. This, for example, raises a question
of interpretation or application of “variation” in
subsection C.08.004.1(1) of the Regulations.
[22]
I am of the view that the first part of the test
is met and that the applicant has shown a serious issue to be tried.
Irreparable Harm
[23]
Turning to irreparable harm, on the basis of the
affidavit evidence submitted, it must be shown that the applicant will suffer
incalculable and non-compensable losses should it not succeed in its judicial
review application. The evidence adduced must be clear and not speculative (T.W.U.
v Canadian Industrial Relations Board, 2005 FCA 83 at para 8).
[24]
The applicant argues that it, and the public,
will suffer irreparable harm if the stay is not granted: it will have to
withdraw from the Canadian marketplace and suffer non-compensable losses, while
irreparably harming patients.
A.
Non-compensable losses
[25]
The applicant argues the evidence adduced is
clear: it will not be able to market RAVICTI in Canada and will simply have no recourse
to seek compensation for lost profits. As the applicant is not yet in the
marketplace, the Court can draw inferences that logically there can be no
evidence of harm that has already occurred (Ciba-Geigy Canada Ltd v
Novopharm Ltd, [1994] FCJ No 1120). While it is the applicant making the
decision to withdraw its NDS, it is submitted that Health Canada’s actions of
failing to properly consider data protection prior to the issuance of an NOC is
the cause giving rise to the harm.
[26]
Before the merger, Hyperion consistently told
Health Canada that it would have to withdraw its NDS for RAVICTI because
without data protection, it cannot recoup the investments needed to offer
RAVICTI for sale on the Canadian marketplace. That is, the brief market
exclusivity period of time enjoyed in the event of an issued NOC without data
protection would fall short of enabling the applicant to come close to
recouping these investments.
[27]
The applicant claims that this assertion does
not change in view of the fact that RAVICTI is eligible for listing on the
Patent Register. It argues that the Patented Medicine (Notice of Compliance)
Regulations, SOR/93-133 can only prevent generic competition until February
6, 2016 when the 047 Patent expires. This brief period of exclusivity is not
long enough to recoup substantial investments – it is roughly equivalent to six
months – Health Canada’s target period of exclusivity for generic drug
submissions.
[28]
In his affidavit, Dr. Scharschmidt refers to the
extensive clinical studies taken in developing RAVICTI, since approximately
2006, which was included in the data package that formed part of the RAVICTI
NDS. It further specifies at paragraph 20, “these
clinical trials included a Canadian site at the University of Toronto and
required substantial investment in Canada from Hyperion.”
[29]
As the applicant could not recoup its investment
and would have no recourse or means to be compensate in respect of lost sales,
I am satisfied that the applicant would suffer irreparable harm if a stay is
not granted and that the second part of the test is met, at least as regard the
applicant.
B.
Harm to patients
[30]
The applicant further argues that the Court
should also consider irreparable harm that the Canadian patients would suffer.
It contends that, if it does not enter the Canadian market, Canadian patients
suffering from UCDs will not have access to RAVICTI, which is significantly
superior to other drugs on the market. The public will be denied a
life-changing and life-saving drug - significant in light of Health Canada’s
refusal to accept requests for RAVICTI by way of its Health Access Programme.
[31]
The applicant admits that typically the moving
party is to be the focus of the irreparable harm inquiry while it is more
appropriate to consider third parties when assessing the balance of convenience
(RJR-MacDonald Inc, at para 342). However, according to the applicant
the “issue remains an open one” (Janssen Inc v
AbbVie Corporation, 2014 FCA 112 at para 35 [Janssen]; Edmonton
Northlands v Edmonton Oilers Hockey Club, [1993] AJ No 1001). The applicant
argues that this Court should consider the impact on third parties in failing
to grant a stay, because of the “unique circumstances”
of this motion.
[32]
Thus, the question is whether it would be
appropriate to consider the submission, in light of the following passages from
Stratas J in Janssen, wherein Janssen brought a motion for a stay of the
remedy phase of the trial, pending two appeals to the Federal Court of Appeal
and an upcoming trial on injunctive relief:
33. In its submissions on irreparable
harm, Janssen emphasized the suffering of patients who will not be able to use
its medication, Stelara. But at present, patients can still use Stelara. That
may change depending on how the Federal Court determines the issue of
injunction.
34. The Federal Court might grant an
injunction on terms that protect patients. It might grant an injunction on
other terms that reduce or eliminate the harm to patients or, for that matter,
other harms that Janssen could suffer. Or it might not grant the injunction at
all. Right now, any harm to patients, or for that matter to Janssen, is
speculative and hypothetical.
35. On the issue of harm to patients,
AbbVie submits that the only admissible irreparable harm is that suffered by
the moving party: see, e.g., Manitoba (Attorney General) v. Metropolitan
Stores (MTS) Ltd., [1987] 1 S.C.R. 110 at page 128. Janssen disagrees and
submits that such harm is admissible because the patients are dependent upon
it, the moving party: see, e.g., Holy Alpha and Omega Church of Toronto v.
Attorney General of Canada, 2009 FCA 265 at paragraph 17; Glooscap
Heritage Society, supra at paragraph 34. Given my comments, above, I need
not resolve this issue.
[33]
Stratas J leaves the question open. However if
it were to be answered in favour of considering the harm on patients that
depend on the applicant, it could be said that the facts of this case differ
from those in Janssen. In the present case, the harm to the patients
would not be speculative or hypothetical: the applicant has unequivocally
asserted that it would withdraw its NDS should it be denied data protection and
the evidence presented shows, at least prima facie, that RAVICTI is a clinical
improvement over BUPHENYL and thus PHEBURANE.
[34]
However, as I found that the applicant would
suffer irreparable harm if no stay is granted, I will leave the impact on the
Canadian patients to the analysis of the balance of convenience.
Balance of Convenience
[35]
The applicant submits the balance of convenience
favours maintaining the status quo.
[36]
In considering which of the two parties would
suffer greater harm, the applicant submits failure to grant a stay would cause
the applicant infinitely greater harm than granting a stay would cause to the
Minister. There is no harm in maintaining the status quo—that is simply being
required to delay the issuance of the NOC.
[37]
In determining where the balance lies, I find
there is a compelling public interest in granting the stay, an important
factor: Canadian patients with UCDs will have access to what could be a
life-saving drug. The Supreme Court of Canada has held that public interest
includes both the concerns of society generally and the particular interests of
identifiable groups (RJR-MacDonald Inc, at paras 343-344).
[38]
In my view, given that the respondents take no
position in this matter, it is an indicator that there is no harm in staying
the issuance of the NOC for RAVICTI, which is the applicant’s own drug.
IV.
Conclusion
[39]
For the foregoing reasons, I would order a stay
of the Minister’s issuance of the NOC for RAVICTI, pending the disposition of
the application for judicial review of the Data Protection Decision.
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