Federal Court of Appeal Affirms Minister’s Decision that CSP Eligibility Requires Claim for Active Ingredients and Excludes Formulations Claims
May 4, 2021
By Andrew McIntosh and Bruna Kalinoski
The Federal Court of Appeal (“FCA”) recently released its first decision on a judicial review challenge against the Minister of Health’s (the “Minister”) interpretation of the terms “medicinal ingredient” and “a claim for the medicinal ingredient or combination of all the medicinal ingredients” in subsection 3(2) Certificate of Supplementary Protection Regulations, SOR/2017-165 (the “CSP Regulations”).
In Canada (Health) v. Glaxosmithkline Biologicals S.A., 2020 FC 397, rev’d 2021 FCA 71 (“Glaxosmithkline”), the Minister decided that Glaxosmithkline Biologicals S.A.’s (“GSK”) Canadian Patent No. 2,600,905 (the “905 Patent”) relating to the shingles vaccine SHRINGRIX® did not meet the “medicinal ingredient” eligibility requirement in the CSP Regulations. The 905 Patent’s claims were all directed to a formulation containing the vaccine’s antigen, and an adjuvant. The Minister held that adjuvants, even those with biological activity, are not “medicinal ingredients” within the meaning of the legislation. As GSK’s patent did not include a claim for the antigen alone, she refused to issue a Certificate of Supplementary Protection (“CSP”) to GSK. The Federal Court overturned the Minister’s decision, finding it was unreasonable. The Minister appealed. The FCA allowed the appeal, finding the Minister’s decision was reasonable.
Background on CSPs
The CSP Regulations and corresponding amendments to the Patent Act, R.S.C. 1985, c.P-4 (the “Patent Act”) followed as a consequence of Canada’s commitment to the Canada-European Union Comprehensive Economic and Trade Agreement (“CETA”). Part of that agreement required Canada to implement a CSP regime permitting patent holders to receive up to two years of additional patent protection for approved medicines, to compensate them for time spent in research and development of drugs containing patented medicinal ingredients, and for regulatory delays in obtaining marketing approval.
To be CSP eligible, a patent must meet a number of requirements, including that it “pertains in the prescribed manner to a medicinal ingredient, or combination of medicinal ingredients”.1 The CSP Regulations2 prescribe that a patent may pertain to a medicinal ingredient or combination of medicinal ingredients contained in an approved medicine by having: (a) a claim to a medicinal ingredient or combination of medicinal ingredients contained in a drug (product claim); (b) a claim to the medicinal ingredient or combination of medicinal ingredients as obtained by a specified process (product-by-process claim); or (c) a claim for a use of the medicinal ingredient or combination of medicinal ingredients (new use). However, none of the Patent Act, or any regulations issued under it, defines “medicinal ingredient”, despite frequent use in the legislation.
The Patent at issue and the Minister’s decision
As discussed in our previous article here in relation to the Federal Court (“FC”) decision, the 905 Patent claimed an immunogenic composition comprising the antigen for the shingles virus in combination with a particular adjuvant that facilitates a clinically desirable immune response in the body (claim 4), uses of said composition (claims 1-3), and the composition components (claim 5). All five claims required the presence of the antigen and adjuvant. According to the description in the 905 Patent, neither the antigen nor the adjuvant described in claim 4 were meant to work alone. The antigen would not have a clinically desirable effect without the adjuvant, and the adjuvant was effectively a booster of the antigen function. The antigen is listed as the sole medicinal ingredient for SHINGRIX® on the register of innovative drugs.
The Minister held that the 905 Patent did not include a claim for the approved medicinal ingredient (i.e., the antigen) contained in the drug SHINGRIX®. Rather, the claims were directed at an immunogenic composition (i.e., a formulation) comprising medicinal and non-medicinal ingredients. The Minister also noted that the gE antigen was known (subject of two prior patents), and the adjuvants, although biologically active, were not “medicinal ingredients” eligible for supplementary protection within the meaning of the CSP regime.
The decision under appeal
At first instance, the FC (Barnes J.) held that, under the Vavilov standard of review framework, the Minister’s decision was unreasonable because she failed to take appropriate account of Canada’s obligations under CETA (pursuant to which the CSP regime was enacted) in considering the meaning of “medicinal ingredient” in the CSP Regulations and the amendments to the Patent Act. The Court held that the Minister had taken too strict a view in construing the CSP regime to extend patent protection only if the claimed medicinal ingredient was an active ingredient. He also commented that the Minister’s interpretation excluding formulation claims from CSP protection was difficult to justify. He noted that “active ingredient” should be viewed to include adjuvants because their biological activity was necessary to trigger the desired immune response and efficacy of the vaccine. The Court reached this interpretation despite GSK focusing its submissions exclusively on the argument that the Minister’s interpretation of “medicinal ingredient” did not accord with the judicial definition adopted under the PM(NOC) Regulations. In the end, the Court agreed with GSK and remitted the case back to the Minister for reconsideration.
The FCA decision
The FCA overturned the FC decision, holding that the Minister’s interpretation was reasonable, and accorded with the specific intention of CETA, the purpose of the CSP Regulations and the amendments to the Patent Act.
a) Canada’s obligations under CETA
At the outset of its analysis, the FCA noted that nothing in the Canadian Statement on Implementation, in which the Canadian government set out its understanding of its rights and obligations under CETA, indicated that Canada’s obligations under the treaty were unclear or ambiguous. Rather, the government explicitly acknowledged that the purpose of additional CSP protection was to compensate “a portion of the patent term that is spent in research and development and regulatory review towards the approval of a pharmaceutical product that contains a new active ingredient or a new combination of active ingredients” (at para. 24). The FCA observed that “Canada only understood and agreed to a very specific and limited way of doing so” (at para. 30). For instance, Canada’s regulatory scheme restricts eligibility to only "innovative drugs or pharmaceutical products that contain a new active or medicinal ingredient or a new combination of active or medicinal ingredients”, subject to “the authorization for sale for the pharmaceutical product or drug [being] the first issued in Canada with respect to this new active or medicinal ingredient or new combination of active or medicinal ingredients" (at para. 31). Thus, the FCA stated that “a drug or pharmaceutical product may well be innovative but not have the benefit of a CSP if it is not the first to make actual use of the medicine ingredient or combination of medicinal ingredients” (at para. 32).
b) Sources of interpretive guidance relied upon by the FCA
The FCA also looked to each of the Canadian Statement of Implementation, the Food and Drug Regulations, and the PM(NOC) Regulations, which provided interpretive guidance for construing the medicinal ingredient eligibility requirement under the CSP Regulations. CETA itself was also considered helpful. The FCA observed that CETA was deliberate in using specific language to address what type of pharmaceutical ingredients were intended to be eligible for CSPs protection. For example, CETA specifically alluded to “active ingredient or combination of active ingredients of a pharmaceutical product” (our emphasis) as opposed to using the more general expression “medicinal ingredient”.
While both the Minister and GSK sought to rely on jurisprudence under the PM(NOC) Regulations to interpret “medicinal ingredient”, the FCA found the decisions did not provide a sufficiently precise answer (at paras. 58).
c) Legislative intention
The FCA also considered the intention of the CSP Regulations in light of the definitions in the PM(NOC) Regulations. The FCA observed that “subsection 2(2) of the PM(NOC) Regulations clarify[ies] that, for the purpose of the definition of ‘claim for the formulation’, the claim for the formulation did not need to specify all of the non-medicinal ingredients contained in the drug” (at para. 55, our emphasis). In reviewing the Canadian Statement of Implementation, the FCA noted that “there is no indication that the government understood the words ‘active ingredient’ as something other than the term regularly used in its domestic legislation” (at para. 54). In this vein, the FCA concluded that Parliament must not have intended an interpretation of “medicinal ingredient” that is dissociated of the term “active ingredient”, and so “active ingredient” and “medicinal ingredient” referred to the same thing in the regulations (at para. 56).
d) The Minister’s decision was reasonable
The FCA disagreed with the FC’s view (adopted by GSK on appeal) that the Minister adopted “a tunnel vision unduly based on administrative efficiency and a perceived need for administrative consistency to the exclusion on other highly relevant considerations” (at paras. 66-68). Beyond the consistency of the Minister’s interpretation with other domestic legislation and regulations, the FCA found that the Minister’s conclusion also accorded to information that had been provided to Health Canada by GSK itself during the regulatory process for obtaining a Notice of Compliance (“NOC”) under the Food and Drug Regulations for the medicinal ingredient. According to the details in the NOC issued for SHINGRIX®, the listed medicinal ingredient was solely the antigen, without mention of the adjuvant (at para. 71).
Further, the FCA gave no credence to GSK’s argument that the Minister’s decision was unreasonable because it did not specifically address the consistency of its interpretation with CETA and the general purpose of the CSP Regulations (at. paras 74-75). The FCA noted that the Vavilov3 framework setting out the approach for the reasonableness review does not require the administrative decision maker to engage in a formalistic statutory interpretation exercise in every case, but the Minister nevertheless “did refer to the RIAS and was thus clearly aware of the objective and rationale spelled out in it” (at para. 76). The FCA reasoned that the key question for the reasonableness review was whether there was any omitted aspect of the Minister’s analysis that would cause the reviewing court to lose confidence in the outcome reached by the Minister. In this case, the FCA found there was none.
The FCA distinguished ViiV Healthcare ULC v. Canada (Health), 2020 FC 756, relied upon by GSK, where the FC held that the patent in issue (covering the medicine JULUCA®) protected the product “as such”, and the Minister’s view was therefore not inconsistent on its face with CETA. The FCA observed that JULUCA® was the drug or pharmaceutical product, not the medicinal ingredient in the drug or pharmaceutical product. Without commenting further on this decision, the FCA cautioned that, going forward, reviewing courts should be careful with their choice of words because errors with terminology can have serious consequences and distort a meaning intended by Parliament (at para. 77).
The FCA rejected GSK’s argument that the Minister’s interpretation was unreasonable because there was no basis to hold that formulation claims were ineligible for CSP protection. The FCA held that subsection 3(2) of the CSP Regulations sets out the criteria for determining whether a patent claim is for a medicinal ingredient or combination of medicinal ingredients with reference to the new section 106(1)(c) of the Patent Act, which is entitled “Supplementary Protection for Inventions — Medicinal Ingredient”. In neither section addressing medicinal ingredient is there any reference to claims for formulations or compositions. The FCA concluded that, given the express enumeration at subsection 3(2) and the fact that, unless listed, another specific type of claim will not be sufficient to qualify a patent as eligible for a CSP, the legislator did not need to expressly exclude formulations claims (at paras. 90-95).
While the FCA rejected the use of foreign case law to establish that formulation claims specifying an active ingredient meet the eligibility requirements, it did find that foreign case law provided some persuasive reasoning as to the appropriate meaning of “active ingredient”. It relied on a factually similar decision of the European Court of Justice (“ECJ”) in which the definition of “product” in a European regulation that originated from the CETA language was found to exclude from the definition of “product” an adjuvant that was not an active ingredient. The ECJ decision held that the appropriate definition of “active ingredient” was one that contemplated substances that have a therapeutic effect on its own, which was the interpretation adopted and advanced by the Minister in the Federal Court. However, the FCA cautioned that its consideration of foreign law is not to mean that “the Canadian system must be identical to the system that was already in place in the European Union. Nor should it be inferred from these reasons that foreign case law binds Canadian Courts in any way” (at para. 63).
Although the FCA was prepared to accept that there was more than one possible interpretation of the term “medicinal ingredient” in view of the interpretation developed by the FC, the arguments put forward by GSK, and the international case law, the reasonableness standard did not call for an assessment of the most logical interpretation, and so the FCA focused simply on the administrative decision itself and whether it was reasonable. Ultimately, the FCA held that, absent any clear indication that the words “medicinal ingredient” can and should be construed in a specific manner in the context of the CSP Regulations, the Minister’s interpretation of the term should not be put aside merely because there may be a seemingly logical alternative interpretation.
1 Patent Act, s. 106(1)(c)
2 CSP Regulations, s. 3(2)
3 Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, at paras. 119-120.
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