Date: 20010831
Docket: T-315-01
Neutral Citation: 2001 FCT 973
Ottawa, Ontario, this 31st day of August, 2001
PRESENT: THE HONOURABLE MR. JUSTICE BLANCHARD
BETWEEN:
NU-PHARM INC.
Applicant
- and -
ATTORNEY GENERAL OF CANADA and
THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER AND ORDER
[1] On April 2, 2001, Merck & Co., Inc. and Merck Frosst Canada & Co.("Merck") brought a motion before this Court in which an Order is sought adding Merck as a party respondent or, in the alternative, as an intervenor with full rights of participation as if it were a party.
Facts
[2] Merck is requesting to be added as party in the application brought by Nu-Pharm Inc., ("the applicant"), requesting an Order declaring that the respondent, Minister of Health, and his delegates (the "Minister") had and have no lawful authority to declare that the sale or advertisement of Nu-Pharm's cardiovascular medication, Nu-Enalapril tablets, is contrary to section C.08.002 of the Food & Drug Regulations or is otherwise unlawful; an order declaring that, in purporting to treat Nu-Enalapril as a New Drug under section 0.08.001 of the Food & Drug Regulation; an order declaring that the Minister has acted and continues to act without lawful authority and in an unfair, discriminatory, arbitrary and irrational fashion and; an order requiring the Minister to retract all statements that the sale of Nu-Enalapril tablets is unlawful.
[3] This is the latest chapter involving the efforts of two generic drug companies, Apotex Inc. and the applicant, to manufacture and sell the medicine Enalapril maleate in competition with the respondents Merck. Enalapril maleate is included in Canadian Patent No. 1,275,349 which is owned by Merck & Co. Inc. and licensed to Merck Frosst Canada & Co.
[4] Enalapril maleate is the medicinal ingredient in Merck's product Vasotec, and is used to treat hypertension and certain heart conditions. In 1987, Merck obtained a Notice of Compliance (NOC) for Vasotec. Merck has produced and sold Vasotec in Canada since that time.
[5] This motion is part of a litigation that started on September 11, 1997, when the applicant submitted an Abbreviated New Drug Submissions ("ANDS") to the Minister seeking a NOC for Nu-Enalapril tablets. The Minister refused to receive and process the applicant's ANDS. The applicant commenced proceedings seeking a declaration that the Minister's refusal to process Nu-Pharm's ANDS was unlawful and should be set aside.
[6] On November 19, 1998, Mr. Justice Cullen allowed the application, set aside the Minister's refusal and referred the matter back to him for redetermination ([1999] 1 F.C. 620 (T.D.)). On February 25, 1999, the Minister issued the NOC to the applicant.
[7] On January 31, 1999, Merck applied to the Trial Division of the Federal Court for: (a) an Order under Rules 104(1)(b) and 303(1) of the Federal Court Rules adding Merck [...] as respondents to the originating notice of application herein; or; (b) an order under Rule 109(1) of the Federal Court Rules, 1998 granting leave to Merck [...] to intervene in the within proceeding.
[8] On February 17, 1999, McGillis J. allowed Merck's motion, granting Merck and Merck Frosst's request to be added in the proceeding as respondents.
[9] By judgment dated November 23, 1999, McGillis J. quashed Nu-Pharm's NOC for Nu-Enalapril, but by further order dated December 6, 1999, McGillis J. stayed that order pending appeal.
[10] On March 13, 2000, Sharlow J.A. of the Federal Court of Appeal dismissed Nu-Pharm's appeal, with the result that Nu-Pharm's NOC for Nu-Enalapril was quashed effective March 13, 2000.
[11] Between March 22, 2000 and July 25, 2000, the applicant and the Minister exchanged correspondence on the issue of Nu-Enalapril. Essentially, the litigious issue was whether a NOC was required on the presumption that Nu-Enalapril was a New Drug as defined in section C.08.001 of the Regulations. The applicant argued that it appeared from the wording of the Regulations and the Policy that Nu-Enalapril was not a New Drug, and hence, a NOC was not required for lawful sale.
[12] On February 22, 2001, by way of a notice of application, the applicant initiated the present proceedings in which Merck wants to take part.
[13] Therefore, the issue before this Court is whether Merck should be added as a party respondent or, in the alternative, as an intervenor with full rights of participation as if it were a party.
Issues
[14] 1. Should Merck be added as parties respondent to this application pursuant to Rule 104 of the Federal Court Rules, 1998?
2. In the alternative, should Merck be granted leave to intervene and to participate as full parties to the application, with the opportunity to file evidence, examine witnesses, make representations, motions, and submissions with all rights of appeal pursuant to Rule 109 of the Federal Court Rules, 1998?
Analysis
[15] In order to have a clear picture of the legislative process which governs the present matter, I refer to Sharlow J.A.'s analysis of the regulatory scheme in Merck & Co. v. Nu-Pharm Inc., online: QL [2000] F.C.J. No. 380, paras 6-14:
By virtue of section C.08.002(1) of the Food and Drug Regulations, no one is permitted to sell a new drug in Canada unless the Minister of Health issues a notice of compliance for the new drug under section C.08.004.
The first step in obtaining a notice of compliance is to file a new drug submission or an abbreviated new drug submission (ANDS) containing specified information. A new drug submission must include evidence that establishes the safety and efficacy of the new drug, as well as information
relating to the manufacturing process for the drug and other matters.
In an ANDS, information as to the safety and efficacy of the new drug is not required to be included.
Instead, the safety and efficacy of the new drug are inferred from its similarity to a "Canadian reference product" as defined in section C.08.001.1 of the Food and Drug Regulations, which reads as follows:
[...] "Canadian reference product" means
(a) a drug in respect of which a notice of compliance is issued pursuant to section C.08.004 and which is marketed in Canada by the innovator of the drug,
(b) a drug, acceptable to the Minister, that can be used for the purpose of demonstrating bioequivalence on the basis of pharmaceutical and, where applicable, bioavailability characteristics, where a drug in respect of which a notice of compliance has been issued pursuant to section C.08.004 cannot be used for that purpose because it is no longer marketed in Canada, or
(c) a drug, acceptable to the Minister, that can be used for the purpose of demonstrating bioequivalence on the basis of pharmaceutical and, where applicable, bioavailability characteristics, in comparison to a drug referred to in paragraph (a).
Compliance with the Food and Drug Regulations is a necessary condition for issuance of a notice of compliance for a new drug, but it is not a sufficient condition. The requirements of the Patented Medicines (Notice of Compliance) Regulations must also be satisfied. Those regulations were introduced in 1993 when the compulsory licensing system for patented medicines was repealed. Their purpose is explained in the Regulatory Impact Analysis Statement, Canada Gazette Part II, Vol. 127, No. 6, page 1388:
As a general rule, judicial remedies are sufficient to address patent infringement. However, with the enactment of Bill C-91 [S.C. 1993, c. 2] the government has created an exception to patent infringement allowing generic competitors to undertake any activities necessary to work up a submission to obtain regulatory approval of a product. This removes a patent right that might have
otherwise been available to patentees to prevent generic competitors from obtaining such regulatory approval of their products.
These Regulations are needed to ensure that this new exception to patent infringement is not abused by generic drug applicants seeking to sell their product in Canada during the term of their competitor's patent while nonetheless allowing generic competitors to undertake their regulatory approval work necessary to ensure they are in a position to market their products immediately after the expiry of any relevant patents.
The foundation of the Patented Medicines (Notice of Compliance) Regulations is a register of "patent lists" created and maintained by the Minister under Regulation 3. A person who obtains a notice of compliance for a drug that embodies a patented medicine, and who is the owner or exclusive licensee of the patent, or who has the consent of the owner, may file a patent list for that drug. A person who files a patent list for a drug is referred to as the "first person."
An ANDS by definition involves a comparison with or reference to another drug. For that reason, anyone who files an ANDS that refers to a drug for which a patent list has been filed must comply with Regulation 5(1) of the Patented Medicines (Notice of Compliance) Regulations. The relevant parts of Regulation 5(1) read as follows (emphasis added):
5(1). Where a person files or has filed a submission for a notice of compliance in respect of a drug and wishes to compare that drug with, or make reference to, another drug that has been marketed in Canada pursuant to a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the person shall, in the submission with respect to each patent on the register in respect of the other drug,
(a) state that the person accepts that the notice of compliance will not issue until the patent expires; or
(b) allege that
[...]
(ii) the patent has expired,
(iii) the patent is not valid, or (iv) no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed.
A person who is required to comply with Regulation 5(1) is referred to as the "second person." By
virtue of Regulation 5(3), a second person who makes one or more of the allegations referred to in Regulation 5(1)(b) must serve the first person with a notice of the allegations made and a detailed statement of the legal and factual basis for the allegations. That gives the first person an opportunity
to consider whether it has grounds for attempting to stop the issuance of the notice of compliance for the new drug.
Regulation 6 provides that the first person may, within 45 days of service of the information referred to in Regulation 5(3), apply to the court for an order prohibiting the issuance of the notice of compliance to the second person. That order must be made if the court finds that none of the allegations is justified.
Pursuant to Regulation 7(1)(e), the day on which the Minister receives proof of the application for a prohibition order marks the commencement of a 24 month period during which the Minister is precluded from issuing the notice of compliance. This automatic statutory injunction may be terminated by any of the circumstances specified in Regulation 7, and may also be extended by consent or by court order. Under Regulation 7(4), dismissal of the application for prohibition puts an end to the statutory injunction.
[16] Therefore, it is with this regulatory scheme that we must address the issue before us.
[17] The sole issue to be addressed is whether Merck has a direct interest in the issue to be determined in the application brought by the applicant and if it will be directly affected by the outcome of the decision.
1. Should Merck be added as a parties respondent to this application pursuant to Rule 104 of the Federal Court Rules, 1998?
[18] Rule 104 of the Federal Court Rules, 1998 governs party status. The rule provides as follows:
104. (1) At any time, the Court may
104. (1) La Cour peut, à tout moment, ordonner :
(a) order that a person who is not a proper or necessary party shall cease to be a party; or
a) qu'une personne constituée erronément comme partie ou une partie dont la présence n'est pas nécessaire au règlement des questions en litige soit mise hors de cause;
(b) order that a person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined be added as a party, but no person shall be added as a plaintiff or applicant without his or her consent, signified in writing or in such other manner as the Court may order
b) que soit constituée comme partie à l'instance toute personne qui aurait dû l'être ou dont la présence devant la Cour est nécessaire pour assurer une instruction complète et le règlement des questions en litige dans l'instance; toutefois, nul ne peut être constitué codemandeur sans son consentement, lequel est notifié par écrit ou de telle autre manière que la Cour ordonne.
(2) An order made under subsection (1) shall contain directions as to amendment of the originating document and any other pleadings.
(2) L'ordonnance rendue en vertu du paragraphe (1) contient des directives quant aux modifications à apporter à l'acte introductif d'instance et aux autres actes de procédure.
[19] In Apotex Inc. v. Canada (Attorney General), online QL: [1993] F.C.J. No. 245,
McGillis J., canvassed the principles governing party status when she stated:
The addition of a party as a respondent to a judicial review proceeding is a discretionary matter governed by the dictates of the interests of justice, including the necessity of ensuring the effective and complete determination and adjudication of all matters in dispute.
(...)
Although the Attorney General of Canada and the Minister of National Health and Welfare are respondents in the judicial review application brought by Apotex, their interests are divergent from those of the Merck companies which own the patent and exclusive licences for enalapril. As a result, it cannot be said that they would adequately represent the interests or advance the arguments applicable to the situation of the Merck companies.
[20] In my view and based on the jurisprudence of this Court on granting party status, I find that Merck has a direct, pressing and legitimate interest in these proceedings as they relate specifically to Merck's patent, the `349 Patent and its Canadian sales of VASOTEC.
[21] Further, McGillis J., in Apotex Inc. v. Canada (Minister of Health) online QL: [2000] F.C.J. No. 248 at paragraph 5, stated that the Rules did not permit the court to limit any of the rights that accrue to a party in a proceeding and held that Bristol-Myers, the patentee, was entitled to participate fully in the application. Furthermore, even though the application was framed in a way to exclude the patentee and appeared to be concerned solely with the interpretation and application of the Food and Drug Regulations and the NOC Regulations, as is the case in the argument advanced by Counsel for the applicant in the present case, McGillis J. held that: "Bristol-Myers [the patentee] is clearly and unquestionably a proper party due to its status as the patentee of the drug in question."
[22] In the present case, Merck is clearly and unquestionably the patentee of the ‘349 Patent. Merck's presence before the court in this application is essential for the effective and complete adjudication of the issues raised by Nu-Pharm. The relief sought by Nu-Pharm is for the purpose of allowing Nu-Pharm to sell Nu-Enalapril which could substantially and directly affect Merck's patent rights.
[23] I accept the submission that Merck could be seriously and detrimentally affected in respect of its legal rights as a patentee, in respect of its rights under the NOC Regulations, and in respect of its entitlement under a Consent Order of this court in the Infringement Action if Nu-Pharm were granted the relief sought in the proceedings against the Minister.
[24] It is my view that Merck's presence before the Court is necessary to assure that all matters in dispute in this application may be effectively and completely determined. I am therefore exercising my discretion to add the Merck companies as respondent parties in the Nu-Pharm application of February 22, 2001.
[25] Having granted party status to Merck, it is not necessary to address the second issue pursuant to Rule 109 of the Federal Court Rules, 1998.
ORDER
THIS COURT ORDERS that:
1. Merck & Co., Inc. and Merck Frosst Canada & Co. be added as parties respondent to this application.
2. The style of cause shall now read as follows:
NU-PHARM INC.
Applicant
- and -
ATTORNEY GENERAL OF CANADA and THE MINISTER OF HEALTH,
MERCK & CO., INC., and MERCK FROSST CANADA & CO.
Respondents
3. Costs of this motion to Merck & Co., Inc. and Merck Frosst Canada & Co.
Judge