Government of Canada finalizes amended NOC Regulations and new CSP Regulations

The Government of Canada has finalized the Certificate of Supplementary Protection Regulations (the "CSP Regulations") and the amended Patented Medicines (Notice of Compliance) Regulations (the "NOC Regulations").

Published in the Canada Gazette II on Sept. 7, 2017, these regulations were prepared as a result of the Canada-EU Comprehensive Economic and Trade Agreement (CETA). Both sets of Regulations are set to come into force on Sept. 21, 2017- the date which was previously proposed.[1]

We previously reported on the NOC Regulations and the CSP Regulations, both of which were initially published for consultation on July 14, 2017.

Key Takeaways

• Although a number of concerns were raised by stakeholders, no changes were made to the NOC Regulations.
• Following concerns with stakeholders, two changes were made to the CSP Regulations: (1) to remove the requirement that a patent for which CSP is sought need have at least two years remaining before expiry at the time of filing the CSP application; and (2) to amend the timely drug submission requirement for the transitional year from 18 months to 24 months.
• Both sets of regulations will come into force on September 21, 2017.

NOC Regulations

No changes were made to the NOC Regulations.

As set out in the Regulatory Impact Analysis Statement, stakeholders made the following comments during the consultation period

1. No consensual extension of 24 months - comments were received that suggested the 24 month period should be extendable on consent as it may be difficult to obtain resolution within 24 months. The government's response to these comments is that extensions are not necessary as proceedings are no longer moot if it is not decided within 24 months and further that eliminating extensions incentivizes parties to be diligent in litigation.
2. No lengthening of NOC statutory stay to 30 months - comments were received that suggested the 24 month period should be replaced with a 30 month period as it will be difficult to obtain resolution within 24 months. The government rejected this stating that the procedural amendments will facilitate timely and streamlined proceedings. Moreover, mootness is no longer an issue.
3. Effect of appeal on s. 8 liability - concerns were raised that s. 8 liability may remain even if a negative decision was reversed on appeal. The government says this is not the case; section 8(2) of the NOC Regulations sets as a precondition for liability that there is a discontinuance, dismissal or reversal on appeal. Thus, where a case was negative at trial and reversed on appeal or (sent back for redetermination) there is no longer a dismissal so there is no liability.
4. Assessment of s. 8 liability - stakeholders from both sides were concerned that liability under the NOC Regulations would not be properly assessed leading to overcompensation or undercompensation. The government claims that the current language provides flexibility for the Court with its expertise to determine the appropriate remedy in a given case. Unfortunately, this provides virtually no certainty to the parties. It remains to be seen if this will increase or decrease the settlement of cases.

A theme that arises from the government's response is that parties are to be diligent and cooperative and that the amended court procedures will otherwise address concerns of delay.

CSP Regulations

As noted above, the CSP Regulations have remained largely as they were first published with only two small changes as a result of comments from stakeholders:

1. Removal of requirement that a patent, for which CSP is sought, has at least two years patent term remaining at the time of filing the CSP application - a concern was raised that patents which were otherwise eligible for CSP were excluded due to the proposed requirement that the patent must have at least two years patent term remaining at the time of the CSP application. The proposed provision had apparently been intended to allow for the determination of conflicts during the CSP application process. In view of stakeholder comments, the government acknowledged this provision could be removed without affecting the conflict determination. Thus, the proposed s. 6(3) was removed It is now sufficient that the patent has not expired at the time of the CSP application.
2. Prescribed period for timely filing of a Canadian drug submission changed from 18 months to 24 months for the transition year - comments were raised that for the transitional year, it would be more appropriate to allow CSP applications to proceed where the Canadian drug submission was filed within 24 months of the filing of the earliest drug submission in one of the prescribed countries. The government noted that the purpose of the timely submission requirement was to incentivize early introduction of drugs to Canada, and that the majority (60%) of Canadian drug submissions are filed within 12 months, but acceded to the request for a change in s. 6(1)(b) from 18 months to 24 months to allow for a sufficient transition period.

Stakeholders also sought changes (amending or deleting) the list of "variants" to a medicinal ingredient (e.g. an ester, salt, etc.). The government rejected this change out of the concern that this would generate uncertainty.