On February 15, 2013 the Federal Court of Appeal, in a 2:1 decision, released its Reasons or Judgment holding that Celgene’s thalidomide product, THALOMID, is not an “innovative drug” under Canada’s data protection scheme for pharmaceuticals.
Thalidomide was first launched in Canada under the brand names KEVADON and TALIMOL in the early 1960. In 1961 and 1962, thalidomide was withdrawn form global markets because of its tetratogenicity and its potential to cause significant fetal malformations and in the 1962 was, along, with LSD, the only two drugs whose sale was absolutely prohibited in Canada.
In the mid 1990s, Celgene discovered that thalidomide was discovered to be effective in certain oncological indications, In 1995, thalidomide became available for compassionate or emergency uses in Canada under the Special Access Programme (SAP). In May 2009, Celgene submitted a voluminous new drug application containing new clinical trial data for the use if thalidomide in a mylenoma indications. Health Canada approved Celgene’s submission on August 4, 2010 and shortly thereafter confirmed that THALOMID would not be listed on the Register of Innovative Drugs because of the prior approvals of KEVADON and TALIMOL. C.08.004.1(1) Food and Drug Regulations defines innovative drug as follows:
“innovative drug” means drug that contains a medicinal ingredient not previously approved in a drug by the Minister and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph.
Celgene’s judicial review application of the Minister of Health’s refusal to add THALOMID to the Register of Innovative drugs was allowed by Justice de Montigny, in part, on the basis that (a) the original approvals of thalidomide should never have been given; (b) the approval of THALOMID was based on completely new clinical studies and data; and (c) neither KEVADON nor TALIMOL could have served as a Canadian Reference Product for the purpose of an abbreviated new drug submission.
Justices Gauthier and Sharlow concluded that the Applications Judge had erred in in his interpretation of “innovative drug” holding that the words of the Regulations do not lend themselves to Celgene’s construction which would require reading “previously approved” in the definition of “innovatve drug” as “currently approved”. The majority also rejected that Celgene’s new oncology clinical trials were, in themselves, sufficient confer thalidomide with innovative drugs status:
 The fact that Celgene had to submit a considerable amount of confidential data gathered at great cost does not, in and of itself, justify stretching the language of the definition of “innovative drug”. It is only one of two necessary pre-requisites for the application of the treaties’ provisions.
 Parliament had the power to extend the protection granted under the DPP to other “new drugs” as defined in the Regulations, which also require the filing of similarly substantial confidential data. From the definition adopted, in my view, it is clear that the legislator chose not to do so
Justice Nadon, following the decisions of Justice Stratas in Teva v. Sanofi Aventis, held that the steps taken by the Minister of Health in 1962 absolutely prohibiting the sale of thalidomide, nullified the prior approvals for KEVADON and TALIMOL, such that these “approvals “were not a bar to thalidomide from innovative drug status:
 … the fact that thalidomide’s NOC was revoked supports the conclusion that it should not be held to have been previously approved. Without its NOC, thalidomide is unable to satisfy the requirements for market approval in Canada. It is impossible to accept that thalidomide has nonetheless been previously approved without having market approval.
Justice Nadon further held that the relationship between innovative drugs and Canadian Reference Products was another factor in g favor of extending innovative drug status to THALOMID:
 The Appellant disputes the argument respecting Canadian reference products. At paragraph 47 of her submissions, she argues that whether something can serve as a reference product is not important for the definition of an innovative drug, because not all new drugs are innovative drugs. The Appellant goes on to argue, at paragraph 49, that the determination that thalidomide cannot serve as a Canadian reference product is separate from the definition of innovative drug. The Appellant invokes the drug DEXILANT from the case Takeda Canada Inc. v. The Minister of Health et al., 2011 FC 1444 (Takeda) and suggests that there is no reason that it could not serve as a reference product, despite not receiving data protection.
 In my respectful opinion, this approach is unhelpful in the instant case. While reference products and innovative drugs are separate definitions within the Regulations, they are necessarily related. Because there was no available drug to serve as a reference, the Respondent had to submit an NDS to obtain approval for thalidomide. Indeed, the Appellant specifically requested it and the Respondent undertook to produce 180 volumes of data in order to satisfy the request. The absence of a reference product supports the view that there is no prior approval, justifies the way in which the Respondent proceeded in this case, and bolsters the rationale for extending data protection.
A copy of the Court of Appeal’s Reasons for Judgment may be found here.
This is the second recent example where the Court of Appeal has split over the proper interpretation of “innovative drug. In January 2013, a different panel of the Court of Appeal split over whether Takeda’s dexlansoprazole product, DEXILANT, was an innovatibe drug (see our preivous post here).