SUPERIOR COURT OF JUSTICE - ONTARIO
(DIVISIONAL COURT)
RE: BOEHRINGER INGELHEIM (CANADA) LTD./LTÉE
Applicant
- and -
CANADIAN AGENCY FOR DRUGS AND TECHNOLOGIES IN HEALTH
Respondent
- and -
BAYER INC.
Intervener
BEFORE: JUSTICES FERRIER, JANET WILSON and LEDERMAN
COUNSEL: Scott Maidment and George Hunter Chris Paliare and Jeffrey Levine for the Respondent Robert Centra for the Applicant for the Intervener Jonathan Hood for the Applicant
HEARD AT TORONTO: OCTOBER 16, 2008
E N D O R S E M E N T
1The applicant’s request for judicial review of the recommendation of the Canadian Agency for Drugs and Technology in Health (the CADTH) is dismissed. The allegation that CADTH secretly or arbitrarily breached a duty of fairness to the applicant by failing to publish the draft rules of a pilot project, and by failing to strictly follow the draft rules is without merit.
2CADTH is a non-profit federal corporation with representatives from the Health Ministries of the Federal, Provincial and Territorial governments. CADTH is involved in various capacities reviewing new drugs and technology and recommending which drugs should be listed with government drug plans.
3It is not disputed that CADTH is part of the machinery of both the federal and provincial governments, and hence its conduct, including recommendations, are subject to judicial review. There is no specific defined decision-making power, but CADTH is subject to a duty of procedural fairness. (See Certified General Accountants Assn. (Canada) v. Canadian Public Accountability Board (2008), 2008 ONSC 1536, 233 O.A.C. 129 (Ont. Div. Ct.) at para 62, McDonald v. Anishinabek Police Services et al. (2006), 2006 ONSC 37598, 83 O.R. (3d) 132 (Div. Ct.) and Re Haber and Medical Advisory Committee of the Wellesley Hospital et al (1986), 1986 ONSC 2766, 56 O.R. (2nd) 553 (Div. Ct.) at page 556).
4The applicant Boehringer Ingelheim (Canada) Ltd. is a drug manufacturer seeking approval for its new drug Pradox, which prevents blood clotting after knee or hip replacement surgery. The Intervener, Bayer Inc. is also a drug company seeking approval for its new drug Xarelto, targeted for the same patient group.
5Timing in marketing a new drug is crucially important. The first new drug on the market and listed with a drug plan has distinct advantages for the manufacturer over any competitor.
6The usual process for drug approvals involves sequential steps. The receipt of the Notice of Compliance (NOC) from Health Canada is a prerequisite to submitting the drug to CADTH for consideration to be included in any drug plan. The sequential process involves a review by experts at the various stages. The process of drug approval is expensive and there is overlap and duplication, particularly involving the experts in the sequential steps.
7The pharmaceutical industry urged CADTH to simplify the approval process for new drugs.
8CADTH began discussions with those concerned in the drug approval process, including pharmaceutical companies, with respect to a pilot project called the Common Drug Review Collaboration Pilot Project (the Pilot Project).
9The Pilot Project with the first drug, Alvesco, began in 2006. It allows for the Health Canada NOC and the CADTH procedures to occur concurrently, with the right of experts to share information. The objective of the Pilot Project is to streamline the various drug approval processes, to reduce costs of duplication, and improve efficiency and timelines in the interests of the public.
10The Intervener, Bayer, volunteered and was approved by Health Canada to participate in the Pilot Project.
11The applicant did not seek to participate in the Pilot Project and pursued its approvals in the usual course. The applicant had submitted its application to Health Canada in the spring of 2007, prior to Bayer expressing interest in participating in the Pilot Project in August 2007.
12The applicant on September 8, 2008 became aware of Bayer’s involvement in the Pilot Project by reviewing a posting of Xarelto’s drug review status on the CADTH website. It was at this point that the applicant also became aware that the Bayer drug is in direct competition with the applicant’s new drug.
13If Bayer’s new drug and the applicant’s new drug are approved at a meeting which is scheduled for November 19, 2008, both drugs will be on the market at the same time. Had Bayer followed the usual sequential course as posted on the CADTH website, it is not disputed that the Bayer drug could not have been approved prior to February, 2009. The applicant objects to Bayer “jumping the queue” as a result of its participation in the Pilot Project.
14Significant economic interests are at stake.
15CADTH publishes on its website detailed information about the existing procedural requirements for the drug approval process. This information is available to the drug industry and to the public. When changes in procedures are made, they are published on the website. This is established practice.
16CADTH also disseminates information in a variety of other means including publications, education seminars, and meeting with industry representatives, as outlined in detail in the respondent’s factum and the affidavits filed.
17The applicant asserts that as the procedures and the draft rules for the Pilot Project were not listed on the CADTH website in breach of their usual practice, Bayer had an unfair advantage as Bayer received a copy of the draft rules in March 2008. The applicant went so far as to characterize the draft Pilot Project rules as “the secret rules”.
18The applicant alleges that providing Bayer with the unpublished draft rules is clear preferential treatment and that CADTH breached its duty of fairness to the applicant. The applicant’s position is that it followed the usual approval procedures in accordance with what was posted on the website, to its detriment.
19We disagree with this submission and characterization of the draft rules by the applicant.
20It is abundantly clear from the undisputed facts that CADTH engaged in widespread communication from 2006 to 2008 with the pharmaceutical industry to both shape the direction of the Pilot Project initially, and to report to the industry as the Pilot Project progressed. There was no attempt to hide the facts about the Pilot Project from certain drug companies, while favouring others. To the contrary, CADTH engaged in significant public effort to communicate information about the Pilot Project in a transparent manner.
21As stated, the Pilot Project was initiated in July 2006 with the drug Alvesco.
22Once the Pilot Project was established CADTH was proactive in communicating with the pharmaceutical industry at large through publications, education programmes, various presentations and industry correspondence.
23CADTH published on their website in September 2006 the status of the approval process for Alvesco, and specifically referred to the Pilot Project. It states “Submission filed Pre-NOC as a collaborative pilot project between CDR, Health Canada and manufacturer”.
24In January 2007 in a CADTH presentation to Rx&D and Biotech Canada, two of the industry organizations representing pharmaceutical companies, the two phases of the Pilot Project were described. The contents of a handout [found at page 542 of the record] provided to those present at the meeting are important, given the applicant’s submissions. The next steps for phase two of the pilot project included:
Identify a second drug for phase 2 process
Revise pilot process based on evaluation of Alvesco
25It is clear that at least in one education programme held before the Pilot Project began in June 2007 that a representative of the applicant was in attendance. She states that she does not recall the presentation about the Pilot Project.
26We accept that the Canadian drug manufacturing industry pays close attention to the activities of CADTH.
27In August 2007, an industry publication, Provincial Reimbursement Provider, published information about the Pilot Project, explaining the first phase of the Pilot Project involving Alvesco, and inviting manufacturers who were interested in participating in the Pilot Project to contact a representative of the respondent. The publication states:
PRE-NOC REVIEWS
One initiative that CDR representatives spoke highly of was the project to initiate CDR reviews before a Health Canada Notice of Compliance is issued for a new medicine. Tierney reported that the three-way dialogue with Health Canada, specific manufacturers and the CDR was very helpful during the first pilot project with Alvesco. He views the model as a potential mechanism to speed up the review process, especially for medicines granted priority review status. He indicated that discussions are underway among the CDR, Health Canada and manufacturers to pursue further projects along these lines, and encouraged interested manufacturers to contact him if interested in exploring this process.
[emphasis added]
28Bayer was interested in participating in the Pilot Project.
29Bayer had a pre-submission meeting with the respondents in August 2007 and expressed interest in participating in the Pilot Project. It was made clear by the CADTH representative that Health Canada decided which drug could participate in the Pilot Project, and Bayer’s name was forwarded to Health Canada.
30Bayer was approved by Health Canada for participation in the Pilot Project in November 2007, and submitted its application for pre-approval to Health Canada in December 2007.
31In December 2007 the House of Commons Standing Committee of Health specifically addressed the subject of the Pilot Project. Pharmaceutical industry representatives were present and either gave evidence or presented briefs to the Standing Committee.
32On the evidence it is clear that that the existence and nature of the Pilot Project was widely known in the Canadian pharmaceutical industry.
33The draft rules dated March 2008 were provided to Bayer on March 10, 2008 due to their participation in the Pilot Project. The draft rules were not posted on the CADTH website, which according to the applicant was contrary to established practice, and contrary to the legitimate expectations of the applicant to be fully informed about any changes in drug approval procedures.
34We conclude that there was no obligation for CADTH to publish the draft rules on their website. The Pilot Project was in a state of flux, and the rules were a draft only, and were subject to change.
35It is not disputed that the applicant knew of the existence of the Pilot Project. Drug manufacturing is highly competitive. In the words of counsel for the respondent it is an “intimate industry”.
36The draft rules were provided to Bayer well after Bayer sought and was approved by Health Canada to be included in the Pilot Project.
37When Bayer expressed interest in participation in the Pilot Project in August 2007, and when the applicant began its approval process for their drug in the spring of 2007, the March 2008 draft rules did not exist. The decision of Bayer to participate in the Pilot Project was not triggered by Bayer receiving a copy of the draft rules on March 10, 2008.
38The applicant asserts that the draft rules were not followed, as Bayer expressed an interest in participating in the Pilot Project, whereas the draft rules contemplate Health Canada contacting manufacturers to solicit involvement. We conclude that there is no merit to this position. In our view the fact that Bayer expressed interest to the respondent in the pre-submission meeting in participating in the pilot project, and that the respondent made Health Canada aware of Bayer’s interest does not breach the draft rules. The respondent made it clear that Health Canada would determine whether or not Bayer could participate. It is clear from the communication to the industry (such as that found at para. 27of these reasons) that a second drug was being sought for the Pilot Project, and any interested manufacturer was encouraged to contact the respondent.
39Bayer learned of the Pilot Project through publicly disseminated information that was available to the Canadian drug manufacturers, including the applicant.
40It is not disputed that at any time that any drug manufacturer, including the applicant, could voluntarily apply for inclusion to the Pilot Project. The final decision about who would be included in the Pilot Project was that of Health Canada. There is no evidence whatsoever of any preferential treatment for Bayer.
41Bayer never conducted itself in a secret manner but took advantage of a programme of which the applicant, too, could have availed itself. As for CADTH, at the time of Bayer’s expression of interest in participating in the Pilot project, it had no way of knowing about the applicant’s drug and its involvement with the Health Canada process. That is so because the process of obtaining a NOC from Health Canada is a confidential one.
42Accordingly, there was no collaboration by CADTH and Bayer to allow Bayer to “jump the queue” and pass through the drug review gate ahead of the applicant.
43As Bayer points out, participation in the Pilot Project provided no guarantees that the approval process would be faster, more efficient, or less costly. No representations were made by CADTH that the approval process would be expedited by participation in the Pilot Project.
44CADTH is entitled to initiate a Pilot Project to try to improve and streamline the process for the approval of drugs available to the public. The conduct of CADTH throughout has been transparent, even-handed, fair and reasonable. There was no breach of the legitimate expectation of the applicant. The applicant knew about the Pilot Project. Any drug company, including the applicant could have applied to participate in the Pilot Project. CADTH was not required to publish the draft rules on their website. The draft rules were not in existence when Bayer expressed interest in the Pilot Project, and the applicant began its approval process.
45The application for judicial review of the recommendations of CADTH and a prohibition order is therefore dismissed.
Costs
46It was agreed that Bayer would not seek costs or be required to pay costs if Bayer was added as an intervener. The applicant and respondent agreed that the unsuccessful party would pay the costs of the application before Karakatsanis, J. and before this Court as agreed, or as assessed. The applicant is therefore to pay costs to the respondent in accordance with these terms.
FERRIER J.
JANET WILSON J.
LEDERMAN J.
RELEASED: October 29, 2008