Songquan Deng /
22 April 2015Americas

Canada’s Supreme Court throws out Sanofi compensation appeal

The Supreme Court of Canada has dismissed an appeal by French pharmaceutical company Sanofi in its patent dispute with Canadian generic drug maker Apotex.

Sanofi had appealed against the Federal Court of Appeal’s decision that it must compensate Apotex for lost sales of generic Ramipril, a hypertension drug.

But in a ruling issued on Monday (April 20), the court threw out Sanofi’s appeal.

Sanofi had patent rights covering Ramipril and uses of the drug in Canada. It markets Ramipril in Canada under the name Altace.

It had applied to stop Apotex, which sought to enter the Canadian market with a generic version of Ramipril, from receiving a notice of compliance (NOC)—marketing approval—after arguing the product would infringe its patent rights.

Apotex eventually received marketing approval (NOC) from the minister of health, though its market entry had been delayed by Sanofi’s litigation from April 2004 to December 2006.

Under section 8 of Canada’s Patented Medicines (Notice of Compliance) Regulations (NOC Regulations), if an innovator company is unsuccessful in its application to stop a generic from receiving a NOC, then it must compensate the generic company for any lost profits due to delayed market entry.

The trial judge at the federal court, Judith Snider, agreed with Apotex that it was entitled to compensation, although the specific amount of damages subsequently paid was kept confidential.

Snider assumed that the NOC Regulations would apply to delay the generic competitors of the generic section 8 damages claimant, as they did in the real world, subject to evidence to the contrary.

Both Sanofi and Apotex appealed against different components of the federal court’s decision.

The appeals court considered what framework should be applied in order to determine how much compensation should be paid, delivering its decision in March 2014.

At the hearing, Sanofi argued that the trial judge had erred in her construction of the “hypothetical market” and said it would result in overcompensation in damages to be paid when coupled with the amount Sanofi paid Teva in a companion Ramipril case.

The appeals court, in a 2-1 decision, agreed with the trial judge.

Judge Karen Sharlow, joined by Judge Denis Pelletier, said that the methodology Snider adopted is “more consistent with the language and purpose of the NOC Regulations than the open season methodology”—which means every potential competitor should be assumed to enter the market unimpeded by the NOC Regulations.

However, Judge Robert Mainville dissented, concluding that the framework employed by Snider would inherently overcompensate in the case of multiple section 8 damages claimants. He offered support for the “open season methodology”.

A spokesperson for Sanofi told LSIPR that the company was disappointed with the ruling, and added: “In Sanofi Canada’s estimation, this decision further reinforces a lack of predictability in the current business environment and has the potential to negatively impact global investments in research and development for innovative medicines in Canada.”

Apotex did not respond to a request for comment.

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