Category Archives: Food/Drugs/Healthcare/Life Sciences

Take Two Pills and Call Your Lawyer in The Morning: Consumers Allege They Were Misled by The Makers of COLD-FX

The makers of COLD-FX might be feeling a little under the weather after appearing in the BC Superior Court to further respond to allegations that untrue representations and omissions induced consumers to purchase the drug product that was ineffective at providing “immediate relief” and therefore “worthless” if taken in accordance with the representations.   The case is the latest class action involving misleading advertising allegations to make Canadian headlines.

The claim against Valeant Pharmaceuticals, and its subsidiary, Afexa Life Sciences, was started in 2012 by a Vancouver Island resident Don Harrison over advertising saying that COLD-FX provided “immediate relief of cold and flu” if taken over a three-day period at the first sign of cold or flu symptoms.  A study showed that the product provides no such short term relief.  Rather, patients experienced a therapeutic effect only after taking the product daily for at least two months, and six months in the case of seniors.  Harrison alleges that the companies continued to “knowingly or recklessly” promote COLD-FX as a short term remedy despite evidence to the contrary. A similar action has been commenced in Saskatchewan.

COLD-FX is a top-selling natural health product in Canada, with sales topping nearly $120-million as recently as 2011, according to a November 15, 2015 Globe and Mail article, “Why COLD-FX is too good to be true”.   As part of one COLD-FX natural health product license, Health Canada has approved a number of claims for COLD-FX, including that the product:

Helps reduce the frequency, severity and duration of cold and flu symptoms by boosting the immune system. …Provides further reduction of cold and flu symptoms when taken with a flu shot… Clinically proven to reduce the frequency, severity and duration of cold and flu symptoms in individuals over 65 by boosting the immune system. … helps reduce overall symptoms of sore throat, runny nose, sneezing, nasal congestion, malaise, fever, headache, hoarseness, ear-aches and cough.

The plaintiff in the BC action is seeking class certification so that anyone who bought COLD-FX for the short-term relief of cold and flu symptoms will be able to apply for a refund. The companies have denied the allegations and are contesting the application for class-action certification.

The BC Supreme Court has previously refused to certify a proposed consumer class action concerning misleading advertising.  In Clark v Energy Brands Inc., 2014 BCSC 1891, the plaintiff alleged that Energy Brands Inc. and Coca-Cola Ltd., systemically misrepresented bottled beverages beginning with the trademark VITAMINWATER, and the description that the beverages are “nutrient enhanced water beverage”, and misled consumers to believe the products were healthy beverages with a minimal amount of sugar.  The Court refused to certify a class stating that the plaintiff had not met the requirements of the BC Class Proceedings Act, namely, whether “the claims of the class members raise common issues, whether or not those common issues predominate over issues affecting only individual members”. The Court stated:

However, in my view whether the labelling and marketing of the product has actually misled a consumer is an inherently individualistic and fact-based question.

There is of course, no evidence that all consumers were misled, at all times, in respect of each and every consumer transaction in question. No such evidence would be possible. Yet the relief sought by the plaintiff in the context of the plaintiff’s arguments for potential remedies would practically amount to such a conclusion. Otherwise there would be no utility in the declaration sought.

The COLD-FX class action also follows other recent class actions launched against Boiron Inc. on behalf of consumers who purchased Oscillococcinum or Oscillo, a homeopathic product marketed to treat the flu.  The petitioner for the Quebec class action claimed  that consumers were misled into purchasing a product that was no more effective than a placebo sugar pill, with ingredients that are not medically effective, and diluted to the degree of being not present in the final product.  The class was not certified by the Superior Court of Quebec.  The decision has been appealed and a motion to dismiss the appeal was denied.

The Superior Court denied certification on the basis that the facts alleged by the petitioner did not justify the conclusions sought, and also that the petitioner is not in a position to adequately represent members of the class.  On the first point, the Superior Court found that the petitioner did not demonstrate a prima facie case of false representations.  The Court found that Boiron represents that the product relieves flu symptoms, and not that it prevents, cures or fights the flu, or even that it does so with an active ingredient.  Further, the evidence did not demonstrate the product is nothing more than a placebo.  In fact, the expert opinion filed by the petitioner acknowledged an ability of the product to relieve flu-like symptoms “slightly better” than a placebo. Further, evidence filed with the Natural Health Products Directorate of Health Canada in the process of obtaining a license for the product included a randomized placebo-controlled study. However, the petitioner seemed to suggest that the efficacy of the product should be assessed not solely on statistical evidence, “which seems to satisfy Health Canada”, but a higher standard.  The Court commented:

While the merits of homeopathy and the nature of the evidence required by Health Canada to issue a licence for a homeopathy product may be challenging subjects, the Court has to be concerned with the Petitioner’s allegations and whether she has an “arguable case” to present.

The COLD-FX and Oscillo cases raise the question of how to reconcile allegations of false and misleading representations against the fact that the products were licensed by the Natural Health Products Directorate.   Will a product license serve as a shield to absolve the license holder from liability for false and misleading representations in relation to licensed claims? Will the following comments by the Supreme Court of Canada in another class action case be applied to licensed products?

[C]ompliance with statutory obligations is not always determinative of the issue of civil fault … [C]are must be taken . . .  not to conflate the notion of civil fault and the violation of a statutory norm, whether in a commercial setting or elsewhere … [J]ust because a failure to discharge a statutory obligation leads to a demonstration of fault in all but the most exceptional cases, it does not follow that a civil fault is absolved where there is no such failure.

The claimed misrepresentations in the COLD-FX case relate largely to how quickly COLD-FX takes effect (“immediate relief …”, “at the first sign of symptoms for optimal results”, “stops colds & flu in their tracks”).  The plaintiff claims “at no time has COLD-FX been permitted by Health Canada to make (such) representations.”  Interestingly, several COLD-FX licensed products are branded “COLD-FX First Signs”, with approved recommended use including “Take at first signs of cold to help reduce the frequency of colds and flus.”  These products contain additional ingredients to ginseng (panax quinquefolius).

In the VITAMINWATER case, the defendants also raised arguments concerning the effects of federal legislation and the federal regulatory scheme.  For example, the defendants argued that the regulation of the product as a natural health product specifically precluded listing the quantity of non-medicinal ingredients, such as sugar, on the label of the product.  In response, the plaintiff argued that authorization of the sale of the product as a natural health product did not provide relief from the responsibility to not mislead the public, and cited a letter from Health Canada, that stated “…you are responsible for ensuring that advertising claims on the label do not contravene s. 9 of the FDA.”  That section prohibits the labelling, sale or advertising of drugs in a manner that is “false, misleading or deceptive or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety.”  The plaintiff further argued that the deceptive practices of the defendants start with the name of the product itself, VITAMINWATER, which was not mandated by Health Canada. Although the Court ultimately did not certify the class, it stated the issues arising from the federal licensing regime “could potentially go to the merits of the claim … (but) do not preclude certification.”

The Boiron decision in Quebec also casts doubt on certifying a class where the representative fails to show that he or she has taken steps that illustrate his or her interest to play the role of representative.   In finding the petitioner failed to demonstrate that she was in a position to represent the members of the proposed class adequately, the Court noted:

What seems, prima facie, to be the real trigger of the recourse is the lawyer-induced opportunity to obtain a settlement in Canada, because one was achieved in the U.S. against Boiron U.S.A., based, prima facie, on different circumstances, including the representations by Boiron U.S.A. on the presence of an “active ingredient”.  The sequence of events … suggests to the Court that the Petitioner made no reasonable research on Oscillo Products and that she made no reasonable attempt to find other potential group members.

The COLD-FX and the Oscillo Boiron cases are also interesting to Canadians given that our punishing winters mean these products are likely found on the shelves of many medicine cabinets.  Beyond that, the cases are noteworthy given the attempt at class certification to address advertising claims that consumers believe are misleading.  For a few years now, we have heard from our US counterparts that that risk of misleading advertising is not just regulator or competitor action, but by consumers acting as a class. Although class actions have not been prevalent in Canada, this may mark the beginning of a trend, and a significant change to the risk to companies when they make product claims.  A quick search of the Canadian Bar Association’s class action database identifies several class actions related to misleading advertising with products ranging from Sketchers shoes to Red Bull energy drinks.

Updates in the Pharmaceutical Sectors – under Chinese Competition Law Regime

It is the eighth year since the Chinese Anti-Monopoly Law (“AML”) came into effect. As the focus of the AML enforcement expands increasingly across a variety of industries these years, pharmaceutical sector becomes one of them. What is more, in 2015, some major Chinese legislation regarding pharmaceutical sector were revised to reduce the restrictions imposed on the pharmaceutical market by the government. This may lead to the result of, on the one hand, promotion of competition in the pharmaceutical market, which provides a better environment for pharmaceutical companies in the marketplace. On the other hand, this may render the pharmaceutical companies exposed to more surveillance of competition enforcement in China. Against this backdrop, this article first introduces the recent AML enforcement in the pharmaceutical sector in China, and then explains the legislative updates on pharmaceutical sector as well as their potential effects on the industry from a competition law perspective.

Recent AML Enforcement in Pharmaceutical Sector

On 2nd February 2016, the National Development and Reform Commission (“NDRC”) published on its website the penalty decision regarding five domestic pharmaceutical companies stating that it found after an investigation that five companies had reached and implemented monopoly agreements on the sales of allopurinol ingredients during the period between April 2014 and September 2015.  In its decision, NDRC claimed that the five companies, Chongqing Qingyang Pharmaceutical and its distributor Chongqing Datong, the Place Pharmaceutical Jiangsu, Shanghai SINE Pharmaceutical and its distributor Shangqiu Huajie held, from April 2014 to April 2015, four meetings on the distribution of allopurinol and reached monopoly agreements on: (1) fixing and raising allopurinol prices; (2) dividing markets for sales of allopurinol; and (3) reaching an agreement on bidding in different areas. As a punishment, NDRC requested the five companies to terminate their illegal behavior immediately and imposed a fine of 3.995 million RMB (USD 610,000) in total. Furthermore, on 22nd December 2015, the Chongqing municipal branch of the State Administration for Industry and Commerce of the People’s Republic of China (“Chongqing AIC”) imposed one of the above-mentioned five pharmaceutical companies, Chongqing Qingyang Pharmaceuticals, with a fine of 4.393 million RMB (USD 68,000), or 3 percent of its 2013 revenue, for abusing its market dominance. After investigation, the Chongqing AIC found that Chongqing Qingyang Pharmaceuticals had stopped supplying allopurinol ingredients to its distributors and other manufacturers of allopurinol for half a year in order to raise the prices of the ingredients and increases its share of the allopurinol market.

It is worth noting that, NDRC recently published in its journal an article outlining the key antitrust enforcement priorities in 2016. According to the article, in product-related areas, NDRC will closely focus its supervisions on pharmaceuticals, medical devices, auto parts, as well as industrial materials in the future.

Important Legislation Updates in 2015 in Pharmaceutical Sector

Open the market to Foreign Investors

In China, foreign investment must conform to the national industrial policies. The Guideline Catalogue of Foreign Investment Industries (revised in 2015) (“Catalogue of Foreign Investment”) provides the entry requirements and restrictions for foreign investment in various industries. The Catalogue of Foreign Investment divides specific industries into “encouraged”, “restricted” and “prohibited” categories while those that are not listed in the Catalogue of Foreign Investment are generally permitted for foreign investment.

Before the Catalogue of Foreign Investment was revised in 2015, pharmaceutical manufacturing sectors fall into all three categories mentioned above, which means foreign investment in some of the pharmaceutical manufacturing sectors are “encouraged”, while some of the others are “restricted” or “prohibited”. However, in the most recent version of Catalogue of Foreign Investment, all pharmaceutical manufacturing sectors that previously fall into ‘restricted’ categories were totally removed. Except for the sectors that fall into “prohibited” category, all other pharmaceutical manufacturing sectors are now permitted or “encouraged” to foreign investments. This revision opens most of the Chinese pharmaceutical market for foreign investors, and we would surely expect an upward trend in the number and portion of the foreign investment into this market.

Remove Maximum Price for Most Drugs

Regarding the drugs’ pricing, the Chinese government supervised the drugs by fixing the maximum retail prices. Article 55 of the China’s Drug Administration Law states that business operators shall observe the regulations stipulated by the responsible department of price control of the State Council, such as NDRC.

The above regulatory pricing control has been reformed. On 4th May 2015, NDRC, the National Health and Family Planning Commission (“NHFPC”), the Ministry of Human Resources and Social Security and some other departments jointly published an announcement on issuing the Opinions on Promoting Drug Pricing Reform (“Opinions”). This document removes government pricing controls for most drugs (with the exception of narcotics and type I psychotropic drugs) from 1st June 2015 onwards. After the removal, the drug prices will instead be formulated by the market through different means according to the principle of administration by classification. On the same day, NDRC published the Notice regarding the Strengthening the Supervision and Administration on Pricing of Drugs (“Notice”) which concerns a range of specific issues on the supervision over drug price, including launching special inspections into illegal conducts under the Price Law and the AML. Both the Opinions and the Notice cover the issue of reforming the drug pricing mechanism and reinforcing comprehensive supervision over medical expenses and prices.

We understand that at least partly due to the previous implementation of mandatory ceiling price, the Chinese antitrust authorities rarely punish pharmaceutical companies for excessive pricing under the AML. However, after the reform, since the maximum price for most of the drugs are removed, pharmaceutical companies would be more susceptible to excessive pricing challenges, which just falls within one of  NDRC enforcement priorities.

Conclusion

The pharmaceutical sector has been under close scrutiny by antitrust enforcers globally as well as in China.

The legislative revision enables the Chinese pharmaceutical market to be more accessible to foreign investors, which may accordingly intensify the competition in the Chinese market. The removal of ceiling prices for most drugs may also lead to more intensive competition in the Chinese market since fewer restrictions from the government would encourage undertakings to freely compete. The freedom, however, may conversely expose pharmaceutical companies under the AML enforcers’ surveillance. Chinese AML enforcers would always keep an eye on pharmaceutical companies, especially those with certain level of market powers. Pharmaceutical companies should be cautious regarding their business decisions and behaviors, and conduct routinely antitrust internal compliance review to avoid any possible AML violations.

Biosilimar Products in Chile. Technical Rule N° 170.

Introduction

In conformity with the Health Decree N° 3 (the Decree) that contains the Chilean Sanitary
Regulation, pharmaceutical products can be marketed in Chile only upon securing a sanitary registration with the Regulatory Agency, the Chilean Health Institute (ISP). This Regulation establishes three different procedures for the registration of pharmaceutical products. First, an ordinary procedure where applicants are to support the applications with full scientific data demonstrating the safety and efficacy of the products.

Second, a simplified procedure whereby applicants can make reference to an earlier registered product containing the same active principle, in the same amount per pharmaceutical form and the same way of administration. In this procedure the applicant is exempted from the obligation of presenting some safety and efficacy data, in which regard it can rely on the information provided by the product of reference.

Finally, there is also a summary procedure which applies only under exceptional circumstances, when distribution of the pharmaceutical product is needed in order to deal with public health concerns.

The Decree defines a pharmaceutical product in broad terms so as to include within its scope chemically synthesized and biological products without any distinctions.

The Decree defines a biological product as that one which production involves living organisms and among this category it includes biotechnological products.

Furthermore, the Decree specifies that the simplified procedure is not available for biological products.

Finally, the Decree also states that in the case of biotechnological products the Ministry of Health was to issue a technical rule establishing the requirements of a simplified procedure for biotechnological products, including a list of products of reference available at the time of issuance. Following this mandate, the Ministry of Health issued Technical Rule N° 170 (Technical Rule), which came into force upon its publication in the Official Gazette of September 6, 2014.

Main Features Of The Technical Rule.

This Technical Rule sets out the legal pathway for the registration of biosimilar in Chile, and its basic features are the following:

  • SCOPE OF APPLICABILITY

    The Technical Rule refers only and exclusively to a particular kind of biological products, this is, biotechnological products. Accordingly, this Technical Rule and in particular the dispositions that establish the possibility of abbreviating safety and efficacy information, are not available for other kinds of biological products such as vaccines, serum, antibiotics,  which must follow the ordinary procedure for its registration.

  • SUBJECT MATTER OF THE TECHNICAL RULE.

    This Technical Rule regulates the following subject matters:
    i) The general requirements that should be fulfilled by biotechnological products to
    demonstrate quality, safety and efficacy.
    ii) The conditions that biotechnological products should meet in order to abbreviate
    the safety and efficacy information when seeking sanitary registration.
    iii) The requirements of quality, safety and efficacy of biotechnological products
    either original or biosimilar.

  • REGISTRATION OF BIOSIMILAR, COMPARABILITY.

    i) Biotecnological product of reference.

    A biosimilar can only declare as product of reference a biotechnical product
    previously registered in Chile under the ordinary procedure. Thus is not possible
    to choose as a product of reference another biosimilar.

    ii) The abbreviation in the studies is only permitted with respect to safety and
    efficacy of the biosimilar.

    It is important to bear in mind that even if the biosimilar can abbreviate some safety and efficacy studies that demonstrates comparability with the biotechnological product of reference, it should always comply with all the general requirements and information to demonstrate quality as any other biotechnological product.

    iii) Sequential Analysis.

    The comparability analysis of the biosimilar with the product of reference has a sequential nature, this is, the ISP should first verify that the biosimilar fulfills all the requirements of quality assessing the structural comparability and the process for manufacture of the biosimilar products and those ones of the product of reference, and depending on how complete and satisfactory this comparability analysis is, only then it will be determined which clinical and pre-clinical studies that demonstrates safety and efficacy of the biosimilar can be effectively abbreviated, and to what extent.

    Following every phase of the comparability analysis, the differences with the product of reference should be assessed and if significant, the procedure should be stopped and further prosecution of the application will be performed under the rules of the ordinary procedure.

    The same rationale applies in cases of incomplete applications which should not be further prosecuted under the simplified procedure but under the ordinary one.

    iv) Preclinical and clinical studies to demonstrate comparable safety and efficacy of the biosimilar with the product of reference.

    As a rule, the comparability between the product of reference and the biosimilar should be evidenced with clinical and pre-clinical studies.

    Nevertheless, the Technical Rule also contemplates the option of an alternative
    regime whenever the pharmacokinetics and pharmacodynamics studies are sufficient to extrapolate the efficacy of the biosimilar with respect to a given medical indication, avoiding the need of further clinical studies.

    v) Immunogenicity.

    Every biosimilar must present immunogenicity studies in spite of the fact that it may have already fulfilled all the quality, safety and efficacy requirements that have evidenced its comparability with the product of reference.

    Furthermore, according to the Technical Rule, these studies of immunogenicity comparability should have a minimum duration of one year and should necessarily
    be clinical studies.

  • THE OPTION OF INTERCHANGEABILITY

    In conformity with the Technical Rule a product registered as a biosimilar with the ISP could be interchanged or substituted with the biotechnological product of  reference, provided the interchange or substitution is accomplished through a gradual process and strict medical

    Accordingly, the option of interchanging the product of reference by a biosimilar would be allowed only under the following conditions:

    i) Only with respect to biosimilar registered in conformity with the dispositions of this Technical Rule.

    ii) Only with medical authorization and strict medical surveillance, and within the context of a gradual interchanging process.

    Biotechnological products registered under simplified procedure before the issuance of the Technical Rule, will not have the chance to be interchanged with the products of reference.

  • OPTION OF EXTRAPOLATION

    A product registered as a biosimilar with the ISP for the treatment of a given medical indication may be extra poled to another indication, and in order to grant this permission, the case file of the biosimilar should be reviewed in order to confirm it contains enough information to justify said extrapolation without the need of further studies of comparability, or to the contrary, if said additional studies would be required.

  • UPDATING INFORMATION IN REGISTRATIONS FOR BIOTECNOLOGICAL PRODUCTS
    GRANTED UNDER SIMPLIFIED PROCEDURE BEFORE ENACTMENT OF HEALTH DECREE N° 3

    Before enactment of the Decree, the Chilean Sanitary Regulation was contained in Supreme Health Decree 1.876 of 1995, which established no differences between biological and chemically synthetized pharmaceutical products. Therefore, there are several biotechnological products registered in Chile that did not comply with the requirements of the Technical Rule. In this regard, the Technical Rule only establish that it should be necessary to gradually and progressively ask the owners of said registrations for additional information demonstrating the safety and efficacy and risk/benefit relation of those products, however leaving organization of a calendar and the setting of the requirements and terms of delivery to the Ministry of Health. This resolution still has not been issued by the Ministry of Health, so it is neither clear how the system will operate, nor which  will be the consequences for the companies that do not comply with the presentation of additional information within the terms fixed in that eventual resolution of the Ministry of Health.

    It is likely to assume though, that this resolution will establish a gradual procedure, with different terms for given groups of biotechnological products.

    i) Validity of biotechnological products registered under the simplified procedure of Supreme Decree 1.876. These registrations keep full validity and the said biotechnological products can continue to be commercialized in our country. Notwithstanding the above, as explained, these registrations will neither be interchangeable with their products of reference, nor eligible for extrapolation. In order for any of these products to be entitled to any of these two options, they must complete their dossiers with the additional information due in conformity with the Technical Rule.

  • PHARMACOVIGILANCE

    The Technical Rule establishes that any biotechnological product should present a
    pharmacovigilance program and a risk management plan and both would have to be approved by the ISP.

  • DATA EXCLUSIVITY FOR BIOTECHNOLOGICAL PRODUCTS

    The Technical Rule does not contemplate any dispositions concerning data exclusivity protection for biotechnological products and accordingly this subject matter continues to be ruled by the Law on Industrial Property 19.039 and Health Decree 107. In conformity with these Law and Regulation, biotechnological products that use a new chemical entity, will enjoy a period of protection of 5 years counted as from its registration. It is important to bear in mind that the concept of chemical entity encompasses all kind of active principles, either of chemical or biological origin and accordingly that these data exclusivity rules are fully applicable to both without any distinction.

  • OPTION OF RELYING ON FOREIGN REGISTRATIONS.Finally, the Technical Rule does not establish any disposition allowing the possibility of relying in a sanitary registration granted for a biotechnological product abroad, this is, it is not possible to use as a product of reference one registered with a foreign agency.

CONCLUSION

Even though up until the date of this article no biosimilar registration has yet been granted in Chile, there at least two applications being prosecuted before the ISP, for products that have already achieved registration as biosimilar abroad, so it is likely that we see a similar outcome in Chile. Nevertheless, as the Technical Rule expressly mandates, the process of biosimilar registrations does not allow foreign referencing, which also guarantees the independence of the ISP’s decisions.

The Chilean medical and health community has welcome the issuance of this Technical Rule for it was long ago realized that the inherent complexities of biological molecules made quite difficult to safely establish quality, safety and efficacy similarities between two biological products, with the former regulations that lacked the completeness and strictness of these modern biosimilar rules modelled after the WHO Guidelines.

Complex Regional Pain Syndrome and the Law

Complex Regional Pain Syndrome (CRPS) often rears its ugly head in personal injury cases and can cause issues for lawyers acting on such cases due to the fact that is an injury frequently misunderstood and can be difficult to quantify.

What is CRPS?

CRPS is a condition which is not easily identified and is also not very well publicised. It is, however, an extremely painful condition where sufferers experience persistent, severe debilitating pain which can have an enormous impact on their lives and those around them. It is claimed that doctors are not sure what actually causes some individuals to develop CRPS while others with similar trauma do not. In more than 90 percent of cases, the condition is triggered by a clear history of trauma or injury. The most common triggers are fractures, sprains/strains, soft tissue injury (such as burns, cuts, or bruises), limb immobilisation (such as being in a cast), or surgical or medical procedures (such as needlestick).

The most common symptoms of CRPS to be vigilant for include:-

  • A burning intense stabbing pain / it can also be described as a cold pain
  • Experiencing pain from the lightest of touches – the medical term for this is allodynia ( an example is experiencing a painful reaction from something that you would not normally expect to cause pain, such as stroking the skin with a feather )
  • An extreme pain reaction to painful stimulation – the medical term for this is
  • Continued intense pain after injury where you normally would have expected to make a full recovery
  • Abnormal swelling in the area affected ( the medical term is oedema )
  • Skin Colour Changes / a mottling appearance to the skin
  • Excessive sweating in the affected area
  • Abnormal nail and / or abnormal hair growth
  • Abnormal skin temperature in the affected area ( where one side of the body differs by more than 1% to the other )
  • Joint tenderness / stiffness
  • Restricted or painful movement
  • Cracked / grooved / brittle nails
  • Tremors and muscle spasms ( the medical term is dystonia )

It is recognised that there are 2 types of CRPS:-

Type 1 (RSD)

Where the symptoms come on after a trauma / injury to the affected area but where there is no actual damage to the nerves. This is the most common form of CRPS and accounts for the majority of diagnosed CRPS cases.

Type 2 (Causalgia)

This comes on after a distinct injury to the nerve. This is a rarer form of CRPS. Type 2 symptoms tend to be more painful and difficult to control.

What types of injuries are most likely to cause CRPS?

  • Cuts from knives / lacerations in the catering industry / meat production / abetoirs
  • Injuries where hands or feet become crushed or trapped on machinery /equipment
  • Injuries where hands / fingers are crushed by closing doors / doors being obstructed
  • Injuries where fingers become trapped in machinery / equipment resulting in finger amputation
  • Injuries involving power tool either, causing electrocution or lacerations to fingers / the hand which sever tendons / cause nerve damage
  • Any other type of laceration injury caused by handling objects with sharp / rough edges / glass
  • Any injuries resulting in fractures to the fingers / hands / wrist / feet which require surgery to repair ( where nerves may be affected ) or a long period of immobilisation in a cast

How are injuries which result in CRPS valued?

Contrary to some old fashioned theories, which have attributed CRPS as a psychological disorder, research has demonstrated that CRPS is a physical disorder. History shows that tactics employed by Defendants to discredit Claimants include accusing them of malingering, in other words exaggerating their claim for financial gain or that they are suffering from a form of a psychological disorder such as a somatoform disorder or hysteria.

In the past, matters were not helped by the fact that Chronic pain conditions, including CRPS were included in the Chapter on Psychiatric and Psychological Damage in the Judicial College (formerly the JSB) Guidelines. The assignment of Chronic Pain as a Chapter in its own right for valuation of damages in the JC Guidelines 11th Edition 2012 reflected a sea change in the classification of Chronic Pain conditions including CRPS which are now recognised as serious injuries in their own right in the publication by the Judicial College. CRPS has thankfully also been afforded its own subcategory within the chapter on Chronic pain, which helpfully gives guidance to the judiciary, Claimant and Defendant Solicitors alike.

The Chronic Pain Chapter in the latest 13th edition of the JC Guidelines provides the following helpful factors to take into account when considering the value for an award of damages for a Chronic Pain Condition including:

  1. the degree of pain experienced;
  2. the overall impact of the symptoms (which may include fatigue, associated impairments of cognitive function, muscle weakness, headaches etc. and taking account of any fluctuation in symptoms) on mobility, ability to function in daily life and the need for care/assistance;
  3. the effect of the condition on the injured person’s ability to work;
  4. the need to take medication to control symptoms of pain and the effect of such medication on the person’s ability to function in normal daily life;
  5. the extent to which treatment has been undertaken and its effect (or its predicted effect in respect of future treatment);
  6. whether the condition is limited to one anatomical site or is widespread;
  7. the presence of any separately identifiable psychiatric disorder and its impact on the perception of pain;
  8. the age of the claimant;
  9. prognosis.

The guidance does identify the potential link with an identifiable psychiatric disorder and its impact on the perception of pain as a factor to be taken into account, but it is very clear that this is just one of the multiple factors to consider and take into account when dealing with a claim for Chronic pain. This is a welcome step for many injured people who struggle to come to terms with some of the defences raised by some Defendants that there pain is purely a psychological condition.

It is well recognised, however, that many people suffering from Chronic Pain conditions, particularly CRPS can experience psychological symptoms and recognised psychiatric disorders. This can be because living with a long term pain condition can be very distressing and can cause depression and anxiety. Accessing psychological treatment and support can be extremely beneficial to people caught in a cycle of chronic pain. Individuals have described the real benefits of cognitive behavioural therapy treatment to help them come to terms with their injury, their pain and to teach them coping strategies to help manage the pain.

In order to be able to fully assess the likely value of a Claimant’s general damages award for CRPS, given the multiple symptoms and overlap between different specialist areas of medical expertise, it is good practise to instruct a multi-disciplinary team of experts to examine a Claimant to arrive at an accurate diagnosis / prognosis of the injuries and recommended package of treatment which might (depending on the nature of the symptoms) require opinions from the following:-

  • Consultant in Pain Medicine
  • Orthopaedic Consultant
  • Rheumatologist
  • Neurologist
  • Psychiatrist
  • Occupational Therapist

Depending on the range of symptoms, reference should then be made to the orthopaedic injuries sustained, psychological injuries and the CRPS pain symptoms for each relevant chapter of JC Guidelines with some discount applied for overlap of symptoms.

What can lawyers do to assist with accessing treatment for a Claimant with CRPS?

Experts recognise that a dedicated multi-disciplinary pain management programme can have enormous benefits in rehabilitating a client with a chronic pain condition.

A collaborative approach, working together with Defendants to access clients a combined package of quality multi-disciplinary treatment is the preferred approach as it is proven that the earlier a sufferer of chronic pain can access a pain management programme, the better the outcome is likely to be.

The package of treatment might include:-

  • prescribed pain relief medication
  • physical rehabilitation – including input from occupational therapist and physiotherapists with
  • psychological support
  • the fitting of a spinal chord stimulator( in some severe cases where other methods of pain control do not work ) – this is where a device is surgically implanted which uses electric currents to control and manage the pain

Some people are fortunate to be able to access this treatment on the NHS. However not all recommended pain treatments are widely available on the NHS and in some instances there may be lengthy waiting lists. In these circumstances, funding from Defendants to assist a Claimant to access the treatment they need at an earlier stage can be of real benefit.

Also many professionals, who are injured and do want to continue working find that it is easier to access the treatment privately so this can be arranged at a convenient time for them which will not impact on any time off work.

A Guide to the Smoke and Carbon Monoxide Alarm (England) Regulations 2015

The Smoke and Carbon Monoxide Alarm (England) Regulations 2015 came into force in the UK on 1st October 2015 with very little publicity. The regulations introduce new safety standards in all privately rented properties when it comes to preventing death by carbon monoxide poisoning from solid fuel appliances as well as preventing fires breaking out. As part of Co Awareness week, expert Lawyer Gavin Evans of Simpson Millar Solicitors provides an outline of the dangers of Carbon Monoxide poisoning and emphasises why recent regulatory changes have been essential and why further change is still needed.

What has changed?

As of 1st October 2015, Landlords are now legally obliged to fit a CO alarm in every room where there is a solid fuel appliance and a smoke alarm on every storey of the rented property. Even though the regulations only cover solid fuel appliances, the government strongly recommends in accompanying guidance notes that it is good practice for a landlord to fit a CO alarm in every room as well where there is a gas appliance so that will include rooms where there is a boiler / gas cooker / hob / gas fire.

Why have these new regulations been introduced?

Carbon Monoxide is known as the ‘silent killer’ because it’s almost impossible to detect its presence without some kind of an alarm. Carbon Monoxide cases are frequently in the news. Amongst others, over the course of the year, it has been reported that:

  • Every year in the UK, the NHS claims over 200 people go to hospital with suspected carbon monoxide poisoning, which leads to around 40 deaths. In addition there are thought to be many missed cases where a diagnosis is not made as people have not been aware there symptoms have been caused by CO.
  • Over the past year, it has been reported that 1 in 10 Scottish adults suffer carbon monoxide poisoning in their home, according to research conducted with 2000 UK homeowners.
  • After a US study, it was reported that people who live within six miles [of an airport] have higher levels of asthma and heart problems, which has suggested exposure to carbon monoxide from planes may impact on health.
  • The potential for carbon monoxide (CO) poisoning in homes using solid and multi-fuel stoves is being highlighted by OFTEC, after what it describes as “an increasing number of incidents across Northern Ireland this year.
  • Following a rise in the sale of stoves in recent years, the association said that many people do not realise the connection between CO and fossil fuels. The skipper of a fishing boat featured in the BBC television series Trawlermen was fined £20,000 after entering a guilty plea in the on board death of one of his crew. The crewman died having never regained consciousness, and the cause of death was recorded as carbon monoxide poisoning.
  • A pensioner couple were found dead in their bed and police have been investigating whether the pair died as a result of carbon monoxide poisoning, with neighbours claiming the odourless gas may have leaked from their heating system.
  • A young mother died during her first night in her new home after being overcome by carbon monoxide from a faulty fireplace. Kimberley Jones, 25, suffocated while sleeping on a makeshift bed in the living room of the property in Cwmbach while decorating.

According to Stephanie Trotter OBE, the President and Director of CO-Gas Safety, a large number of people have “very limited knowledge about the dangers of CO exposure and how to prevent it. CO cannot be detected using human senses. Sadly most people are also unaware of just how quickly CO can kill – less than 2% of CO in the air can kill in between one and three minutes.”

What do the new regulations mean in practice?

Government guidelines cite that:

  • The CO alarm be positioned at head height approximately 1 – 3 metres away from the fuel source.
  • Batteries are fitted and working. Landlords are responsible for checking from the first day of the tenancy but the tenant is responsible thereafter. Batteries should be checked monthly. If they are not working, the landlord is responsible for supplying replacement batteries.
  • If there are gas appliances in the property, the landlord is obliged to have them serviced and inspected annually by a Gas Safe registered engineer. It is also their responsibility to supply tenants with a copy of the certificate.
  • The landlord has a duty to service all gas appliances and to have any chimneys swept annually. When fuels burn, carbon monoxide is a by-product of the combustion and is released into the chimney. The purpose of the chimney is to remove these deadly fumes from the living area. If there is a blockage, the room will not be adequately ventilated and the carbon monoxide will not be able to escape out of the chimney. The Guild of Master Chimney Sweeps recommends that all chimneys servicing gas appliances need to be cleaned annually.

Gavin Evans commented: “The new regulations unfortunately do not go far enough as far as carbon monoxide is concerned. They only apply to private landlords and only apply to solid fuel appliances. Solid fuel appliances only account for 8.6% of the problem – that leaves gas appliances unregulated (although the regulations do recommend that landlords fit CO alarms where gas appliances are installed too, this is not mandatory under the new regulations). Only 1.2% of all deaths in private rented properties in the UK have originated from solid fuel appliances. Much more needs to be done by both the UK government and the EC, but this appears unlikely given that there is very little pressure being put on the UK government and the EC to do anything about it.”

What happens if landlords don’t comply with the new legislation?

A breach could see a fine of up to £5,000 per property handed to non-compliant landlords. It will be up to the local housing authority to police compliance with the legislation and they can also hand out remedial notices to landlords who haven’t made the change.

Gavin Evans concluded: “It is a ‘Catch-22’ situation: because CO poisoning is very hard to identify and diagnose, there are very few reliable statistics on the levels of CO-related poisoning and CO-related deaths. This lack of data is then used by the government to justify not making any further changes to the law. The charity CO-Gas Safety has however accumulated its own comprehensive data over the last 19 years which demonstrates that there have been 677 deaths from CO poisoning and over 4,700 ‘near-misses’ or injuries from CO poisoning in that time. Many such cases are never diagnosed or recognised, however, so the real problem is much more serious.”

Access to justice in clinical negligence cases … What access? What justice

The Government’s proposal to introduce a fixed costs regime for clinical negligence claims of up to £250,000 will almost certainly strike the death knell for access to justice for many negligently injured patients.

It had previously been assumed that fixed recoverable costs were only being considered for cases where damages are awarded up to £100,000. However, it is now proposed that the new fixed recoverable costs would apply to all cases in which the letter of claim is sent on or after 1 October 2016.

Health Minister Ben Gummer claims to want to reduce the £259m bill for legal fees which the NHS paid out over clinical negligence claims in 2013/14. He said: “Unscrupulously, some lawyers have used patient claims to load grossly excessive costs onto the NHS and charge far more than the patient receives in compensation.” This is unfair and potentially misleading.

While there is no denying that in some clinical negligence cases, the costs payable to the patient’s lawyers exceeds the level of compensation which the patient receives, there are key reasons why this is the case.

Clinical negligence cases are complex and it is a very specialised area of law. Each case is unique and presents difficult and challenging issues. Patients’ medical records are often extensive and require careful review. In addition, multiple reports from a number of experts in different, specialist fields are often required.

For example, I am currently dealing with a case on behalf of the widow of a 70 year old man who died as a result of alleged clinical negligence. His medical history is complex and includes previous surgeries to his heart and spine. Expert evidence has been required from an A&E specialist in relation to breach of duty and a Neurosurgeon, Radiologist, Intensive Care consultant and a Cardiologist regarding causation and loss.

In addition, the burden of proof is on the Claimant to establish breach of duty (that a negligent act or omission has occurred), causation (that the breach of duty has been causative of a worsening or deterioration in a patient’s outcome or condition) and the extent of the losses sustained. These highly complex cases require solicitors with many years of practicing experience in this area to ensure that the issues are properly investigated.

It is very difficult to see how a ‘one size fits all’, fixed cost regime can successfully work in this highly specialised area of law.

NHSLA conduct

The Department of Health’s criticism of the NHS’ legal bill makes no admission of the part it has played in driving up costs. Nearly all clinical negligence solicitors will have been faced with the situation where exhaustive attempts have been made to resolve a claim by way of negotiation prior to the commencement of Court proceedings but the NHS Litigation Authority (NHSLA) has steadfastly refused to make any admissions or entertain any offers of a settlement.

More often than not, it is only after Court proceedings have started but before the claim reaches the stage of a final trial, the NHSLA makes concessions and offers and the claim is ultimately resolved. In these situations, the costs are inevitably many times higher than they would have been, or indeed should have been, had sensible attempts to resolve the claim been made prior to the commencement of Court proceedings.

I recently dealt with a case where prior to Court proceedings commencing, an offer was made on behalf of my client to the sum of £25,000. However, the offer was rejected and liability denied in full. Shortly after the exchange of expert reports, an offer was made on behalf of the NHSLA which resulted in the claim being settled for £17,500 (some 18 months after my client’s initial offer). The delay in settlement resulted in estimated additional costs of more than £100,000 – including legal fees, expert fees, Court fees, VAT, etc.

Yes, the costs were high, but what choice did my client have? She had to prepare her case on the assumption that it would ultimately be decided by a judge.

It is also worth pointing out that some cases would be avoided entirely if the hospitals and Trusts concerned were more open and honest about mistakes. Clinical negligence lawyers are often regarded as the option of ‘last resort’ by patients and their families ground down by NHS Trusts’ own complaints process and who are often still none the wiser on what went wrong and why.

An elderly female client of mine suffered a heart attack during a routine gastroscopy. After nearly three years, including two dispute resolution meetings, she is still in the dark and has been left with little option but to instruct a lawyer to try and get to the bottom of what happened to her.

Managing costs

There is already in place a robust assessment system to ensure that the NHSLA does not have to pay costs they consider to be ‘excessive’. Patients who receive compensation are only entitled to the payment of ‘reasonable’ legal costs. If agreement is not reached between the parties, these costs are assessed by a judge to determine what the NHSLA should pay.

Since 1 April 2013, the costs of pursuing claims are subject to much greater scrutiny from the Courts who are obliged to proactively manage the legal costs that the Parties to a dispute can incur. In every case, the Court will make a Costs Management Order recording the level of costs that the Court considers reasonable and proportionate. The Court must take into account the value of the claim. If the costs recorded in the Costs Management Order are exceeded then they are not recoverable from the other Party.

To sum up, patients who’ve suffered due to clinical negligence can be left physically disabled, mentally traumatised or unable to work through no fault of their own. In my view, it is only right and fair that they have access to justice and can pursue a claim for compensation to enable them to get the care and support they need.

Clinical negligence lawyers play an important role in helping to improve standards in medical practice and in ensuring that lessons are learned where entirely avoidable mistakes have occurred. If it is no longer viable for injured patients to have their potential claims properly investigated, then it is highly likely that more mistakes will happen and standards in medical practice will fall.

Clinical negligence lawyers will be keenly awaiting the launch of the Government’s formal consultation in the autumn to make their views heard. It remains to be seen if this will make a difference but if the Government is serious about reducing legal costs in clinical negligence cases, alternative options must be considered.

Branding of Pharmaceuticals and Medical Devices: What You Need to Know about the Latest Developments in Canada

The pharmaceutical regulatory field in Canada has seen a host of legislative and administrative developments in recent months. Many of the changes were introduced to provide Canada’s drug and health product watchdog, Health Canada, with greater powers to deal with public health risks associated with drugs and other health care products currently on the market or to be introduced to the market in the future. If you or your client manufactures, markets and/or sells pharmaceuticals (whether brand or generic), medical devices or other health care products in Canada, it is important to be apprised of two recent developments and their potential impact on your client’s business.

The first development is Health Canada’s revised guidance on the Look Alike Sound Alike policy for brand names for pharmaceuticals, released last month. Although the guidance clarifies the drug name approval process at Health Canada aimed at reducing medication errors, the revised process is more onerous on manufacturers and requires more detailed information to be provided to Health Canada. The second development is the enactment of Vanessa’s Law, which amends the Food and Drugs Act to give the Minister of Health expanded powers to assess the post-marketing safety risks of pharmaceuticals and medical devices and their associated advertising and marketing. This article examines the impact of both of these developments in the Canadian pharmaceutical regulatory field and recommends how best to brand and protect pharmaceuticals and medical devices in view of these changes.

  • Drug Brand Guidance: Look Alike Sound Alike Policy

In Canada, the importance of a pharmaceutical’s brand name goes well beyond its role in a successful marketing campaign. It is one factor, amongst many, that Health Canada assesses as part of the comprehensive safety and efficacy review in the regulatory approval process.

In order to sell a drug on the Canadian market, the manufacturer (or “sponsor”) must obtain a Drug Identification Number (“DIN”) and a Notice of Compliance (“NOC”) for the product. The Food and Drug Regulations outline the requirements to obtain a DIN and NOC, and also mandate submissions concerning the safety implications associated with the proposed brand name for the product[1]:

(o) in the case of a new drug for human use, an assessment as to whether there is a likelihood that the new drug will be mistaken for any of the following products due to a resemblance between the brand name that is proposed to be used in respect of the new drug and the brand name, common name or proper name of any of those products:

(i) a drug in respect of which a drug identification number has been assigned,

(ii) a radiopharmaceutical…in respect of which a notice of compliance has been issued under section C.08.004 or C.08.004.01, and

(iii) a kit…in respect of which a notice of compliance has been issued under section C.08.004 or C.08.004.01.

If Health Canada determines that a proposed drug name has similarities and is likely to be confused for the brand name, common name or proper name of another health product, Health Canada has the discretion to refuse to issue a DIN or a NOC. Although the Food and Drug Regulations stipulate that an assessment of the potential causes of confusion must be conducted and submitted, nothing more is provided on the matter. To give direction, Health Canada introduced in 2006 an administrative statement of its policy on brand names for pharmaceuticals. The Guidance, formally called the “Guidance Document for Industry – Review of Drug Brand Names” but more commonly referred to as the “Look Alike Sound Alike” (“LASA”) Guidance was revised in July 2014.[2] On June 13, 2015, the revised LASA Guidance came into effect.

The LASA Guidance applies to proposed brands for drugs for human use (whether innovator or generic), including biologics, pharmaceutical prescription drugs, radiopharmaceuticals, kits, drugs sold directly to professionals for professional use (e.g., anaesthetics), and drugs sold to the public with the intervention of a healthcare professional (e.g., insulin). The Guidance currently does not apply to submissions for non-prescription over-the-counter drug products or natural health products, but Health Canada expects to produce brand name assessment guidelines for these products in the future.

The purpose and aim of the LASA Guidance is to prevent medication errors resulting from misleading or confusing product names. Medication errors related to confusing names can occur at several points along the path from prescriber to patient, including: prescribing errors, transcription errors, dispensing errors, administration errors and self-selection errors. The result of these errors is that the patient receives the wrong medication potentially depriving them of the intended therapeutic benefit, or resulting in serious harm from contraindications or adverse effects.

The revised LASA Guidance provides sponsors with direction on the processes to be followed and information to be submitted to Health Canada as part of the brand name assessment. Although the revised Guidance is more onerous than in the past and requires more detailed information, it is essential that the sponsors comply with Health Canada’s requirements since failure to satisfy the naming requirements will bar regulatory approval.

  • Assessment by Health Canada of Brand Name

The first step of the brand name review process outlined in the LASA Guidance is an Initial Brand Name Review, which is conducted by Health Canada, not the manufacturer/sponsor. However, it is recommended that sponsors review the criteria for the Review prior to conducting the assessment of the proposed brand name to Health Canada. There are seven factors that are considered:

  1. Does the name/modifier suggest/imply an unsubstantiated unique effectiveness/composition, superiority claims, exaggerated product efficacy, broadening product indication or minimizing the risk of the product (e.g., making superiority claims such as ‘CureAll’)?
  2. Does the name/modifier include or imply an ingredient that is not included in the drug product?
  3. Is the name identical to an authorized product in Canada containing a different medicinal ingredient(s) (e.g., ‘Podium’ contains the medicinal ingredients ‘XY’ and a sponsor proposes the identical name ‘Podium’ for medicinal ingredient ‘Z’)?
  4. Does the proposed name contain a letter sequence/stem that is in the same position designated by USAN (U.S. Adopted Name) or INN (International Nonproprietary Name) for the same or different pharmacological/chemical trait?6,7,8
  5. Does the proposed brand name contain or suggest an exclusive composition of only one ingredient in a multi-ingredient product?
  6. Does the name suggest an unsupported route of administration or dosage form?
  7. Does the name conflict with Schedule A of the Food and Drugs Act[3] (e.g., DiabeticCareTM Acetaminophen Tablets)?

An affirmative response to any of the above questions will result in an automatic rejection of the proposed name. Additional factors are considered by Health Canada, however they will not result in an automatic rejection. These include, for example, whether the proposed brand name is the same or similar to a name for a product no longer on the market, or whether part of the proposed brand name represents or implies a medical or scientific term or acronym.

(b)       Assessment by Sponsor of Brand Name

If the proposed name passes the Initial Brand Name Review, the sponsor is required to conduct a LASA brand name assessment. This assessment is the responsibility of the sponsor to conduct. It is a comprehensive, multi-step review of the proposed brand name which assesses the likelihood that the proposed brand name will be confusing with the names of approved drug products. The process consists of three steps: search, simulate, and synthesize.

i) Search

This first step involves a search of the Drug Product Database[4] and the Licenced Natural Health Products Database.[5] The search query will compare the proposed name against the database according to orthographic and phonetic similarities. Results of the searches are listed according to a computed similarity score and results scoring 50% of higher are to be included in the sponsor’s submissions to Health Canada. If the proposed brand name is already marketed in another country, addition searches are required. For sponsors considering a potential brand name, it is important to search the Drug Submission Tracking System for pending submissions.

ii) Simulate

The simulate step consists of simulation experiments to assess the confusability of the proposed name by using the name in a variety of prescribing, transcribing, dispensing and administration scenarios. The sponsor must consider the world in which the drug associated with the proposed brand name will exist and conduct simulations against this. For example, the drug may be used in the hospital setting, therefore the sponsor must detail every step of the process by which the drug gets to patient and conduct simulations against this. Some drugs would have more complicated routes than others (e.g., oral prescription drug vs. drug for injection by emergency physician) or have multiple routes (e.g., oral prescription drug in hospital and community). The sponsor must conduct at least five simulations, which altogether, involve at least one hundred healthcare professionals.

iii) Synthesize

The sponsor’s final step in the LASA assessment is to synthesize the results from the search and simulate steps by completing a failure mode and effects analysis (“FMEA”). As a preliminary step, the sponsor must consider the names generated in the search and simulate steps for their inclusion or exclusion from the FMEA. The sponsor must then provide rationale for the inclusion or exclusion of each name.

The FMEA is an analysis conducted by a panel of various health care professionals, each representing an individual who would be involved in the delivery of the drug at issue. The panel considers the drugs names from the search and simulate steps that were included by the sponsor against the process maps developed in the simulate step. The principal consideration is determining what can go wrong in the case of a medication error (i.e. failure modes) and the effects. The FMEA panel is also required to answer various questions addressing the effects of the potential confusing drugs, the effects of omitting the proposed drug, the effects of administering the wrong drug therapy, and the effects of combined drug therapy.

Once the results of the complete LASA assessment are submitted to Health Canada, it will review the submissions and decide on the acceptability of the proposed name. Health Canada can request further information or material (including raw data) or make its own inquiries. If a proposed drug brand name is rejected by Health Canada, the sponsor can submit an alternative name for review[6], use the proper/common name alone, or seek to formally reconsider the decision of Health Canada if it results in a withdrawal notice.

Given the more stringent and involved brand name approval process in Canada, it is recommended that innovator and generic companies consider the LASA Guidance well in advance, and preferably at the time of choosing and clearing a brand, in order to avoid unnecessary delays or unfavourable results. It is also recommended that pharmaceutical companies that perform global development and testing processes with respect to proposed brand names include Canadian respondents and give consideration of the use of the product in Canada. Otherwise Health Canada is unlikely to consider (or give sufficient weight) to the brand name assessment completed in another jurisdiction. Alternatively, the sponsor may be asked to conduct an additional assessment to reflect the Canadian context, which both delays the approval process and incurs more expense. Sponsors should also have regard to non-name attributes, such as formulation, strength and indication, when considering the use of a performance study from another jurisdiction for the purposes of the Canadian brand name approval process.

  • Vanessa’s Law – Increased Oversight of Drugs and Medical Devices

The second key development in Canada is the Protecting Canadians from Unsafe Drugs Act (Vanessa’s Law), which received Royal Assent in November 2014, but has not yet come into force. Through amendments to the Food and Drugs Act, Vanessa’s Law aims to further protect the Canadian public from the risk of injury from “therapeutic products” (defined as a drug, device, or any combination of drugs and devices) currently on the market. Overall, the law provides the Minister of Health with greater powers to assess and manage risks associated with drugs and medical devices. Much debate around Vanessa’s Law concerns the newly created powers of the Minister to compel any information from sponsors (including confidential business information, which is defined to include information that has actual or potential economic value to competitors, or the disclosure of which would result in material financial loss) and the power to disclose the confidential business information without notice to, or consent from the person to whose business or affairs the information relates. Although these powers are to be employed only where a drug or device “may present a serious risk of injury to human health”, the potentially far-reaching and invasive nature of the amendments are controversial.

Vanessa’s Law will also impact the marketing and oversight of already approved pharmaceutical drugs and devices. First, where the Minister believes it is necessary to prevent injury to health, he or she may compel the sponsor to modify or replace the label or packing of a drug or device. Second, the Minister may order a sponsor to conduct an assessment of the drug or device’s effects on health and safety. While the latter change does not specifically mention the effects of the product’s brand name, this is well-known to be an important aspect of Health Canada’s safety analysis (as described in the LASA Guidance) and is likely encompassed by these new provisions. The Minister may also recall the drug or device at issue in order to respond to a serious or imminent health risk, or seek an injunction. Furthermore, the penalties for contravention of the new provisions can be severe, resulting in some cases in fines up to $5,000,000 and imprisonment for those who contravene the Food and Drugs Act (including Minister’s orders under Vanessa’s Law).

To assist with the implementation of Vanessa’s Law, Health Canada recently released a draft guide titled “Amendments to the Food and Drugs Act: Guide to New Authorities (power to require and disclose information, power to order a label change and power to order a recall) seeking comments.[7] The guide sets out principles to govern all decisions by Health Canada, and covers when, how, and what triggers the Minister’s ability to make use of the powers and explains to whom the powers apply. The guide also contains a non-exhaustive list of elements that should be considered as the starting point for making a determination of “serious risk” of injury.

Conclusion

Successful branding of pharmaceutical products must consider the target audiences (patients, doctors, pharmacists), the associated therapeutic and disease awareness, and the global market in order to achieve greater market share and brand loyalty. Increasingly, the proposed brands of drugs and other health care products are subject to heightened government regulation. This is demonstrated by the recent regulatory changes in Canada, including Health Canada’s stringent new requirements and information disclosure relating to new drug names. As a result, manufacturers must be strategic when it comes to branding and have regard to both the regulatory approval process and the trademark registration process globally, especially in the key jurisdictions. Although the proposed drug name must pass Health Canada’s scrutiny to be used in the marketplace, the review by Health Canada does not grant positive rights to the pharmaceutical manufacturer to stop others who may be using a similar brand name. Therefore pharmaceutical branding must be considered strategically from all angles, including with reference to the recent changes in Canada, starting at an early stage of the brand selection and clearance process. This will ensure timely and successful approval and entry into the market and thereafter.

[1]               Food and Drug Regulations, CRC c 870, C.08.002(1)(o).

[2]               http://www.hc-sc.gc.ca/dhp-mps/pubs/medeff/_guide/2014-review-examen_drug-medicament_names-marques/index-eng.php

[3]               In Canada there are certain diseases, disorders and abnormal physical states for which a food, drug, cosmetic or device cannot be advertised and sold to the public as a treatment, preventative or cure for. Schedule A of the Food and Drugs Act lists the prohibited diseases, disorders and abnormal physical states.

[4]               Available from: http://webprod5.hc-sc.gc.ca/dpd-bdpp/index-eng.jsp

[5]               Available from: http://webprod3.hc-sc.gc.ca/lnhpd-bdpsnh/

[6] A sponsor may submit two brand names for submissions of 180 days or longer.

[7] http://www.hc-sc.gc.ca/dhp-mps/consultation/drug-medic/unsafedrugsact-guide-lesdroguesdangereuses-eng.php

ANDAs on Offense

In the world of U.S. pharmaceuticals, brand drug companies have a strong incentive to sue their generic rivals before generic products hit the market. Other than the obvious economic reasons, pre-launch litigation is built in to the very structure of the Hatch-Waxman Amendments (21 U.S.C. § 355). For an aspiring generic entrant, the promise of a 30-month stay before even the prospect of market entry can be daunting. But there are a few countermoves available to generic companies locked in Hatch-Waxman litigation.

  1. Civil actions to obtain patent certainty. As noted, the Hatch-Waxman Amendments are set up to favor litigation by brand patentees against generic drug companies. The New Drug Application (NDA) holder (the brand) normally will file suit within 45 days of an Abbreviated New Drug Application (ANDA) by a prospective generic market entrant. But there may be countervailing reasons why the NDA holder might want to wait—money, for one, or maximal interference with the generic’s go-to-market plan. If the NDA holder does not sue, the ANDA applicant can file a declaratory judgment claim that the listed patents are invalid or not infringed. As the Federal Circuit explained, “to prevent patentees from ‘gaming’ the Hatch-Waxman Act,” Congress created a “civil action to obtain patent certainty.”[1] Before filing a civil action to obtain patent certainty, however, the generic must offer the brand the opportunity to confidentially review the generic’s ANDA.[2] The civil action to obtain certainty forces the NDA holder to either sue or waive its rights.
  1. Declaratory judgments. But what if the generic is not operating within the strict confines of the Hatch-Waxman Amendments? Regardless of Hatch-Waxman’s civil action provision, Article III of the U.S. Constitution confers jurisdiction over any “case or controversy.” Even if the ANDA does not satisfy all of Hatch-Waxman’s technical requirements, the existence of a request for permission to manufacture an allegedly infringing drug product—and hence the threat of suit by the brand patentee—should be sufficient to trigger declaratory jurisdiction. As far as the Federal Circuit is concerned, a Hatch-Waxman dispute thus is justiciable under Article III any time “(1) the plaintiff has standing, (2) the issues presented are ripe for judicial review, and (3) the case is not rendered moot at any stage of the litigation.”[3]

A brand company can avoid a declaratory judgment claim by unilaterally issuing a covenant not to use. And courts differ on whether there is jurisdiction when the patent in suit has not been identified to FDA as covering the drug sought to be manufactured under the ANDA: Delaware and Eastern Wisconsin say “yes,” New Jersey and the Northern District of Illinois say “no,” and the Northern District of California has ruled that it can exercise jurisdiction, but to date has declined to.[4]

  1. Counterclaim to correct patent information. NDA holders are required to submit “patent information” to FDA. FDA uses this information to inform prospective ANDA applicants of what patents apply to what products. But it lacks both the authority and expertise needed to verify the patent information submitted by manufacturers, so it defers to their descriptions. Normally, a generic applicant has no legal route to challenge erroneous patent information. But if it is sued by the NDA holder, it can file a counterclaim to correct erroneous patent use code information. The Supreme Court has held that the counterclaim provision is designed, in part, to avoid the problem of overbroad patent use codes, which the Court held “throws a wrench into FDA’s ability to approve generic drugs as the statute contemplates.”[5] A successful counterclaim results in an order requiring the NDA holder to “correct or delete” erroneous information.[6]
  1. Patent misuse or antitrust. The first three remedies allow the generic to push back against brand strategies, but do not offer any direct compensation to the ANDA applicant. However, patent misuse or antitrust counterclaims can give the applicant an affirmative claim to assert against the brand plaintiff. If the claim is framed as “patent misuse,” it can invalidate the brand’s patent. If it is framed as an antitrust violation, it may even bear damages.

Patent misuse occurs where a patentee impermissibly broadens either the coverage or the duration of its patent grant with anti-competitive effect. The concept arose to restrain practices that violate public policy by overstating the coverage of a particular patent right. Several cases hold that the submission of inaccurate patent information to FDA can constitute patent misuse.

Similarly, there is case support for the idea that serially listing invalid patents with the FDA violates antitrust law, and that a patentee who improperly lists patents may be subject to defenses that “include unclean hands, unenforceability of the patent for fraud and inequitable conduct, misuse, and delay in filing suit resulting in laches or estoppel.”[7] An antitrust plaintiff can sometimes obtain damages as well as injunctive relief preventing the brand company’s anti-competitive behaviors.

Thus, though a Hatch-Waxman defendant—a generic drug company holding an Abbreviated New Drug Application—is often at a disadvantage in patent litigation, these four counterclaim options can help to level the playing field.

[1] Teva v. Novartis, 482 F.3d 1330, 1342 (Fed. Cir. 2007).

[2] 21 U.S.C. § 355 (j)(5)(C)(i)(III).

[3] Caraco Pharm. Labs., Ltd. v. Forest Labs., Inc., 527 F.3d 1278, 1291 (Fed. Cir. 2008).

[4] Cephalon, Inv. v. Watson Pharmaceuticals, Inc., 629 F.Supp.2d 338, 350-351 (D. Del. 2009); In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Lit., 693 F.Supp.2d 409, 418-419 (D. Del. 2010); Bayer Healthcare LLC v. Norbrook Labs., Ltd., 2009 WL 6337911 (E.D. Wis. Sept. 24, 2009); Abbott Labs. v. Zenith Labs., Inc., 934 F.Supp. 925, 938 (N.D. Ill. 1995); Eisai Co. v. Mut. Pharm. Co., 2007 WL 4556958 (D. N.J., Dec. 20, 2007); Takeda Pharm. Co., Ltd. v. Mylan Inc., 62 F.Supp.3d 1115 (N.D. Cal. 2014).

[5] Novo Nordisk et al. v. Caraco Pharms. et al., 566 U.S. ___, 132 S.Ct. 1670 (2012).

[6] Novo Nordisk v. Caraco Pharms., 688 F.3d 766 (Fed. Cir. 2012).

[7] Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d 1323, 1331 (Fed. Cir. 2001).

China’s Antitrust Regulator Targets Price-related Violations in the Pharmaceutical Sector

In May, 2015, the National Development and Reform Commission (“NDRC”), the Chinese authority in charge of price-related antitrust violations published the Notice on Reinforcing Supervision over Drug Prices (“Notice”). The Notice includes a range of specific issues on the supervision over drug price, including immediately launching special inspections into illegal conducts under the Pricing law and the Anti-Monopoly Law (“AML”).

The Notice aims to implement the Opinions on Promoting the Drug Pricing Reform (“Opinion”), which was jointly published by the NDRC, also the major authority in charge of the State’s medical price reform and other relevant ministries. In China, the medical reform has been carried out for decades. As a major move in this lengthy and continuous reforming process, the NDRC issued the Opinion and the Notice on the same day, both of which cover the issue of reforming the drug pricing mechanism and reinforcing comprehensive supervision over medical expenses and prices.

This article introduces the Notice with a focus on the antitrust issues that may occur in such special inspections, in order to provide advice for antitrust compliance in the pharmaceutical sector.

  1. Current Drug Pricing Mechanism

Since 2000, under the Drug Administration Law and its relevant rules and regulations, the price of the following drugs shall be fixed or guided by the government: (i) drugs listed in the directory of drugs for national basic medical insurance (“Directory”), and (ii) drugs which are not listed in the directory but are manufactured and distributed by a single supplier. More specifically, within the scope of the abovementioned drugs, the government fixes the price of drugs relating to the immunization plans and family planning, while it sets maximum retail prices for the others.[1] By contrast, for drugs that are not listed in the directory, or drugs that are not manufactured and distributed by a single supplier, their prices are set by the pharmaceutical companies. Besides, according to the Notice on Issuing the Regulations on the Centralized Procurement of Drugs by Medical Institutions (2010), all non-profit medical institutions shall participate in the centralized drug procurement plan, and medical institutions and pharmaceutical companies shall carry out drug procurement through the centralized drug procurement platforms established by local governments.

Therefore, for drugs whose prices are guided by the government, their pricing shall be subject to the following restrictions in order to be sold to non-profit medical institutions. First, their prices shall not exceed the maximal resale price, or the so-called “Ceiling Price” issued by the NDRC. Second, the NHFPC organizes the provincial centralized procurement process to determine the bidding-winning price and the hospitals then set the retail price of such drugs within the price increase range in accordance with relevant laws and regulations[2].

Currently, the bid-winning price under the centralized drug bidding process is normally lower than the Ceiling Price set by the NDRC. It suggests that the NDRC’s regulation on the maximal resale price has very limited impact on the actual prices of drugs. Against such a background, it seems to be the right timing to repeal the regulations on the maximal resale price of drugs, and establish a new pricing mechanism for drugs.

  1. Key Points of the Drug Pricing Reform

Ever since 2012, the NDRC has being working on reforming the drug pricing mechanism. After seeking public opinions, the NDRC has now eventually finalized the Opinion. The Opinion has provided the following measures for reforming the drug pricing mechanism: (i) cancelling the maximal resale price restrictions set by the government, except for narcotic drugs and Class I psychotropic drugs; (ii) forming the procedures, bases, methods and other rules for formulating the reimbursement standards for drugs that are covered by medical insurance, and enhancing medical insurance’s function in price control; (iii) establishing a public and transparent negotiation mechanism participated by multiple parties, in order to set prices for patent drugs and drugs produced by a single supplier; (iv) setting the prices through bidding process or negotiation for blood products, which are not listed in the national drug reimbursement list, immunity and prevention drugs that are purchased by the State in a centralized manner, and AIDS antiviral drugs and contraceptives provided by the State for free; (v) for other drugs, the prices shall be set by the pharmaceutical companies.

  • Supervision over Price-Related Conducts in the Pharmaceutical Sector

In order to implement the Notice, the NDRC will launch a six-month campaign against price-related violations in the pharmaceutical sector. The inspection will focus on the prices of drugs for which competition is insufficient and which are particularly used by special patients. In particular, the NDRC will focus on the following conducts which violate the Price Law and the AML:

  1. Fabricating and spreading price increase information, pushing up the prices to an excessively high level, and disturbing the market order;
  2. Colluding with each other to manipulate market prices;
  3. Abusing market dominance by selling drugs at unfairly high price (“excessive pricing”);
  4. Price frauds such as making up cost price, marking false price, offering discount after increasing the price, misleading price marking, hiding additional pricing conditions; and
  5. Other illegal price-related conducts.

Besides, the NDRC will step up efforts to monitor drug prices, particularly on the ex-factory (port) prices and actual purchase prices of drugs over which market competition is insufficient. The Notice mentions that special inspections would be launched in cases where the price is frequently or significantly changed, or cases where the price is significantly different from international prices, price of the same product, or prices from other regions.

In addition, the NDRC encourages the public to report illegal price-related conducts via its national price violation report system.

  1. Suggestions for Compliance of Pharmaceutical Companies

Drug prices, especially the high prices of patent drugs have always been in the spotlight. Partly because of the implementation of mandatory Ceiling Price, the antitrust authorities rarely punish pharmaceutical companies for excessive pricing under the AML. After the reform, since the Ceiling Price for most of the drugs would be removed, pharmaceutical companies will be more susceptible to excessive pricing challenges, which is exactly the focus of the NDRC campaign.

  • Relevant Market

Under the AML, a business operator could be liable for excessive pricing only if it holds a dominant market position, the determination of which depends on the definition of the relevant market. According to the Guidelines on Defining Relevant Markets, the relevant market refers to “the product scope or geographical scope within which an operator participates in competition during a certain period of time with respect to a specific product or service”. The relevant market can be defined by methods such as the functionality test by analyzing the substitutability of products on demand/supply side, or SSNIP test.[3] In the human drug area, the antitrust authorities would take special approach to define the relevant market based on the specific characteristics of drugs. For example, MOFCOM, the Chinese antitrust merger review authority, has adopted the functionality test, and in particular the ATC 3 classification (Anatomical Therapeutic Chemical level 3, i.e. a classification based on targeted symptoms) to define the relevant market.[4] Besides, the SSNIP test generally also plays an important role in defining the relevant market. However, the influence of price change on customers’ choice of drugs is very complicated, because the pricing and purchase process of drugs are subject to governmental regulations, while the customers’ choice on drugs is influenced by various factors such as the doctors’ preference in prescriptions and the payment system under medical insurance. Therefore, various factors shall be taken into account if the SSNIP test is applied to define the market.

  • Dominant Market Position

Dominant market position refers to the position with which business operators would be capable of controlling the prices or quantities of commodities or other transaction terms in a relevant market, or preventing or imposing an influence on the access of other business operators to the market. According to the AML and relevant regulations, various factors, such as business operators’ market share and technical capabilities, shall be considered when assessing the market position. Among those factors, patent is a particularly important one. The pharmaceutical industry relies heavily on patent protection. According to industry study, but for patent protection, 60% of drugs would not have been developed in the first place, and 65% of drugs would not have been clinically applied. Because of patent protection, patent drugs may, to some extent, have certain advantage in the market. But in assessing the market position, it is still necessary to comprehensively analyze all relevant factors, such as the market share of the pharmaceutical company, its financial status, and its controlling power over the channels, etc.

  • Excessive Pricing

Once concluded that the business operator holds the dominant market position, it is necessary to determine whether the drugs are sold at “unfairly high price”. According to the Provisions on Anti-price Monopoly promulgated by the NDRC, factors to consider in determining “unfairly high price” include (1) the price offered by other business operators for the same kind of product, and (2) the cost change of such product, etc. However, the AML and relevant regulations do not provide further details on how to select the benchmark price for comparison. If one only compares the overseas price and the domestic price for the same drug, the result may not be convincing, because the market situation, the regulatory framework and the payment systems are different. Moreover, for patent drugs, the production cost would not be sufficient to demonstrate the actual investment of producers in light that the R&D expense is significant while the production cost is relatively small.

  1. Conclusion

The pharmaceutical sector has been under close scrutiny by antitrust enforcers globally, and pricing in this sector has long been one of the most sensitive issues. Because of the special regulatory provisions and the significant R&D investment, the pricing system of drugs differs from that of other products. In the context of the current State medical and health reform, we expect that more reforming policies would be published in the future, which call for the continuous attention of pharmaceutical companies on antitrust

[1] According to Article 6 of Opinions on Reforming the Pricing Mechanism of Drugs and Medical Service, in the scope of drugs whose prices are regulated by the government, the prices of drugs relating to immunization plans and family planning are fixed by the government, and the prices of other drugs are guided by the government.

[2] According to Article 12 of the Implementation Opinions on Establishing the National Basic Drugs System, in the county (city, or district) where the basic drugs system is implemented, the basic drugs used by basic-level medical institutions shall be sold with zero margins. All local government shall implement relevant governmental subsidy policy. According to Article 14 of the Opinions on Reforming the Pricing Mechanism of Drugs and Medical Service, during the transition period of reforms, the markup percentage of drugs used by medical institutions shall be gradually reduced. The policies regarding markup percentage can be varied depending on the price level but shall be under the maximal rate of 15%.

[3] In the SSNIP test, under the circumstance that a hypothetical monopolist continuously raise the price at a moderate rate during a certain period of time, if sufficient numbers of buyers are likely to switch to alternative products and the lost sales made such price increase unprofitable, then the alternative products and the hypothetical monopolist’s products shall be considered as in the same product market. Otherwise, those two products shall not be considered as in different product market.

[4] See MOFCOM Announcement [2009. No. 77] on its Decision on Conditionally Approve the Acquisition of Wyeth by Pfizer Following Anti-Monopoly Review. Nevertheless, ATC 3 is not the only basis to define the relevant market in the pharmaceutical industry. For example, apart from the ATC 3, the EU antitrust authorities used other methods, such as ATC 4 (i.e. a classification based on curative effects or pharmacodynamics) to define the relevant market.

Leasing companies and banks choose Norway over other Scandinavian jurisdictions for registration of aircraft

Being the only Scan­di­na­vian juris­dic­tion which has rat­i­fied the Cape Town Con­ven­tion, leas­ing com­pa­nies and financiers have dis­cov­ered that the Nor­we­gian Civil Air­craft Reg­istry pro­vides for inter­na­tional secu­rity which is not avail­able in other Scan­di­na­vian jurisdictions.

The Cape Town Con­ven­tion on Inter­na­tional Inter­ests in Mobile Equip­ment of 16 Novem­ber 2001 and its Pro­to­col on Mat­ters Spe­cific to Air­craft Equip­ment (col­lec­tively referred to as the “CTC”) has been rat­i­fied by Nor­way as the only Scan­di­na­vian juris­dic­tion. The CTC is today rat­i­fied by 52 coun­tries, and it entered into force in Nor­way 1 April 2011.

Avi­a­tion finance is a highly inter­na­tional busi­ness, and the mobil­ity of the equip­ment being financed has always raised sev­eral cross bor­der chal­lenges. These chal­lenges relate among oth­ers to dif­fer­ent laws in dif­fer­ent coun­tries regard­ing recog­ni­tion of rights and dif­fer­ent rules relat­ing to insol­vency. Hav­ing the Ster­ling Airways bank­ruptcy in mind, the need for har­monised rules is obvi­ous. When Ster­ling Airways went into bank­ruptcy in Den­mark a few years ago, the repos­ses­sion and export of air­craft from Den­mark turned out to be a lengthy and com­plex mat­ter for leas­ing companies.

Another rea­son for need­ing inter­na­tional rules on recog­ni­tion of rights in avi­a­tion finance is the fact that engines are removed and very often installed on other air­crafts than the one they belong to, and in some instances also being sub­ject to a pool­ing arrange­ment in which sev­eral air­lines may par­tic­i­pate. Engines owned and financed by third par­ties may there­fore be oper­ated by other air­lines in other juris­dic­tions than the one the engines were leased to in the first place. An inter­na­tional regime that pro­tects the rights of the own­ers and the financiers is there­fore key to this industry.

The CTC is the answer to these chal­lenges. Even if it does not pro­vide a solu­tion to all chal­lenges, it is the legal regime which is being embraced by the avi­a­tion finance com­mu­nity. The CTC pro­vides for an inter­na­tional reg­istry in which rights in air­craft and engines may be reg­is­tered. Such reg­is­tra­tion will then be recog­nised and enforce­able in juris­dic­tions hav­ing rat­i­fied the CTC. The inter­na­tional reg­istry is based in Ire­land, but works on a web based solu­tion in which the par­ties make the nec­es­sary fil­ings on line. As opposed to what is pos­si­ble in the Nor­we­gian Civil Air­craft Reg­istry, mort­gages can be reg­is­tered both in the air­frame and the engines separately.

The CTC does also pro­vide for an instru­ment which may give leas­ing com­pa­nies, banks or oth­ers being appointed the pos­si­bil­ity of quickly repos­sess­ing the air­craft, e.g. in case of insol­vency of the air­line to which the air­craft is being leased. Under the scheme of the Cape Town Con­ven­tion, an Irrev­o­ca­ble De-registration and Export Request Autho­ri­sa­tion (IDERA) can be issued, giv­ing a spec­i­fied entity the pow­ers to take the nec­es­sary steps in order to de-register an air­craft from reg­istry. The IDERA needs to be exe­cuted by the reg­is­tered owner of the air­craft, and will also be filed with the Nor­we­gian Civil Air­craft Reg­istry. In case of insol­vency of an air­line, this could be an effec­tive rem­edy as a preap­proved entity, e.g. the financier, has been granted the sole rights of repos­sess­ing the Air­craft, rights which will be acknowl­edged by the Nor­we­gian Civil Air­craft Reg­istry due to the CTC being in force in Norway.

For this rea­son it was reported some time ago that the air­line SAS was forced to move air­craft on oper­a­tional lease agree­ments from other Scan­di­na­vian air­craft reg­istries to Nor­we­gian reg­istry  in con­nec­tion with its restruc­turing process. Hav­ing the air­craft on a CTC com­pli­ant reg­istry does also affect the finance costs in today’s avi­a­tion finance mar­ket. Norway is one of the few countries qualifying for the discount under the Aircraft Sector Understanding (ASU) of OECD export credit agencies. This shows the increas­ing impor­tance of the CTC.