T-2552-97
Nu-Pharm Inc. (Applicant)
v.
Attorney General of Canada and Minister of Health (Respondents)
Indexed as: Nu-Pharm Inc.v. Canada (Attorney General) (T.D.)
Trial Division, Cullen J."Ottawa, October 28 and November 19, 1998.
Food and Drugs — Abbreviated new drug submission (ANDS) — —Canadian reference product— in Food and Drug Regulations, s. C.08.001.1 — Acceptable for generic drug company to submit ANDS for drug X based on comparison with NOC-sanctioned generic drug rather than comparison with —original— drug for which NOC originally granted.
Administrative law — Judicial review — Review of refusal to process applicant's abbreviated new drug submission (ANDS) — Although decision maker highly specialized with advanced expertise regarding safety, efficacy of new drugs, no privative clause in legislation — Standard of review closer to reasonableness end of spectrum than to correctness — Refusal to process ANDS premised on unreasonable, erroneous interpretation of Food and Drug Regulations, s. C.08.001.1(c) which amounted to error of law under Federal Court Act, s. 18.1(4)(c) — Also, decision based on erroneous finding of fact without regard to material indicating drugs identical.
The applicant, a generic drug company, submitted an abbreviated new drug submission (ANDS) for its version of drug X, which it claimed was identical to manufacturer A's drug X. Manufacturer A had obtained a notice of compliance (NOC) for its version of drug X based upon an ANDS which included comparative data showing that manufacturer A's drug X was bioequivalent or pharmaceutically equivalent to manufacturer B's version of drug X. The Director General of the Therapeutic Products Directorate of the Department of National Health and Welfare refused to accept the ANDS because it did not refer to manufacturer B's drug X. The applicant seeks judicial review of that decision.
The issues were whether the Minister committed an error of law by concluding that the applicant's drug was not a "Canadian reference product" as defined in section C.08.001.1 of the Food and Drugs Regulations; whether the Minister committed an error of law by relying upon the possibility of a "compounding effect" (increasing discrepancy where the comparison is not with the original) occurring if the ANDS were processed or the concern that processing the ANDS would declare the applicant's drug as a Canadian reference product as factors to support his refusal to process the ANDS; whether Minister based his decision on an erroneous finding of fact without regard to the material before him by relying on the above factors for refusing to process the ANDS; did the Minister fetter his discretion by refusing to process the ANDS because of an alleged "compounding effect" or a reluctance to declare the applicant's drug a Canadian reference product?
Held, the application should be allowed.
The applicant's drug did not fall within the definition of Canadian reference product in paragraph C.08.001.1(a) of the Regulations. This is based on a simple plain language reading of that provision. Manufacturer A was not an innovator. Manufacturer A's drug X was not a Canadian reference product pursuant to paragraph C.08.001.1(b) because there was no evidence that manufacturer B was no longer marketing its drug in Canada. Under paragraph C.08.001.1(c), a drug that is identical to the innovator's drug, as manufacturer A's drug is identical to manufacturer B's drug X, can be used to demonstrate bioequivalence based on pharmaceutical characteristics when the Minister is satisfied that evidence shows that those characteristics are identical. However, that provision does afford some discretion, as that drug must be "acceptable to the Minister". Therefore, it was necessary to analyse the exercise of that discretion and the Minister's reasoning for denying the NOC.
With respect to judicial review, the trend in recent years has been for courts to show curial deference to the findings of administrative decision makers when those findings are within an administrative decision maker's expertise. In the case at bar, it was the standard of reasonableness which was applicable to the Minister's findings. Despite the fact that it has been held that a court's jurisdiction is much broader on appeal than on judicial review and that the decision maker herein is highly specialized with advanced expertise regarding the safety and efficacy of approving new drugs, the Minister's decision was not immune from review, because Parliament has not included a privative clause in the legislation aimed at eliminating judicial review for errors of law.
In the context of analysing a new drug submission to determine whether to issue a NOC, the Minister's discretion is not unfettered. The Minister made an error of law by concluding that manufacturer A's drug X did not fall within the definition of Canadian reference product under paragraph C.08.001.1(c), based on an unreasonable and erroneous interpretation of that provision. There was no reason for the Minister's policy to use paragraph C.08.001.1(c) only in instances where an applicant seeks to compare the product within an ANDS to a drug marketed outside Canada that is identical to the Canadian reference product marketed in Canada. Finally, the Minister's preoccupation with both the compounding effect and concern for setting a precedent caused him to neglect the most essential factor in this case: that the applicant's drug X was identical to that of manufacturer A. Therefore, the Minister made his decision based on an erroneous finding of fact without regard to the material which indicated that the drugs were identical, and this constituted sufficient grounds for review pursuant to paragraph 18.1(4)(d) of the Federal Court Act. The Minister's refusal was therefore set aside and the matter referred back to the Therapeutic Products Directorate for redetermination based on the foregoing reasons.
statutes and regulations judicially considered
Federal Court Act, R.S.C., 1985, c. F-7, s. 18.1(4) (as enacted by S.C. 1990, c. 8, s. 5).
Food and Drugs Act, R.S.C., 1985, c. F-27.
Food and Drug Regulations, C.R.C., c. 870, ss. C.08.001.1 (as enacted by SOR/95-411, s. 3), C.08.002 (as am. idem, s. 4), C.08.004.
cases judicially considered
applied:
Apotex Inc. v. Canada (Attorney General), [1994] 1 F.C. 742; (1993), 18 Admin. L.R. (2d) 122; 51 C.P.R. (3d) 339; 162 N.R. 177 (C.A.); Apotex Inc. v. Canada (Attorney General), [1997] 1 F.C. 518; (1996), 48 Admin. L.R. (2d) 109; 71 C.P.R. (3d) 166; 123 F.T.R. 161 (T.D.); Dickason v. University of Alberta, [1992] 2 S.C.R. 1103; (1992), 127 A.R. 241; 95 D.L.R. (4th) 439; [1992] 6 W.W.R. 385; 4 Alta. L.R. (3d) 193; 17 C.H.R.R. D/87; 92 CLLC 17,033; 11 C.R.R. (2d) 1; 141 N.R. 1; 20 W.A.C. 241; Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; (1994), 114 D.L.R. (4th) 385; [1994] 7 W.W.R. 1; 92 B.C.L.R. (2d) 145; 22 Admin. L.R. (2d) 1; 14 B.L.R. (2d) 217; 4 C.C.L.S. 117; Bell Canada v. Canada (Canadian Radio-television and Telecommunications Commission), [1989] 1 S.C.R. 1722; (1989), 60 D.L.R. (4th) 682; 38 Admin. L.R. 1; 97 N.R. 15; Dansereau v. Canada (Public Service Appeal Board), [1991] 1 F.C. 444; (1990), 91 CLLC 14,010; 122 N.R. 122 (C.A.); Puerto Rico (Commonwealth) v. Hernandez, [1973] F.C. 1206; (1973), 42 D.L.R. (3d) 541; 15 C.C.C. (2d) 56 (C.A.); revd on other grounds sub nom. Commonwealth of Puerto Rico v. Hernandez, [1975] 1 S.C.R. 228; (1973), 41 D.L.R. (3d) 549; 14 C.C.C. (2d) 209.
considered:
Apotex Inc. v. Canada (Attorney General) (1993), 49 C.P.R. (3d) 161; 66 F.T.R. 36 (F.C.T.D.); affd [1994] 1 F.C. 742; (1993), 18 Admin. L.R. (2d) 122; 51 C.P.R. (3d) 339; 162 N.R. 177 (C.A.); affd [1994] 3 S.C.R. 1100; (1994), 29 Admin. L.R. (2d) 1; 59 C.P.R. (3d) 82; 176 N.R. 1.
referred to:
Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554; (1993), 100 D.L.R. (4th) 658; 13 Admin. L.R. (2d) 1; 46 C.C.E.L. 1; 17 C.H.R.R. D/349; 93 CLLC 17,006; 149 N.R. 1.
APPLICATION for judicial review of the refusal of the Minister of Health to process the applicant's abbreviated new drug submission. Application allowed.
appearances:
Harry B. Radomski for applicant.
Frederick B. Woyiwada for respondents.
solicitors of record:
Goodman Phillips & Vineberg, Toronto, for applicant.
Deputy Attorney General of Canada for respondents.
The following are the reasons for order rendered in English by
Cullen J.: In this hearing, Nu-Pharm Inc. (the applicant) applies for an order from the Court declaring that the refusal of the Minister of Health (the respondent) to process the applicant's abbreviated new drug submission (ANDS) was unlawful. Furthermore, the applicant seeks an order directing the respondent to process the applicant's ANDS pursuant to the Food and Drug Regulations1 (the Regulations) and to issue to it a notice of compliance (NOC) for its drug product in accordance with the Regulations.
REGULATORY BACKGROUND
Before describing the facts upon which this application is based, it would be instructive to review the regulatory regime in place for approving a new drug. The process for approving a new drug for manufacture and sale in Canada is governed by the Regulations, section C.08.002 [as am. by SOR/95-411, s. 4] of which provides that a manufacturer must obtain a NOC pursuant to section C.08.004 before approval.
Drug manufacturers obtain NOCs by submitting a New Drug Submission (NDS) or an ANDS to the Therapeutic Products Directorate of the Department of National Health and Welfare. This allows the respondent to assess the safety and effectiveness of the drug. Drug companies advance NDSs for drugs that have not been marketed in Canada; those NDSs include independent clinical data demonstrating the alleged safety and effectiveness of the drug. Manufacturers submit ANDSs to prove the safety and effectiveness of what are commonly referred to as generic drugs. Those submissions include data which is more comparative than clinical, because it seeks to prove the pharmaceutical equivalence or bioequivalence of the generic drug with a "Canadian reference product", a phrase which includes a drug for which the Minister has processed a NDS and thus issued a NOC. "Canadian reference product" is defined in section C.08.001.1 [as enacted idem , s. 3] of the Regulations:
C.08.001.1. . . .
"Canadian reference product" means
(a) a drug in respect of which a notice of compliance is issued pursuant to section C.08.004 and which is marketed in Canada by the innovator of the drug,
(b) a drug, acceptable to the Minister, that can be used for the purpose of demonstrating bioequivalence on the basis of pharmaceutical and, where applicable, bioavailability characteristics, where a drug in respect of which a notice of compliance has been issued pursuant to section C.08.004 cannot be used for that purpose because it is no longer marketed in Canada, or
(c) a drug, acceptable to the Minister, that can be used for the purpose of demonstrating bioequivalence on the basis of pharmaceutical and, where applicable, bioavailability characteristics, in comparison to a drug referred to in paragraph (a);
FACTS
The applicant is a corporation incorporated under the laws of Ontario which manufactures and distributes pharmaceutical products. Because its drug products are identical or therapeutically equivalent to a brand of drug products which the respondent has previously approved, the applicant is a generic drug company.
On September 11, 1997 the applicant submitted an ANDS for its version of drug X, which it claimed was identical to manufacturer A's drug X. The respondent had granted manufacturer A a NOC for its version of drug X based upon an ANDS which included comparative data showing that manufacturer A's drug X was bioequivalent or pharmaceutically equivalent to manufacturer B's version of drug X. The Director General of the Therapeutic Products Directorate of the Department of National Health and Welfare wrote a letter dated November 12, 1997 to the applicant, refusing to accept the ANDS because it did not refer to manufacturer B's drug X. The respondent refusing to process the ANDS and thus denying the applicant a NOC for drug X is the decision for which the applicant seeks judicial review.
GROUNDS FOR REVIEW
The grounds upon which the Court may rely to grant relief to a party applying to review the decision of a federal board, commission or other tribunal are set out in subsection 18.1(4) of the Federal Court Act [R.S.C., 1985, c. F-7 (as enacted by S.C. 1990, c. 8, s. 5)]:
18.1 . . .
(4) The Trial Division may grant relief under subsection (3) if it is satisfied that the federal board, commission or other tribunal
(a) acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction;
(b) failed to observe a principle of natural justice, procedural fairness or other procedure that it was required by law to observe;
(c) erred in law in making a decision or an order, whether or not the error appears on the face of the record;
(d) based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it;
(e) acted, or failed to act, by reason of fraud or perjured evidence; or
(f) acted in any other way that was contrary to law.
ISSUES
The issues in this application for judicial review are most clearly expressed by referring to them in the context of some traditional grounds for judicial review:
1. Did the respondent commit an error of law by concluding that the applicant's drug was not a "Canadian reference product" as defined by the Regulations?
2. Did the respondent commit an error of law by relying upon:
(i) the possibility of a "compounding effect" occurring if the ANDS were processed; or
(ii) the concern that processing the ANDS would declare the applicant's drug as a Canadian reference product
as factors to support his refusal to process the ANDS?
3. Did the respondent base his decision on an erroneous finding of fact without regard to the material before him by relying on the above factors for refusing to process the ANDS?
4. Did the respondent fetter his discretion by refusing to process the ANDS because of an alleged "compounding effect" or a reluctance to declare the applicant's drug a Canadian reference product?
THE PARTIES' SUBMISSIONS
To begin the respondent addresses the standard of review for this judicial review application. The respondent submits that this Court should show curial deference to his decision because the regulatory scheme demonstrates that Parliament has chosen to rely heavily on the Minister's expertise. Furthermore, the respondent alleges that the Court is in no position to question the decision given the technical nature of drug submissions and the process for their assessment. The respondent also urges this Court to apply a standard of reasonableness rather than a standard of correctness to assess the respondent's conclusion. Thus any doubt or ambiguity must be resolved in favor of the respondent's discretion. The applicant claims that the Court should not defer to the Minister's decision because it disputes the legal basis rather than the technical aspects for that finding.
Determining whether the applicant complied with the Regulations ultimately depends on whether manufacturer A's version of drug X is a "Canadian reference product" as defined in the Regulations. Generally, the respondent argues that accepting manufacturer A's version of drug X as a Canadian reference product will create safety concerns for two reasons. Firstly it claims that manufacturer A's product, as a generic drug, had to meet a 80% to 125% comparative bioavailability standard. That is, the generic, to have a NOC issued, had to contain between 80% and 125% of the active ingredient of manufacturer B's drug X, which had been approved based on clinical data. Thus the effect of comparing an ANDS to manufacturer A's drug X could be to compound the discrepancy so that the drug contains between 64% and 156% of the active ingredient of manufacturer B's drug X and its comparative bioavailability falls outside of the standardized measure. The applicant submits that relying on this basis to reject drug X was an error in law, was premised on an erroneous finding of fact and fettered the Minister's discretion. The applicant claims that it seeks to compare its drug to manufacturer A's drug because the drugs are identical rather than by proving that its drug is bioequivalent or pharmaceutically equivalent to an approved drug. The applicant cited testimony from the cross-examination of Mary Elizabeth Carman, Director of the Bureau of Pharmaceutical Assessment of the Therapeutic Products Directorate of Health Canada, who swore an affidavit on behalf of the respondent. Ms. Carman admitted that the compounding argument, when the drugs are identical, is without merit. Thus the applicant submits that the respondent "forgot" that this was not a case where the compounding effect might occur. The respondent argued in response that Ms. Carman was not suggesting that a compounding effect occurred here, but that the possibility of a compounding effect is simply part of the Minister's rationale for not accepting generic drugs as Canadian reference products.
The applicant also claims that the respondent was concerned that by processing the ANDS he would effectively declare manufacturer A's drug X to be suitable as a Canadian reference product for all subsequent ANDSs. To the applicant, the respondent taking this factor into account was an error of law. The applicant emphasizes that while trying to expand on why the respondent's policy was to avoid accepting drugs such as manufacturer A's drug X as Canadian reference products in her cross-examination, Ms. Carman cited a provision from the Regulations, subsection C.08.004(4), which refers to a "declaration", though in the context of declaring the drugs equivalent. Because that provision has no application to the case at bar, and because the Minister would always retain the discretion for approving any submission, the applicant argues that accepting manufacturer's drug X as a Canadian reference product would not amount to a declaration of its validity for all subsequent ANDSs.
The parties also address the definition of "Canadian reference product" within the Regulations specifically. Paragraph C.08.001.1(a ) includes within the definition a drug for which a NOC is issued pursuant to section C.08.004 and that is marketed in Canada by the drug's innovator. According to the applicant, the decision to designate manufacturer B's drug as the Canadian reference product is arbitrary given that manufacturer A's drug X has also been granted a NOC and therefore falls within the definition. The parties also dispute the meaning of the term "innovator", which is not defined by the Regulations. The respondent submits that manufacturer A's version of drug X did not fall within paragraph C.08.001.1(a ) because that version was not marketed in Canada by the innovator of the drug. The applicant disagrees, since paragraph C.08.001.1(a) also describes a "Canadian reference product" as a drug for which a NOC has been issued, and manufacturer A's drug X had been issued a NOC. To the applicant, the respondent has sanctioned the drug's safety as a Canadian reference product by issuing the NOC.
Paragraph C.08.001.1(b) includes drugs that are an adequate substitute for those drugs which have been issued a NOC but are no longer marketed in Canada within the definition of "Canadian reference product". Such alternate Canadian reference products must be "acceptable to the Minister". The applicant submits that paragraph C.08.001.1(b ) specifically authorizes the use of alternate references, which indicates that one brand of drug X can not be designated as the Canadian reference product to the exclusion of all others. The respondent emphasizes that paragraph (b) only applies where the innovator product, here manufacturer B's drug X, is no longer marketed in Canada.
Finally, paragraph C.08.001.1(c) provides that a Canadian reference product includes a drug that can be used to demonstrate bioequivalence in comparison with a drug referred to in paragraph C.08.001.1(a). This subsection also leaves any residual discretion for approval with the Minister. Thus, the respondent justifies his refusal to approve the ANDS because he does not issue NOCs for drugs which refer to alternate reference products that relied on comparative data within an ANDS rather than on clinical data normally included within a NDS. Furthermore, the respondent claims that in the case at bar there was no evidence to prove that the applicant's drug X was bioequivalent or pharmaceutically equivalent to manufacturer B's drug X.
ANALYSIS
I propose to begin my analysis by discussing each of the three paragraphs in the definition of "Canadian reference product". I will then consider the respondent's decision and whether the Court should defer to it. Reviewing that finding will necessarily involve the Court considering the alleged effects of expanding the definition of Canadian reference product. Within this analysis I will address each of the proposed grounds for judicial review.
1. Paragraph C.08.001.1(a)
In my view, the applicant's drug does not fall within the definition of Canadian reference product under paragraph C.08.001.1(a). This decision is based on a simple plain language reading of that provision. Once the respondent issues a NOC, the drug to which that NOC applies does not automatically become a Canadian reference product pursuant to paragraph C.08.001.1(a), as is urged by the applicant. Rather, the word "and" within the provision acts conjunctively so that to fall within paragraph (a ), a drug must also be marketed in Canada by its innovator.
In Apotex Inc. v. Canada (Attorney General),2 Mr. Justice Robertson stated that innovator companies research and develop drugs and are the first companies to bring them to market. Mr. Justice MacKay, in Apotex Inc. v. Canada (Attorney General)3, described the respondent companies as innovator companies, noting that they had:
. . . sought and obtained approval from the respondent Minister for marketing prescription drug products in which they [held] patent rights.
In my view, manufacturer A is not an innovator. It obtained its NOC by comparing the bioavailability data of its drug to that of drug B rather than by performing clinical research and submitting its own clinical data. Manufacturer A was not the first company to bring drug X to market, and it does not hold the patent rights to drug A, a fact that can be presumed by noting that it submitted an ANDS rather than a NDS to the respondent.
2. Paragraph C.08.001.1(b)
I agree with the applicant that paragraph C.08.001.1(b) sanctions the use of alternate reference products. Therefore, under paragraph (b) a drug for which a notice of compliance has been issued can not be declared a Canadian reference product to the exclusion of all other formulations of that drug, at least when a drug is no longer marketed in Canada. But the proposed reference product no longer being marketed in Canada is a necessary condition that a drug must satisfy before it becomes a Canadian reference product pursuant to paragraph C.08.001.1(b). Thus, in my opinion, manufacturer A's drug X is not a Canadian reference product pursuant to paragraph C.08.001.1(b) because there is no evidence indicating that manufacturer B is no longer marketing its drug in Canada.
3. Paragraph C.08.001.1(c)
Finally, paragraph C.08.001.1(c) allows alternate Canadian reference products where a drug can be used to demonstrate bioequivalence, on the basis of pharmaceutical and bioavailability characteristics, to a Canadian reference product referred to in paragraph C.08.001.1(a). In my view, a drug that is identical to the innovator's drug, as manufacturer A's drug X is identical to manufacturer B's drug X, can be used to demonstrate bioequivalence based on pharmaceutical characteristics when the respondent is satisfied that evidence shows that those characteristics are identical. However, paragraph C.08.001.1(c) does afford the respondent some discretion, as that drug must be "acceptable to the Minister". Therefore it is necessary to analyze the exercise of that discretion and the respondent's reasoning for denying the NOC.
4. Reviewing the Respondent's Decision
Before analysing the respondent's decision to refuse to process the applicant's ANDS and thus not to issue a NOC, I must address the factors that will direct me in reviewing that decision. The trend in recent years, as evidenced by Dickason v. University of Alberta,4 has been for courts to show curial deference to the findings of administrative decision makers when those findings are within an administrative decision maker's expertise. Those findings include questions of law, assuming those questions are within the lower body's expertise.5 Mr. Justice Iacobucci held, in Pezim v. British Columbia (Superintendent of Brokers),6 that in such instances, it is not for the Court to determine whether the administrative decision maker's findings are correct, but rather whether they are reasonable.
There are factors in the case at bar which support applying a standard of reasonableness to the respondent's findings. Firstly, this hearing regards an application for judicial review rather than an appeal pursuant to a statutory provision. In Bell Canada v. Canada (Canadian Radio-television and Telecommunications Commission),7 Mr. Justice Gonthier held that a court's jurisdiction is much broader on appeal than on judicial review. A second factor which suggests that I should defer to the respondent's reasoning is that the decision maker, the Director General of the Therapeutic Products Directorate of the Department of National Health and Welfare, is highly specialized with advanced expertise regarding the safety and efficacy of approving new drugs. These factors do not make the respondent's decision immune from review, however, because Parliament has not included a privative clause within the Regulations or the Food and Drugs Act8 aimed at eliminating judicial review for errors of law. Such clauses are Parliament's direction to courts to respect the findings of lower bodies on judicial review. I therefore conclude that the standard of review in this judicial review application is closer to the reasonableness end of the spectrum than to correctness, though I will not defer entirely to the respondent's finding.
Parliament has afforded the respondent discretion in paragraph C.08.001.1(c) of the definition of Canadian reference product, since the drug must be "acceptable to the Minister" before it becomes a Canadian reference product. However, in the context of analysing a new drug submission to determine whether to issue a NOC, the respondent's discretion is not unfettered. In Apotex Inc. v. Canada (Attorney- General) ,9 the Court held that the scope of the Minister's discretion is limited strictly to considering whether approving a NDS would be safe and effective. Here I extend that limit on the respondent's discretion to ANDSs.
Therefore I must assess the respondent's conclusion that manufacturer A's drug X did not fall within paragraph C.08.001.1(c) of the definition on the basis of the above standard. Furthermore, I must ensure that it limited its reasoning to considerations regarding the safety and effectiveness of accepting manufacturer A's drug X as a Canadian reference product.
5. The Minister's Decision
Ms. Carman's affidavit and her cross-examination by applicant's counsel demonstrate that the respondent did indeed base his decision on health and safety concerns. Firstly, Ms. Carman's evidence shows that the respondent's apprehensiveness to include a drug within the definition of Canadian reference product when doing so might risk a compounding effect so that a new drug falls outside of the 80% to 125% standard. Secondly, in her cross-examination, Ms. Carman expressed a concern that the Regulations do not limit the use of those drugs which are identical to the existing Canadian reference product as alternate reference products. Thus the respondent would be powerless to deny status as a Canadian reference product to a drug that is, for example, 99% bioequivalent or pharmaceutically equivalent to an existing Canadian reference product. The compounding effect and the possibility of drugs which are not identical to existing Canadian reference products being deemed as alternate reference products are surely factors that could affect the safety and effectiveness of drugs proposed for approval. Therefore, I conclude that the respondent fettered his discretion while refusing to process the ANDS, but did so legitimately since the factors he considered were based on safety and effectiveness concerns.
It does not follow, however, that I dismiss the other grounds for review advanced by the applicant. In my view, the respondent's decision to refuse to process the applicant's ANDS, which therefore denied a NOC to the applicant for drug X, was unreasonable based on two grounds under subsection 18.1(4) of the Federal Court Act and must be overturned. I would defer to the broad discretion provided by Parliament to the respondent, but the respondent's oral and written submissions and Ms. Carman's testimony on cross-examination have provided me with no compelling reason to do so.
The applicant's first successful ground for review is that the respondent made an error of law by concluding that manufacturer A's drug X does not fall within the definition of Canadian reference product under paragraph C.08.001.1(c). Ms. Carman noted during her cross-examination that the respondent's policy is to use paragraph (c) of the definition only in instances where an applicant seeks to compare the product within an ANDS to a drug marketed outside of Canada that is identical to the Canadian reference product marketed in Canada. I can think of no reason, where the proposed alternate reference drug is identical to the current Canadian reference product and is marketed in Canada, for denying that identical drug status as a Canadian reference product. Indeed, neither Ms. Carman nor respondent's counsel explained the reason for this differentiation. I would conclude, therefore, that the refusal to process the ANDS was premised on an unreasonable and erroneous interpretation of paragraph (c) which amounted to an error of law under paragraph 18.1(4)(c) of the Federal Court Act.
I wish to emphasize that I make no finding regarding proposed alternate Canadian reference products that are not identical to the current Canadian reference product. The safety and effectiveness concerns expressed by the respondent through Ms. Carman are entirely legitimate when the proposed alternate reference product is not identical; however, they simply do not apply to the facts in the case at bar.
To explain the second ground for concluding that the respondent's actions were unreasonable, I refer to Dansereau v. Canada (Public Service Appeal Board).10 In that case Mr. Justice Décary referred to the former paragraph 28(1)(c) of the Federal Court Act,11 the wording of which is identical to today's paragraph 18.1(4)(d). To interpret the power of review conferred upon the Court by that provision, Mr. Justice Décary quoted from Puerto Rico (Commonwealth) v. Hernandez,12 which held that a court should intervene:
. . . when the case is one of so gross an error in the appreciation of the case presented as to indicate not merely a misjudgment of the effect of marginal evidence but a disregard of material before the tribunal of such a nature as to amount to an error of law or to give rise to an inference that some erroneous principle has been followed . . . .
In my view the respondent's preoccupation with both the compounding effect and concern for setting a precedent by accepting manufacturer A's drug X as a Canadian reference product caused him to neglect the most essential factor in this case: that the applicant's drug X is identical to that of manufacturer A. Therefore, I conclude that the respondent made his decision based on an erroneous finding of fact without regard to the material which indicated that the drugs were identical, and that this constitutes sufficient grounds for review pursuant to paragraph 18.1(4)(d) of the Federal Court Act.
CONCLUSION AND DISPOSITION
Subsection 18.1(3) of the Federal Court Act sets out the remedies available once an applicant successfully establishes a legitimate ground of review. Paragraph (a) permits the Court to order the decision maker to perform the act that "it has unlawfully . . . refused to do", which is essentially a licence to issue mandamus . The applicant urges the Court to order the respondent to issue a NOC for its version of drug X. The detailed regulation of the issuance of NOCs, which includes the submission of complicated scientific evidence for review by qualified technicians and scientists, accounts for my reluctance to comply with the applicant's request. Instead, I rely on paragraph 18.1(3)(b) of the Federal Court Act to set aside the Minister's refusal to process the application and to refer this matter back to the Therapeutic Products Directorate of the Department of National Health and Welfare for redetermination based on the foregoing reasons.
1 C.R.C., 1978, c. 870 as amended.
2 [1994] 1 F.C. 742 (C.A.).
3 [1997] 1 F.C. 518 (T.D.), at p. 526.
4 [1992] 2 S.C.R. 1103.
5 See Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554, at p. 584.
6 [1994] 2 S.C.R. 557.
7 [1989] 1 S.C.R. 1722.
8 R.S.C., 1985, c. F-27 as amended.
9 (1993), 49 C.P.R. (3d) 161 (F.C.T.D.); affd [1994] 1 F.C. 742 (C.A.); affd [1994] 3 S.C.R. 1100.
10 [1991] 1 F.C. 444 (C.A.).
11 As that provision appeared in R.S.C., 1985, c. F-7. It was amended by S.C. 1990, c. 8, s. 8.
12 [1973] F.C. 1206 (C.A.), at p. 1208; reversed on other grounds at [1975] 1 S.C.R. 228.