Merck Frosst Canada Ltd v Minister of Health – Part I

“Sunlight is said to be the best of disinfectants.” – Former U.S. Supreme Court Justice Louis Brandeis, in “What Publicity Can Do,” Harper’s Weekly, 1913.

In an environment that views public accountability with a healthy dose of skepticism, Parliament has advanced the Access to Information Act (the “Act”) to foster government transparency. In the pharmaceutical industry, implementing the Act means striking a balance between the goals of encouraging disclosure to allow public scrutiny and protecting the innovator’s interest without diminishing the incentive to innovate. It is not surprising that an innovator pharmaceutical company that submits information to Health Canada for regulatory approval will attempt to rely on specific exemptions in the Act to preclude disclosure of its documents.

Justice Cromwell, invoking the famous quote by Justice Brandeis in the opening paragraph of Merck Frosst v Canada, [2012] 1 SCR 23, patently endorses the benefits of governmental transparency in a democratic society. Yet, after reading this 6-3 decision in its entirety, the majority of the Supreme Court of Canada (“SCC”) seems to be more protective of the innovators’ interests by limiting the expansive right of access to pharmaceutical information.

This decision marks the first time the SCC interprets how exemptions from disclosure for trade secrets and other confidential information should be treated under the Act. Specifically, the SCC provides a detailed analysis clarifying the following points:

1. What is the threshold for triggering the institutional head’s duty to give a third party notice of the access to information request?
2. How should the head of the institution review a record to decide whether or not to give notice?
3. What are the applicable burden and standard of proof on a third party claiming a s. 20(1) exemption for trade secrets and other confidential information?
4. How should s. 25 of the Act, which requires the government to disclose any part of the record that does not contain the exempted information, be applied?

The significance of this decision has prompted TheCourt.ca to divide the analysis into a three-part discussion. This first post provides the background of the case and focuses on the notice requirement to the third party (points 1 and 2). Part 2 of this series will comment on how the SCC interprets the exemptions from disclosure provisions provided for trade secrets and other confidential information under s. 20(1) of the Act, as well as how some parts of an exempted record should still be disclosed under s. 25 of the Act (points 3 and 4). Finally, Part 3 will discuss the strongly worded dissent in this case and the implications of this decision on the pharmaceutical industry.

Facts

To gain regulatory approval of a new drug (Singulair®), Merck (the “third party” in this case) must file a New Drug Submission (NDS) disclosing all the information related to the research and development of the drug, data from preclinical and clinical studies, and the tests that were applied to establish its safety and efficacy. Once submitted, Health Canada makes “reviewers’ notes” during the review process and asks for additional information from the manufacturer.

After a series of discussions and compromises between the parties, a Product Monograph will be published along with the Notice of Compliance issued by Health Canada. (Note that this final record may not include all of the information exchanged between the parties.) After filing an NDS, Merck submitted a Supplementary New Drug Submission (SNDS) in order to obtain approval of a new dosage of the drug that would extend to patients who are two to five years old. Both the drug and the new dosage were subsequently approved.

Health Canada received access to information requests relating to Merck’s submission of information. After reviewing the information, Health Canada found that some of the pages contained confidential information that could not be disclosed under s. 20 (1) of the Act, and that some pages could be disclosed to the requester without first notifying Merck.

Merck argues that, with the exception of the Product Monograph and some published studies, all of the information covered by the request — including the already-disclosed pages — is exempt from disclosure under s. 20(1) of the Act. Furthermore, Merck contends that Health Canada did not conduct a sufficiently detailed review of the documents before giving it written notices of an intention to disclose. On the other hand, Health Canada maintained that Merck’s submissions did not give enough details when addressing the exemptions it claimed.

Access to Information Act

The Act contains both substantive and procedural protection of information held by a government institution. This post focuses on the issues related to the procedural provisions of the Act. Part 2 of the post, which will be available next Thursday, will delve into the substantive provisions of the Act.

Procedural Protection

Before disclosure of information, the third party whose information is being sought is entitled to an opportunity to persuade the government institution that exemptions to disclosure apply and to seek judicial review of that institution’s decision.

The Act, under ss. 27, 28 and 44, contains procedural provisions that establish a process of notification, negotiation, and judicial review. Section 27(1) of the Act sets out the circumstances in which a government institution must make “every reasonable effort” to give written notice of its intention to disclose the third party’s information.

Analysis by the SCC

Justice Cromwell, writing for the majority, explains that the Act is based on three guiding principles:

1. Government information should be available to the public;
2. The necessary exceptions to the right of access should be limited and specific; and
3. Decisions on the disclosure of government information should be reviewed independently of government.

While these principles appear to favour increased access to information, Justice Cromwell cautions that “routine disclosure of information might even ultimately discourage research and innovation.” Moreover, Justice Cromwell states that Parliament has intended to strike a balance between granting access to information and protecting other interests in relation to third party information, exemplified by s. 20(1) of the Act.

What is the Threshold for Triggering the Duty of the Institutional Head to Give Notice of the Access to Information Request to a Third Party?

The fact related to this issue is that Health Canada disclosed some documents without giving notice to Merck. After interpreting the notice requirement under s. 27(1), Justice Cromwell holds that “disclosure without notice” could only be made when there is no reason to believe that the record might contain information referred to in s. 20(1). The SCC applies a high threshold here, which is appropriate because an outright disclosure without notice could risk disclosing exempted information by mistake, which could cause irremediable harm to the third party. Giving notice serves as a procedural safeguard and allows the third party, who is in a better position to understand the information, to address the issues.

Furthermore, the SCC should be applauded for setting out the following guidance on s. 27(1): if the information is clearly subject to disclosure (where there is no reason to believe that the information might contain exempted material), then disclosure without notice is required. If the information is clearly exempt (the head has no reason to believe that disclosure could be required by the Act), refusal of disclosure without notice is required. If the information is not clearly subject to disclosure and might fall within the exempted categories, notice must be given. If the head intends to disclose a record with severed material pursuant to s. 25, or exempted material that serves the public interest, then notice is required.

The SCC sets a low threshold for triggering the duty to give notice. This ensures procedural fairness and accommodates the demands for commercial confidentiality by allowing an innovator pharmaceutical company to make representations for its case for non-disclosure.

How Should the Head of the Institution Review a Record to Decide Whether or Not to Give Notice?

First, the institutional head must conduct a sufficient review of the requested material. Once notice has been given, the third party must provide reasonable assistance to the head in order to persuade it that the exemptions apply. It is logical to think that the third party bears the burden of showing why disclosure should not be made when it seeks judicial review (under s. 44 of the Act). At the SCC, the issue arises because the FCA, which strongly favoured disclosure in this case, had held that the burden was a “heavy” one. The SCC overturns the FCA decision and applies the civil standard of proof, and the third party must establish that the statutory exemption applies on the balance of probabilities.

The decision seems favourable to Merck so far: the SCC holds that disclosure without notice is only allowed in the most restrictive circumstances, and that the standard of proof is on the balance of probabilities. However, the SCC eventually dismisses Merck’s appeal. Stay tuned for Part 2 of this series to find out why.