Documentation

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CT-2024-006 THE COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended; AND IN THE MATTER OF an application by JAMP Pharma Corporation for an order pursuant to section 103.1 of the Competition Act seeking leave to bring an application under section 79 of the Competition Act;

AND IN THE MATTER OF an Application by the JAMP Pharma Corporation for an order pursuant to section 79 of the Competition Act;

BETWEEN

JAMP PHARMA CORPORATION

Applicant

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JANSSEN INC.

Respondent

MEMORANDUM OF FACT AND LAW OF JANSSEN INC. (Response to Application for Leave Pursuant to Section 103.1 of the Competition Act)

BLAKE, CASSELS & GRAYDON LLP 199 Bay Street Suite 4000, Commerce Court West Toronto, ON M5L 1A9

Robert E. Kwinter Phone: (416) 863-3283 Fax: (416) 863-2653 Email: rob.kwinter@blakes.com

Nicole Henderson Phone: (416) 863-2399 Email: nicole.henderson@blakes.com

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Jonathan Bitran Phone: (416) 863-3289 Email: jonathan.bitran@blakes.com

Joe McGrade Phone: (416) 863-4182 Email: joe.mcgrade@blakes.com

Brian Facey Phone: (416) 863-4262 Email: brian.facey@blakes.com

Counsel for the respondent Janssen Inc.

TABLE OF CONTENTS

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Page PART I: OVERVIEW..................................................................................................................... 1 PART II: STATEMENT OF FACTS ............................................................................................. 2 PART III: POINTS IN ISSUE ...................................................................................................... 14 PART IV: LAW AND SUBMISSIONS ....................................................................................... 14 Test for Leave under Section 103.1 of the Act ................................................................. 14 JAMP is not Substantially and Directly Affected ............................................................. 16 JAMP Failed to Establish That An Order Could be Issued Under Section 79 ................. 20 PART V: ORDER SOUGHT ....................................................................................................... 38

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PART I: OVERVIEW 1. JAMP Pharma Corporation (“JAMP”), seeks leave to bring an abuse of dominance application unsupported by credible or reliable evidence. JAMP is a pharmaceutical manufacturer that has recently introduced to the Canadian market a biologic drug, Jamteki, that is a biosimilar to STELARA® (ustekinumab), an innovative biologic medicine that the respondent, Janssen Inc. (“Janssen”), has marketed in Canada since 2009.

2. At its core, JAMP’s application for leave is a yarn spun out of its failure to meet its own optimistic sales projections for Jamteki since it launched in March 2024. Its allegations of anticompetitive conduct by Janssen are based on speculation, unreasonable inferences drawn from limited documentary evidence, and inaccurate hearsay. With leave of the Competition Tribunal (the “Tribunal”), Janssen has adduced responding evidence directly refuting these allegations. JAMP’s key allegation—that Janssen is promoting FINLIUS as a biosimilar—is patently false.

3. JAMP’s allegations that Janssen has somehow “gamed” the Canadian patent system similarly hold no water. There is nothing illegitimate in Janssen’s efforts to protect its patent rights, including through litigation where necessary.

was a “sham”.

belies any suggestion that Janssen’s assertion of patent rights

As a result, even if there was anything to JAMP’s claims relating to Janssen’s ustekinumab patent litigation, JAMP is barred from asserting any such claim in this proceeding.

4. There are myriad explanations for JAMP’s failure to meet its sales goals for Jamteki that are unrelated to any conduct by Janssen. Notably, Jamteki is not indicated for treatment of Crohn’s disease or ulcerative colitis, conditions that represent over of the current patient population for STELARA. JAMP also ignores the fact that within a matter of months, Janssen will no longer

1375-3791-3614.19

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be competing at all for publicly-insured patients, which represent roughly sales in Canada.

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of ustekinumab

5. JAMP has failed to meet its burden on its leave application to adduce sufficient credible evidence to give rise to a bona fide belief that it may have been directly and substantially affected in its business by a reviewable practice, and that the alleged practice could be subject to an order under the Competition Act (the “Act”). It has not presented a plausible case of abuse of dominance that merits the expenditure of the Tribunal’s time and resources (let alone Janssen’s). This application should be dismissed.

The Parties

PART II: STATEMENT OF FACTS

Janssen Inc.

6. Janssen is a Canadian subsidiary of Johnson & Johnson, (“J&J”) a pharmaceutical, biotechnology and medical technologies corporation publicly traded on the New York Stock Exchange and headquartered in New Brunswick, New Jersey. Janssen is part of the J&J Innovative Medicine sector, which develops and markets innovative medicines across multiple therapeutic areas, including oncology, immunology, neuroscience, and pulmonary hypertension. 1

7. Among other things, Janssen supplies biologic drugs in Canada, including STELARA® and FINLIUS®, which are ustekinumab biologic drugs. STELARA and FINLIUS were developed by J&J Innovative Medicine (then known as the Janssen Pharmaceutical Companies of Johnson & Johnson) to treat complex immunological conditions, as described below. 2

JAMP Pharma Corporation 8. JAMP is incorporated under the laws of Canada and headquartered in Montreal. In partnership with a third-party biosimilar drug developer, JAMP supplies Jamteki in Canada. JAMP has several business divisions:

1 Affidavit of Andy Williams, sworn September 6, 2024 (“Williams Affidavit"), para 2. 2 Williams Affidavit, para 4.

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a. JAMP Pharma, a supplier of generic pharmaceutical products;

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b. JAMP Pharma Manufacturing, a generic drug manufacturing business based in JAMP’s 100,000 square foot facility located in Lévis, Quebec.

c. BioJAMP, a supplier of biosimilar drug products (including Jamteki) and a related PSP called JAMP Care;

d. Orimed Pharma, a supplier of bone health and primary care products;

e. Wampole, a supplier of a range of vitamin and nutritional supplements;

f. Laboratoire Suisse, a supplier of natural health products (such as probiotics);

g. Cosmetic Import, a distributor of personal beauty products (such as soaps, deodorants and bath salts); and

h. JAMP Acute Care & Injectables, a supplier of therapeutic injectable and oncology products and a provider of a related out-patient PSP. 3

STELARA and FINLIUS

Overview

9. Janssen’s STELARA and FINLIUS products are biologic drugs, which are derived from living organisms or from their cells. Biologic drugs are often developed and manufactured using biotechnology to treat several diseases and medical conditions. Biologic drugs are generally comprised of more complex molecules than traditional “small molecule” pharmaceutical drugs created through chemical synthesis. 4

10. In or around 2007, an affiliate of Janssen developed STELARA (ustekinumab), a biologic drug that is effective at treating plaque psoriasis, psoriatic arthritis, Crohn’s disease, and ulcerative colitis in adult patients (Crohn’s disease and ulcerative colitis are both forms of inflammatory

3 Affidavit of S. Juneja, sworn July 25, 2024 (“Juneja Affidavit"), para 6. 4 Williams Affidavit, at para 4.

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bowel disease (“IBD”)). 5 (For pediatric patients aged 6 to 17, STELARA is indicated for plaque psoriasis.) Janssen began marketing STELARA in Canada in 2009 for psoriasis. Since STELARA received IBD indications in 2016 and 2020, the majority of STELARA sales in Canada have been for patients with IBD. As of June 21, 2024, active STELARA patients were for IBD indications. 6

11. FINLIUS is an authorized alternate brand of Stelara, produced identically to STELARA, but with different branding and packaging. Health Canada approved FINLIUS on April 18, 2023 (by cross-referencing the STELARA new drug submission) and Janssen began to market it in Canada on July 2, 2024. 7 FINLIUS is not a biosimilar drug and Janssen never marketed FINLIUS as a biosimilar. 8 To the contrary, Jannsen’s marketing strategy for FINLIUS emphasizes that it is produced identically to STELARA.

BioAdvance 12. Janssen also provides a Patient Support Program (“PSP”) called BioAdvance, which provides one-on-one support to patients in Canada who are prescribed certain Janssen medications, including STELARA and FINLIUS, and will shortly provide support to certain patients prescribed a biosimilar ustekinumab option, Steqeyma, manufactured by Celltrion Healthcare Canada (“Celltrion”), when supply becomes available in Canada. 9

13. BioAdvance is staffed by “coordinators” (BioAdvance coordinators, or “BACs”) who serve as a single point of contact for patients and prescribers. 10 Among other things, BACs assist patients in getting timely access to medication – often in advance of determining their insurance coverage, assist in identifying and applying for insurance coverage for biologic medications, assist in facilitating administration of biologic products (including providing training for administering injectable products and arranging clinic visits with BioAdvance’s network of third-party clinic service providers), liaise with patients’ healthcare providers, provide product information and

5 Ibid. 6 Williams Affidavit, at para 8. 7 Ibid, at para 12. 8 Ibid. 9 Ibid at paras 27, 40. 10 Ibid, at para 27.

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information about BioAdvance services, report adverse events experienced by the patient, and ensure a smooth patient experience overall. 11 BACs are not acting as healthcare professionals and do not prescribe medication to patients; treatment decisions are made by patients in consultation with their treating physicians. 12

Approvals Process

14. Janssen was required to obtain Notices of Compliance (“NOCs”) for STELARA and FINLIUS from Health Canada under the Food and Drugs Regulations to market these products in Canada. The authorization for STELARA involved Janssen delivering a New Drug Submission (“NDS”) and subsequent supplemental New Drug Submissions (“SNDS”), which includes providing scientific evidence of the product’s safety, efficacy, and quality for Health Canada’s review. The authorization for FINLIUS as an additional product name was through an administrative labeling-only NDS through cross-referencing the information in the approved STELARA submissions. 13

Biosimilar Approvals in Canada

15. Innovator drug manufacturers undertake a “significant investment in time and research” to develop new medicines and bring them to market. 14 The Patent Act incentivizes investment in these programs by providing a 20-year period of exclusivity for patented inventions starting from the filing date of a patent. 15 This exclusivity period allows innovators to try to recoup a portion of their substantial costs of research and development.

16. In the early 1990s, Parliament sought to facilitate the entry of competing generic drug products immediately upon the loss of patent exclusivity to innovator drugs by introducing the “early working exception” into the Patent Act. 16 This new exception to what would otherwise be

11 Ibid. 12 Ibid. 13 Ibid at para 4. 14 Abbott Laboratories v. Canada (Minister of Health), 2006 FC 120, [2006] 4 FCR 41 at para 6, rev’d 2007 FCA 73 but not on this point; Novo Nordisk Canada Inc. v. Canada (Health), 2019 FC 822 at para 13. 15 Patent Act, R.S.C., 1985, c. P-4, s. 44 (“Patent Act”). 16 Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, [2005] 1 SCR 533, at para. 11; Patent Act, s. 55.2(1).

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patent infringement permits biosimilar and generic drug manufacturers to “early work” patented inventions for drugs and to file for regulatory approval for their biosimilar products even before the relevant patent has expired. Because of this exemption, biosimilar drug manufacturers are able to launch their products promptly upon patent expiry.

17. To balance the rights of innovator drug companies and prevent abuse of this early-working exception, the Patented Medicines (Notice of Compliance) Regulations (the “PM(NOC) Regulations”) were enacted to operate as a linkage between the Food and Drugs Act and the Patent Act. Under the Food and Drug Regulations, manufacturers looking to sell a drug in Canada must submit to the Minister of Health (“Minister”) either an NDS (filed by a “first person” innovative drug manufacturer or a “second person” biosimilar) or an Abbreviated New Drug Submission (“ANDS”, filed by a “second person” generic manufacturer). In filing an NDS or ANDS, a second person biosimilar or generic manufacturer “may rely on much of the technical, health and safety information originally filed as part of the NDS by the first person.” 17 Once the Minister has approved a drug for market, they will issue an NOC in respect of the submission. To receive an NOC for a biosimilar, the biosimilar manufacturer must demonstrate that its drug is similar in terms of safety and efficacy to the reference biologic drug for which the innovator has already received approval.

18. Under the PM(NOC) Regulations, an innovator who has received an NOC may submit, for inclusion on the Minister’s “patent register”. A “patent list” includes patents the innovator believes meet the criteria for inclusion on the Minister’s patent register for the particular drug. The Minister then determines if the patent(s) on the patent list(s) meet the required criteria and, if so, the Minister includes the patents on the patent register. The effect of listing a patent on the patent register in respect of a drug is that a biosimilar or generic manufacturer cannot obtain an NOC in respect of that drug until the patents on the patent register are “addressed” by the biosimilar or generic manufacturer. 18 If the Minister declines to list a patent on the patent register, this does not mean

17 Novartis Pharmaceuticals Canada Inc. v. Apotex Inc., 2013 FC 142 at para. 10. 18 Eli Lilly Canada Inc. v. Canada (Minister of Health), 2003 FCA 24, [2003] 3 FC 140, at para. 8.

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that the patent is invalid, it means only that the patent cannot be used in proceedings under the PM(NOC) Regulations; the patent holder otherwise maintains the right to sue for infringement.

19. Biosimilar drugs are different than “generic” chemically-produced small molecule drugs. Generic drugs are chemically identical to their reference drug and, by definition, cover the same indications and have indistinguishable efficacy levels. By comparison, biosimilar drugs are often distinctive from their reference biologic drugs (which are naturally variable). 19 As a result, patients are required to obtain a separate prescription from their health care providers when switching between a biologic drug and its derivative biosimilar drug; conversely, there is automatic switching to the generic small molecule drug when the brand name version is prescribed. 20

JAMP’s ustekinumab biosimilar: Jamteki

20. JAMP’s Jamteki was the result of a partnership with Alvotech hf. (“Alvotech”), an Icelandic business that develops and supplies biosimilar drugs. Alvotech commenced Phase III clinical studies for its ustekinumab biosimilar on June 3, 2021. 21 These clinical trials lasted one and a half years and were completed in October 2022. 22

21. In the meantime, JAMP launched its BioJAMP biosimilar division in February 2022. 23 After launching its first biosimilar, SIMLANDI® (an adalimumab biosimilar to AbbVie’s HUMIRA®), in April 2022, JAMP looked for other biosimilar products to launch in Canada, and targeted Alvotech’s ustekinumab biosimilar. 24

22. Shortly after Alvotech’s Phase III clinical trials were complete, JAMP filed an NDS for Jamteki on November 24, 2022. The Minister granted JAMP an NOC on November 9, 2023. That NOC authorized JAMP to market Jamteki as indicated for plaque psoriasis and psoriatic arthritis,

19 Williams Affidavit at para 4. 20 Ibid. 21 Ibid at para 45. 22 Ibid. 23 Juneja Affidavit, Exhibit J32 at page 1753. 24 Juneja Affidavit, para 49.

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but not for IBD indications (i.e., Crohn’s disease or ulcerative colitis). The Minister did not authorize any indication for the pediatric use of Jamteki. 25

25 Williams Affidavit, para 5, and Exhibits 3 and 4. 26 Ibid at para 46. 27 Ibid, at para 47. 28

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27. To date, JAMP has not received approval for or marketed Jamteki for all ustekinumab indications (i.e., it has not obtained “full label” approval) from Health Canada, Health Canada rejected JAMP’s application to have Jamteki indicated for ulcerative colitis, Crohn’s disease, and pediatric indications, as JAMP did not include vial presentations with its submission. 31

Insurance available for STELARA and FINLIUS

28. Nearly all Canadians purchase medications with the benefit of private and/or public drug insurance, which pays for those medications in whole or in part. 32 Private insurance includes employer-sponsored drug benefit plans and individual personal health insurance sold by insurance companies. Further, each provincial and territorial government offers a publicly-funded drug benefit plan for eligible groups (e.g., seniors, recipients of social assistance, and individuals with diseases or conditions that are associated with high drug costs). 33

29. Both private and public insurers negotiate with drug manufacturers (including Janssen) the prices they will reimburse for specific medications and will often demand significant discounts or rebates on the list price of medications as a condition of listing the medication on the insurer’s approved list or formulary. 34 If private or public insurers do not provide coverage for a medication, particularly for a high-cost product, patients will most often seek an available alternative therapy

29 Willilams Affidavit, para 49 and Exhibit 62. 30 Ibid at para 51. 31 Williams Affidavit, para 5. 32 Williams Affidavit, para 11. 33 Ibid. 34 Williams Affidavit, para 17.

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that is covered by their insurance plan(s). Reaching agreements with private and public insurers to provide coverage for a medication is therefore crucial to the success of a drug. 35

Public insurers prioritize biosimilar drugs

30. Publicly-funded drug benefit plans are responsible for a significant proportion of the reimbursement of medications in Canada, including biologic drugs. 36 During the period that an innovative medicine is “on patent”, public insurers must include the patented medication on their formularies if they are going to cover the drug at all. Once a patent is de-listed from a public formulary, however, generic products (in the case of small-molecule drugs) or biosimilars (in the case of biologic drugs) typically become available for listing on public formularies. 37

31. In practice, once biosimilar options are available, public insurers begin shifting coverage to those alternatives and stop covering the original innovative biologic medication. 38 The public insurers require all patients currently prescribed the innovative biologic to switch to a listed biosimilar to maintain coverage, regardless of the treatment preferences of patients and their physicians (the industry term for this mandatory requirement is “non-medical switch”). 39

32.

At a high level, non-medical switch is done in three stages:

a. first, the insurer lists the biosimilar product on its formulary as eligible for coverage; b. second (and sometimes simultaneously with the first step), the insurer de-lists the innovative medication from the formulary, meaning that any new patient is only eligible for coverage for the biosimilar (while existing patients continue to be covered for the innovative medication); and c. third and finally, the insurer implements a “non-medical switch” policy, requiring that all patients taking the innovative medication (including those originally

35 Ibid. 36 Williams Affidavit, para 19. 37 Ibid. 38 Williams Affidavit, para 11. 39 Ibid.

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prescribed the innovative medication) switch to the biosimilar product, or else lose coverage altogether. 40

Once this process is complete, the innovative medication is essentially completely excluded from the public formulary. 41

33. Following the introduction of biosimilar products, private insurers may choose to cover both the innovative and biosimilar products, or may choose to cover only the biosimilar. 42 Innovative manufacturers therefore continue to compete for privately insured patients even after public insurers have completed the transition away from an innovative drug.

34. In the wake of the approvals of biosimilar ustekinumab products (i.e., Wezlana, Jamteki and, more recently, Steqeyma and Pyzchiva), public insurers have begun the process of de-listing STELARA. 43 For example, Quebec announced that ustekinumab biosimilar products would be listed on its formularies as of April 14, 2024, STELARA would no longer be reimbursed for patients commencing treatment after May 23, 2024, and mandated that non-medical switch away from STELARA must be completed for all patients by November 6, 2024. 44

35. In Ontario, Wezlana and Jamteki were added to the province’s public drug benefit formulary on April 30, 2024. 45 STELARA is no longer reimbursed for patients commencing treatment on or after April 30, 2024 and its existing users will have until January 31, 2025 to transition to a biosimilar drug to maintain coverage. Once each province and territory completes this process, STELARA will no longer be covered by any public insurer (outside of very narrow circumstances for which exceptions may be granted). 46 Once STELARA’s delisting and non-

40 See e.g., the announced policies of many governments in Canada for STELARA: Williams Affidavit, para 21. 41 Williams Affidavit, para 21. 42 Affidavit of Genia Radeva, Sworn July 25, 2024 (“Radeva Affidavit”), para 12. 43 Williams Affidavit, para 22. 44 Ibid. 45 Ibid. 46 Other Canadian public drug insurance programs have announced similar STELARA delisting periods, including in New Brunswick (non-medical switch to take place the earlier of November 30, 2024 and the patient’s special authorization expiration date), Nova Scotia (non-medical switch to be completed by December 1, 2024), Newfoundland and Labrador (no new STELARA authorizations as of April 5, 2024), Alberta (non-medical switch to

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medical switching is completed, Janssen will not be competing for publicly-insured ustekinumab patients.

36. FINLIUS is not listed on any public formularies in Canada and Janssen has not sought any such listing. 47 In any event, public insurers have a practice of covering only biosimilar products once they become available. 48 As a result, FINLIUS, like STELARA after delisting and non-medical switching is complete, will not compete with Jamteki or other ustekinumab products for publicly-insured patients.

Private insurers prioritize greater patient choice

37. Janssen offers insurers as part of its overall drug pricing strategy for a wide range of product offerings in Canada, including for drugs that are still patent-protected. 49 This is commercially necessary to enable insurers to list Janssen products on their formularies and to compete with other manufacturers’ drugs that treat the same conditions. Even before the compound patent for STELARA expired, Janssen . As a result, . 50