News Releases

Amendments to the Patented Medicines Notice of Compliance Regulations and Food and Drug Regulations
October 18, 2006

1) Amendments to Food and Drug Regulations (Data Exclusivity)

Increased ban on competition to eight years – a $100-million/year mistake

The October 5, 2006 amendments to the Food and Drug Regulations establish yet another regime to provide brand-name drug companies with an eight-and-one-half year (eight years plus six months pediatric exclusivity) ban on competition, even for non-patented drugs.

Under the new rules, a generic drug cannot receive Health Canada approval for eight years from approval of the equivalent brand-name drug, and the generic company cannot file its submission with Health Canada for at least six years after approval of the equivalent brand.

Canada’s pre-October 5 data protection regime of five years was in full accordance with international trade agreements such as the North American Free Trade Agreement (NAFTA) and the Trade-Related Aspects of Intellectual Property Right (TRIPS) agreement, and should have been left as it was.

The new regime goes far beyond provisions in the United States, and exceeds Canada’s trade commitments under NAFTA and TRIPS. Under data protection in the U.S., a generic drug submission cannot be filed for four years, and the generic is prevented from obtaining approval for only five years. Canada’s proposed eight years is 60 per cent longer. Yet generic market penetration in Canada is much lower than in the US. In Canada 44 per cent of prescriptions are filled by generic equivalents while that figure is about 56 per cent in the U.S., a gap that has widened in recent years.

This increased ban on competition will worsen the problem of soaring prescription drug costs in Canada. It is estimated that, had the eight-and-a-half-year ban on competition been in place over the past five years, it would have added at least $600-million to prescription drug costs in Canada, more than $100-million every year.

Six-month pediatric exclusivity

An additional six months of market monopoly is granted to brand-name drug companies if they file clinical trials “designed and conducted for the purpose of increasing knowledge of the use” of the drug in pediatric populations “and this knowledge would thereby provide a health benefit in those populations”.

Under the new rules, eight years of data protection is extended to eight years and six months if pediatric trials are filed within five years of the brand-name product receiving its Health Canada approval.

The value of a six-month monopoly for a major drug could be tens of millions of dollars, far exceeding cost or value of a pediatric trial. The amendment will not encourage pediatric research, but will merely lengthen the brand-name drug companies’ market monopolies. Brand-name drug companies will merely submit the trials they have already done for the Food and Drug Administration in the United States. Therefore the proposed amendment will not result in pediatric trials that would not otherwise be done.

The Canadian Generic Pharmaceutical Association (CGPA) argued that if amendments granting pediatric exclusivity were to be passed, there should have been a requirement that the pediatric trial be a new and useful trial done in Canada.

2) Amendments to the Patented Medicines (Notice of Compliance) Regulations

Changes to limit “evergreening” of drug patents

The only change that purports to help taxpayers, employers, consumers and the generic pharmaceutical sector is to limit “evergreening” of drug patents, whereby brand-name drug companies delay generic competition by adding and litigating many patents on the same medicine. However, the Supreme Court of Canada ruling in the Biolyse case makes clear that evergreening should already not be permitted. The change merely codifies the Supreme Court decision that, although not properly applied by Health Canada, made clear that evergreening is already prohibited. Furthermore, the Government of Canada’s change will not affect existing evergreening litigation.

Changes to limit the right of a generic pharmaceutical company to collect damages

The major substantive change to the Patented Medicine (Notice of Compliance) Regulations will make matters worse for taxpayers, consumers and the generic pharmaceutical industry by eliminating the ability of a generic pharmaceutical company to claim against a brand-name drug company for profits made by the brand company through unfair evergreening delays of generic competition. This right was included in the Regulations as a crucial protection for generic drug companies and consumers. Without it, there now exists no downside for a brand-name drug company to unfairly delay generic competition and no benefit for a generic company to pay for costly litigation even though it has been harmed. As a result monopolies will be unfairly extended without limit despite there being no patent that would be infringed.

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	Backgrounder: Amendments to the Patented Medicines Notice of Compliance Regulations and Food and Drug Regulations October 18, 2006
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