[Ip-health] Changes to Drug Patent Rules Will Drive Up Prescription Drug Costs

[John R. Fulton]

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"Supreme Court of Canada ruling in the Biolyse case makes clear that ever
greening
should already not be permitted."

Changes to Drug Patent Rules Will Drive Up Prescription Drug Costs

    TORONTO, Oct. 18 /CNW/ - Changes announced today to Canada's drug patent
rules will drive up prescription drug costs for taxpayers, employers and
consumers, Jim Keon, President of the Canadian Generic Pharmaceutical
Association (CGPA) said today.
    "On whole, regulatory amendments announced today by the federal
government will only add to the huge problem of soaring prescription drug
costs in Canada," said Keon. "Big Pharma is the big winner while taxpayers,
employers, consumers and Canada's generic drug makers lose out."
    Keon said the federal government's changes that provide brand-name drug
companies with an eight and a half year ban on competition go far beyond the
five years required under international trade agreements such as NAFTA and
will add hundreds of millions to Canada's prescription drug bill.
    "Had the current rules been in place over the past five years, it would
have added an additional $600-million to prescription drug costs in Canada,"
Keon said.
    Other regulatory changes announced today attempt to limit "evergreening"
of drug patents by brand-name drugs companies that keeps lower-cost generic
competition off the market. Brand-name drug companies have exploited legal
loopholes in these regulations to delay generic competition sometimes for
years after the initial 20-year patents expire.
    "The changes regarding evergreening were overdue and merely codify a
Supreme Court decision that, although not properly applied by Health Canada,
made clear that evergreening is already prohibited," Keon said. "This change
will not, however, affect existing evergreening litigation that is delaying
Canadians' access to lower-cost generic equivalents."
    (Please see attached background note on changes to the Patented
Medicines
(Notice of Compliance) Regulations and Food and Drug Regulations.)

    About the Canadian Generic Pharmaceutical Association

    The Canadian Generic Pharmaceutical Association (CGPA) represents
Canada's generic drug industry - a dynamic group of companies that
specialize
in the production of high quality, affordable generic drugs and fine
chemicals
and in conducting the clinical trials required for government approval of
generic drugs. The industry plays an important role in controlling
health-care
costs in Canada. Generic drugs are dispensed to fill 44 per cent of all
prescriptions but account for less than 18 per cent of the $17-billion
Canadians spend annually on prescription medicines.



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                                Backgrounder:
    Amendments to the Patented Medicines Notice of Compliance Regulations
                        and Food and Drug Regulations

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    >>

    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.



For further information: Jeff Connell, Director of Public Affairs,
Canadian Generic Pharmaceutical Association (CGPA), Tel: (416) 223-2333,
Fax:
(416) 223-2425 Email: jeff@canadiangenerics.ca, Website:
www.canadiangenerics.ca



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