The headlines around the Comprehensive Economic and Trade Agreement have been largely focused on the impact for cheese lovers and the dairy producers, but there is also some impact for the Canadian pharmaceutical industry.
On Oct. 18 Canada and Europe announced an agreement in principle on the free trade agreement and it included language that could increase Canadian drug patent terms by up to two years.
Europe was reportedly pressuring Canada to strengthen exclusivities for brand name drugs. Ildiko Mehes, vice president and general counsel for Teva North America, Generics, says she is pleased with the outcome of the agreement.
“The EU was pushing aggressively for changes that would almost certainly have meant more profits for EU-based brand name pharmaceutical companies and added costs to the Canadian health-care system,” says Mehes. “The government clearly heard our perspective and adopted a balanced approach: There will be limited patent-term extensions in specified circumstances and a so-called ‘right of appeal’ for brand-name manufacturers in applications under the Patented Medicines (Notice of Compliance) Regulations.”
But it’s still very early days says Noel Courage, a patent agent and partner at Bereskin & Parr LLP, who notes the brand name industry has been lobbying for patent-term extension since early 1990s.
The brand name association Rx&D issued a statement saying it is happy about the patent-term extension and an improved right of appeal for some types of litigation.
Currently, Canada is the only country that allows brand name pharmaceutical companies to sue generic pharmaceutical companies multiple times on the same patents, adding to the costs and risks of bringing generic drug competition to the Canadian market.
In a statement, Jim Keon, president of the Canadian Generic Pharmaceutical Association, said: “While the specific implementation details will be crucial to the success of these critical reforms, CGPA welcomes the Government of Canada’s commitment to reduce the burden on the courts, bring earlier finality to pharmaceutical patent disputes, and deliver greater business certainty for generic pharmaceutical companies in Canada.”
The CGPA also said it isn’t happy about the patent-term extensions.
But as with many things about CETA, the devil will be in the details says Courage.
“Clients are quite interested in the patent-term extension but there’s really not much we can advise on yet; there’s very little in what came out,” says Courage. “There’s lot more lobbying to be done on CETA regarding all of this.”
The Europeans were asking for an extra five-year patent extension for their companies. Canada is the only G7 country that does not have this kind of patent-term restoration provision, says Greg Kanargelidis of Blake Cassels Graydon LLP.
“It was an outlier to begin with and the U.S. has a similar kind of rule for up to two years,” he says. “From the materials we’ve seen it appears that Canada will grant patent-term restoration to the innovators — the brand name companies — and that will be viewed as positive by those companies because if there are delays in the patent process for a new drug then they would be entitled to up to a two-year extension of their patent term.”
Courage says the main issues on the table were:
• providing patent-term extension;
• longer periods of protection of data exclusivity protection for brand name drugs to keep generics off the market;
• improving the right of pharmaceutical companies to appeal a loss in certain specialized pharmaceutical patent litigation cases called “NOC proceedings.”
Data protection times didn’t make an appearance in the agreement — it is just another way for generics to keep brand names off the market.
“Certainly the EU was pushing for an increase but I’ve heard informally there will be no changes in that area,” says Kanargelidis.
“Hopefully there will be consultation when individual parts of the treaty come down and they will get input from individual stakeholders,” says Courage.
It will likely take more than a year for the governments involved to finalize the agreement. With the next federal election in Canada expected to be in 2015, it raises the question as to whether CETA will be ratified by then. If it isn’t ratified, and remains an agreement in principle at election time, a change of power could put the deal in jeopardy.
