Prescription drug patents and generic drugs in Canada

Prescription drug patents are a contentious issue in Canada and many other countries. On one hand, strong intellectual property protections for drug creators helps incentivize development of novel remedies and ensures that companies are adequately compensated for the costs and risk they assume in the research and development process. The lucrative revenue earned by drug companies during the period their innovations are patent-protected also benefits the public, as this revenue fuels future research and development initiatives.[1] However, a balance must be struck as excessive IP protection and onerous regulations can lead to a monopolization of the drug market and would stifle access to lower-cost generic medications.

 

Patent Length

The standard length of patent protection in countries such as Canada and the United States in 20 years. However, pharmaceutical companies can also apply for an extension under certain circumstances. This extension can only be for a maximum of two years in Canada, however in the US this can range 5 to 14 years. In Canada, this extension will take effect if a Certificate of Supplementary Protection (CSP) is granted if certain conditions are met, in order to compensate for time which was lost due to Health Canada approval delays.[2] This type of extension is also available in the European Union, and is similarly referred to as a Supplementary Protection Certificate (SPC) there.[3]

 

Market Exclusivity

Although the length of a patent is 20 years, the actual length of market exclusivity is often quite shorter.[4] This is because companies often don’t get the product to market until almost half of this time has passed. For example in the United States, the actual market exclusivity period for patented drugs in practice is around 12.5 years, after which generic equivalents enter the marketplace.[5]

In Canada, there is a minimum period of market exclusivity guaranteed by regulators, regardless of the length of a patent. Generic drug producers cannot receive regulatory approval until the “brand drug” has been on the market for at least eight years. These regulations exist to guarantee drug makers a certain amount of market exclusivity, since regulatory approvals by Health Canada can take up a good chunk of a brand drug’s patent time.[6] These protections arise not from the Patent Act, but the data protection provisions of the Food and Drug Regulations of the Food and Drugs Act.

Further complicating matters, often multiple patents may apply to a single drug, meaning that the actual length of patent protection applying to the medication may be longer due to these staggered expiry dates.[7]

 

Generic drugs

Generic and brand-name drugs have identical active ingredients, and generic drugs must also meet the same Health Canada requirements. Therefore, generic drugs often serve as a lower-cost alternative for patients. Sometimes even the brand name manufacturer itself might produce a generic version of its own drug.[8] However, while the ingredients of generic drugs are the same, the appearance and flavour may be different. This is because while patent protection has expired, the manufacturer still maintains their trademark rights.[9]

Once drugs lose patent protection, lower-price generics quickly siphon off as much as 90% of their sales.[10] The introduction of generic medicines significantly decreases revenues for pharmaceutical companies. For example, in 2007 Pfizer earned more than $1.9 billion from Protonix, but after the patent expired and generic versions were introduced this decreased to only $480 million in 2010.[11]

 

Litigation

Patents are also subject to a significant degree of litigation. For example, in 2012 the Supreme Court of Canada found that Pfizer’s patent for Viagra (which is notably used to treat erectile dysfunction) was invalid. In Teva Canada Ltd v Pfizer Canada Inc, the Court found that Pfizer’s original patent for Viagra was invalid since it did not comply with the requirements of section 27(3) of the Patent Act,[12] which requires patent applications to “correctly and fully describe the invention”.[13] This did not occur, as the claims in the patent ended with two individually claimed compounds, rather than specifying the “useful compound” – sildenafil – which treated erectile dysfunction. The Court’s finding allowed for Teva to immediately start offering a generic version of Viagra in 2012.[14] By contrast, in the United States the patent for Viagra didn’t expire until 2019.

Litigation is becoming increasingly common in Canada, and has the effect of both burdening the Federal Court with a high volume of patent cases and costing companies millions of dollars to settle patent disputes. For example, Apotex (a producer of generic drugs) has claimed it has spent between $300 to 400 million on litigation during a ten-year period in Canada alone. These costs are undoubtedly passed on to consumers. However, successful litigation by generic drug manufacturers can benefit the public, since it allows for more affordable generic drugs to enter the market.[15]

Generic drug manufacturers often pursue litigation in order to challenge patents and introduce generics to the market before the expiry of the patent. Under the Patented Medicines (Notice of Compliance) Regulations, a drug manufacturer can challenge the validity of a patented medicine.[16] In 2008, The Globe and Mail described that “Federal Court judges are swamped with a rising tide of complex litigation” that involves “arcane scientific disputes”. Generic drug manufacturers such as Apotex and NovoPharm are “wage expensive courtroom battles” in the hopes of introducing generic drugs into the market. Conversely, drug manufacturers are eager to drag generic manufacturers to court in the hopes of stifling or delaying their plans to produce generics.[17]

One recent example of such litigation in Canadian courts was the case of Allergan Inc. v. Juno Pharmaceuticals Corp which was decided by the Federal Court in December 2023. In Allergan, the defendants sought to invalidate the plaintiff’s patent for LUMIGAN RC, which is used to treat glaucoma and ocular hypertension. The court ultimately found that the patent was not invalid for obviousness, or for insufficient disclosure.[18]

 

BIBLIOGRAPHY

[1] Paul Grootendorst, Ron Bouchard & Aidan Hollis, “Canada’s laws on pharmaceutical intellectual property: the case for fundamental reform” (2012) 184:5 CMAJ 543, online: National Library of Medicine <https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3307559/>

[2] Beverly Moore et al., “Regulatory context for patented pharmaceuticals and biotechnology drugs in Canada” (2 Dec 2021), online: Borden Ladner Gervais LLP <https://www.blg.com/en/insights/2021/12/regulatory-context-for-patented-pharmaceuticals-and-biotechnology-drugs-in-canada>

[3] J. Bradley White & Nathaniel Lipkus, “Canadian courts are interpreting supplementary pharmaceutical patent protection more broadly than their EU counterparts” (24 Feb 2021), online: Osler, Hoskin & Harcourt LLP <https://www.osler.com/en/resources/regulations/2021/canadian-courts-are-interpreting-supplementary-pharmaceutical-patent-protection-more-broadly-than-th>

[4] “Frequently Asked Questions on Patents and Exclusivity” (5 Feb 2020), online: US Food & Drug Administration <https://www.fda.gov/drugs/development-approval-process-drugs/frequently-asked-questions-patents-and-exclusivity>

[5] Reed F. Beall, Jonathan J. Darrow & Aaron S. Kesselheim, “A Method for Approximating Future Entry of Generic Drugs” (Dec 2018) 21:12 Value in Health 1382, online: Value in Health <https://doi.org/10.1016/j.jval.2018.04.1827>

[6] Supra note 1

[7] Ibid

[8] “Similarities and Differences Between Brand Name and Generic Drugs”, online: Canada’s Drug and Health Technology Agency <https://www.cadth.ca/similarities-and-differences-between-brand-name-and-generic-drugs>

[9] “Generic Drugs: Questions & Answers” (16 Mar 2021), online: US Food & Drug Administration <https://www.fda.gov/drugs/frequently-asked-questions-popular-topics/generic-drugs-questions-answers>

[10] Jack DeRuiter & Pamela L. Holston, “Drug Patent Expirations and the ‘Patent Cliff’” (20 Jun 2012) 37:6 US Pharm 12, online: US Pharmacist <https://www.uspharmacist.com/article/drug-patent-expirations-and-the-patent-cliff>

[11] Ibid

[12] Patent Act, RSC 1985, c P-4

[13] Teva Canada Ltd. v. Pfizer Canada Inc., 2012 SCC 60 [Teva].

[14] “Viagra patent tossed out by Supreme Court” (8 Nov 2012), online: CBC News < https://www.cbc.ca/news/business/viagra-patent-tossed-out-by-supreme-court-1.1216466>

[15] Supra note 1

[16] Greg Hagen et al., Canadian Intellectual Property Law: Cases and Materials, 3rd ed (Toronto: Emond Publishing, 2022) at 757.

[17] Jacquie McNish, “As patent cases clog courts, drugs are a lawyer’s best friend” (12 Mar 2008), online: The Globe and Mail < https://www.theglobeandmail.com/report-on-business/as-patent-cases-clog-courts-drugs-are-a-lawyers-best-friend/article718533/>

[18] Allergan Inc. v. Juno Pharmaceuticals Corp., 2023 FC 1686 [Allergan].