Canada Proposes Amendments to IP Rules for Pharmaceuticals

December 15, 2004

Canada Proposes Amendments to IP Rules for Pharmaceuticals
The Government of Canada has proposed on Tuesday amendments designed to improve the regulatory environment for pharmaceuticals by establishing more predictable and stable rules relating to the protection of intellectual property.

According to a press release by Industry Canada's Departmental Website, the amendments, proposed by Industry Canada and Health Canada, seek to optimize the balance between encouraging continued innovation in new drugs and promoting timely generic competition.

In September 2004, First Ministers committed themselves to improving access to safe and affordable drugs. The proposed amendments support the development of a national strategy on pharmaceutical management as agreed to by First Ministers.

The proposed amendments were pre-published in the Canada Gazette, Part I, on December 11, 2004. There will be a 75-day consultation period, during which the pharmaceutical industry and other interested parties may submit their comments to the responsible departments.

They also improve the international competitiveness of Canada's intellectual property regime for pharmaceuticals, eliminate a significant trade irritant with both the United States and Europe, and encourage more pediatric drug research.

The proposed amendments were pre-published in the Canada Gazette, Part I, on December 11, 2004. There will be a 75-day consultation period, during which the pharmaceutical industry and other interested parties may submit their comments to the responsible departments.

"These measures will not only stimulate research and innovation, but also competition to keep prices down," said the Honorable Ujjal Dosanjh, minister of Health. "They form an important building block as we work toward our national pharmaceutical management strategy."

"The government's actions will cut down on unnecessary litigation and clarify the rules, which fits into our focus on smart regulation and works to benefit both innovative and generic drug companies," said the Honorable David L. Emerson, minister of Industry.

"The measures also show our continued commitment to providing a stable environment in which research and development can flourish," he added.

The government's proposal would restore the original policy intent behind the Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regulations) and would enhance data protection under the Food and Drug Regulations.

The current regulations provide innovative pharmaceutical companies with a period of market exclusivity in order to recapture the high cost of research and development before facing competition from generic drugs.

Companies have, in some cases, been able to extend that period of market exclusivity in a manner that was not intended when the regulations were conceived. Under the proposed amendments to the PM(NOC) Regulations, this practice would stop.

This will accelerate the market entry of generic versions of patented brand-name drugs by cutting down on unnecessary litigation. At the same time, brand-name companies would be allowed to protect improvements to the original form if they are genuinely innovative and therapeutic.

In turn, the data protection provisions would be amended to provide new and innovative brand-name drugs with an internationally competitive guaranteed minimum period of market exclusivity of eight years — up from the current period of five years. A further amendment would provide an additional six months of data protection to drugs that have been the subject of clinical studies in children.

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