Canada-Europe Free Trade Deal Gives Brand Name Pharmaceutical
Companies a Shot in the Arm
Canada and Europe announced an agreement in principle on a
Comprehensive Economic and Trade Agreement
("CETA") that will potentially increase
Canadian drug patent terms by up to 2 years.
CETA was the product of several years of negotiations. It is a
wide-ranging trade agreement covering diverse topics such as
foreign ownership and investments, access to public procurement
contracts, automobiles, food (eg. beef and dairy products) and
agriculture. Pharmaceuticals were also a prominent part of the
discussion. The agreement was negotiated in secret. Europe was
reportedly pressuring Canada to strengthen exclusivities for brand
name drugs. Leaked drafts of the agreement showed that the main
pharmaceutical intellectual property issues on the table were: i)
providing patent term extension, ii) longer period of data
exclusivity protection for brand name drugs to keep generics off
the market, and iii) improving the right of pharmaceutical
companies to appeal a loss in certain specialized pharmaceutical
patent litigation cases called "NOC Proceedings".
Not many specifics of the agreement in principle were released
when it was announced on October 18, 2013. Patent term extension
has been agreed upon. Media outlets attending a Canadian government
press briefing reported that patent term extension would be
provided for up to 2 years in the case of government regulatory
delays in approving the drug (see: Financial
Globe & Mail). This is a similar concept as US patent term
extension for FDA regulatory delays. It was not stated whether this
extension would be available to currently approved drugs or only
drugs entering the market after the new rules come into effect. The
only written government statement provided online today was,
"Patents: With respect to the pharmaceutical
sector, CETA will provide extended protection for
innovators..." (Government of Canada. Opening New Markets
in Europe – an Overview. 2013).
Data exclusivity was not addressed in government statements, so
it is likely not part of the agreement in principle. It is unclear
whether it remains a possible addition to the final version of the
trade deal, since there is still likely to be extensive CETA
lobbying by the brand name and generic drug industries.
Canada's brand name pharmaceutical association, named
Rx&D, issued a press release stating that it was informed by
the government that improved brand name rights for patent appeals
in NOC Proceedings are part of CETA. No additional details were
provided. The Canadian Generic Pharmaceutical Association
("CGPA") press release said it received a letter from
the Canadian government that confirmed the right of appeal point
but also stated that the government would commit to reducing the
occurrence of multiple patent cases on the same patents. The CGPA
also said that CETA provides an exception under the patent term
extension for activities relating to generic drugs to be exported.
Again, the effects on industry will greatly depend on the specific
implementation of such laws. Some of the information from the
industry associations may refer to government policy positions that
are outside the strict terms of the agreement in principle in CETA,
but could nonetheless be additional to CETA amendments to Canadian
It will take some time for the governments to draft and finalize
an agreement, likely more than a year. The next Canadian federal
election is expected in 2015, so the government will aim to have
the deal completed by then. CETA would be in jeopardy if it
remained an agreement in principle at election time and there was a
change in power.
The federal governments must then pass new laws to implement
CETA before it comes into effect. It is unclear the extent to which
the government would consult with Canadian stakeholders prior to
bringing in new laws. Implementation of this complex trade
agreement would be staged so that different portions of laws come
into effect at different times. Stay tuned for more information
about the timing of pharmaceutical patent changes coming into
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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