Canada: Pharmacapsules @ Gowlings - November 2007

Last Updated: November 29 2007

Edited by Jennifer Wilkie and Chantal Saunders


  • New Regulations Respecting Benefits and Promotional Allowances in Québec
  • Upcomming Amendments to the Patented Medicines Regulations, 1994
  • Competition Bureau Study Finds Generic Canadians Are Paying Too Much For Generic Drugs
  • Pharmacy Association Defends Generic Drug Prices
  • Proposed Legislation to Regulate Over The Counter Drug Advertisements
  • Recent Developments In Programs To Foster Optimal Medication Use And Prescribing
  • World Health Organization Says Innovation Is Essential To Improving Public Health
  • President Bush Acts on Recommendations from the Interagency Working Group on Import Safety
  • Funding Reports for Ontario's Public Drug Programs
  • IMS Health Forecasts Slower Growth in Drug Sales for 2008
  • Recent Cases
New Regulations Respecting Benefits and Promotional Allowances in Québec

By Wayne Critchley

The Government of Québec has introduced new regulations under the Act Respecting Prescription Drug Insurance governing the rebates and other benefits offered by drug manufacturers to pharmacists. These regulations follow from changes to Québec's Pharmaceutical Policy and Bill 130 and are similar to new provisions in Ontario.

The measures specifically restrict the rebates and benefits traditionally offered by generic drug manufacturers to pharmacies to encourage them to stock their products. Such rebates are no longer permitted but generic manufacturers are authorized to provide benefits in the form of professional allowances that are directed at certain activities specified in the regulations. In the case of generic manufacturers, these professional allowances may not exceed 20% of the total value of the sales by the manufacturer of generic drugs on the Liste des médicaments to a pharmacy under the basic prescription drug insurance plan.

The regulations also provide that innovative drug manufacturers may provide pharmacists with authorized benefits, other than a promotional allowance, for a number of specified activities including:

  • Training and continuing education programs and activities in Quebec;
  • The reasonable cost of activities intended for the general public that take place in the pharmacy concerning health promotion, disease prevention and similar matters;
  • Educational equipment or material used in the pharmacy; and
  • The device to measure glycaemia or the insulin pen given without consideration to a patient by the pharmacist.

In the case of authorized benefits which may be provided by innovative drug manufacturers, there is no maximum limit as is specified for generic drug manufacturers in the case of professional allowances.

Upcomming Amendments to the Patented Medicines Regulations, 1994

By Wayne Critchley

The Patented Medicine Prices Review Board (PMPRB) has announced that it intends to proceed to obtain ministerial and government approval of proposed amendments to the filing requirements under the Patented Medicines Regulations, 1994 which were published in the Canada Gazette, Part I on October 6, 2007. These changes, which will increase the filing requirements for patentees and shorten some of the time frames for filing, also include a controversial provision that would require patentees to identify the "type" of discount, rebate or other price concession included in the average price of the patented medicine. The Board has stated that it will provide information and advice to patentees on compliance with these changes should they come into effect.

For more information, please visit:

Competition Bureau Study Finds Generic Canadians Are Paying Too Much For Generic Drugs

By Isabel Raasch

The Competition Bureau released its Generic Drug Study on October 29, 2007. The Bureau initiated the Study in response to findings that the price of prescription generics in Canada is higher than in other countries. The Study concludes that although the generic drug market has become more competitive over the past 15 years, the benefits of that competition are not translating into lower drug prices for Canadians. Instead, the Bureau found that the majority of the benefits of the competition were being gained by pharmacies. Indeed, to compete for space on pharmacies' shelves, generic manufacturers offer rebates (averaging 40 % of the price the pharmacy is invoiced) or other payments to pharmacies in most provinces. Under the present system, in most provinces, pharmacies have limited incentive to pass on these cost savings to those who pay for them - public and private plans, people paying out of pocket, and taxpayers.

The Study states that the Bureau will be continuing its work in the generic drug sector by examining possible options for obtaining the benefits from competition and the impediments to their adoption.

For more information, please visit:

Pharmacy Association Defends Generic Drug Prices

By John Norman

As noted above, the Canadian Competition Bureau recently released a report on the price of generic drugs in Canada and indicated therein that although many generic manufacturers offer up to 40% rebates on generic drugs, pharmacies are not passing these rebates on to consumers.

This report has caught the attention of at least one pharmacy association, which has responded by stating that pharmacy services are underfunded by governments, thus pharmacies use manufatures rebates to help fill the funding gap left by governments. For example, the association claims that rebates are used by pharmacies to help offset other benefits offered by pharmacies such as counselling and consulting with patients. Regardless, the Bureau has indicated that it will investigate how to shift rebates offered by generic manufacturers from pharmacies to public and private insurers and consumers.

For more information, please see:

Proposed Legislation to Regulate Over The Counter Drug Advertisements

By Scott Robertson

New legislation has been introduced in response to the Food and Drug Administration (FDA) advisory on banning over-the-counter (OTC) cough and cold medicine. The Non-Prescription Drug Modernization Act will give the FDA the authority to regulate OTC drug advertisements. Advertisers could be levied with a monetary fine for infractions outlined in the new Bill.

If passed, the new legislation will allow the FDA to quickly ban the marketing of OTC drugs while the rulemaking process is sorted out. Currently OTC drug ads are under the Federal Trade Commission's jurisdiction, with the FDA overseeing ads for prescription drugs

Adonis Hoffman, Senior Vice President and Counsel to the American Association of Advertising Agencies, has stated that there are already "ample and appropriate regulatory penalties in place to handle these problems" and is not sure whether "there is a need for new changes."

For more information, please visit:

Recent Developments In Programs To Foster Optimal Medication Use And Prescribing

By Wayne Critchley

The Health Council of Canada has issued a report on a forum it hosted in June, 2007, Safe And Sound: Optimizing Prescribing Behaviours - Summary of Main Themes and Insights. The Council states that it wants to encourage government action on the National Pharmaceuticals Strategy and, in particular, action to promote the optimal prescribing of medicines. Among other things, the report calls for further efforts in providing education and information for patients and prescribers.

The Canadian Agency for Drugs and Technologies in Health (CADTH), which issued a press release saying it welcomes the Health Council's report, has also announced the launch of "Rx for Change" a publicly accessible database of studies and reports on interventions to support changes in prescribing and utilization of medicines. CADTH will host a web cast on December 10, 2007 to introduce this resource to interested persons.

For more information, please visit Health Council of Canada:


World Health Organization Says Innovation Is Essential To Improving Public Health

By Wayne Critchley

The Director General of the World Health Organization has reminded countries of the need to encourage innovation as they seek ways to improve access to health care in the world's poorer countries. The remarks were made by Dr. Margaret Chan in opening a session of the Intergovernmental Working Group on Public Health, Innovation and Intellectual Property on November 5, 2007.

Noting that for many diseases of the poor, there are inadequacies in the treatments, and the diagnostic tools, available, Dr. Chan said that "Public health cannot move forward without innovation." Furthermore, it must be ongoing:

The need for innovation is constant. Resistance develops and drugs fail, creating an urgent need for second- and third-line medicines. We have seen this problem most acutely with HIV/AIDS. We are seeing it again with the spread of extensively drug-resistant tuberculosis, which is far more costly and difficult to treat. For some diseases, we know that our greatest hope rests with the development of vaccines.

In her remarks, Dr. Chan also emphasized her commitment to equitable access to health care. Health has become more important on the international agenda because of the recognition that better health can reduce poverty. Chronic diseases impose the greatest burden on low- and middle-income countries and there is a challenge to promote health research and development in areas that most affect developing countries.

It is not possible to achieve those goals without also encouraging innovation:

The challenge is to work on multiple fronts: to meet the immediate need for equitable access to quality, affordable medicines, while also, at the same time, working to stimulate innovation.

For a copy of Dr. Chan's speech, please visit:

President Bush Acts on Recommendations from the Interagency Working Group on Import Safety

By Natalie de Paulsen

The Interagency Working Group on Import Safety reports that there is an increasing volume of imports entering the U.S. and last year the U.S. imported nearly $2 trillion of goods through more than 825,000 importers. By 2015, the value of imports is anticipated to triple. Acting on the Working Group's recommendations, on November 6, 2007, President Bush proposed that various steps be taken to improve the import safety system, including:

  • authorizing the FDA to pursue mandatory recalls of food products when unsafe food poses a threat of serious health consequences or death and where a firm either refuses to undertake a voluntary recall or is not acting with sufficient speed;
  • increasing the presence of U.S. inspectors abroad and training for foreign inspection agencies; and
  • creating a stronger certification process to foster compliance with U.S. safety standards while facilitating trade.

President Bush's proposal requires approval by Congress. For more information, please see the Working Group's web-site at

For more information, please visit:

Funding Reports for Ontario's Public Drug Programs

By Chantal Saunders

New reports have been published by the Ontario Ministry of Health and Long Term Care, relating to the recommendations of the Committee to Evaluate Drugs ("CED") for various drugs. CED makes recommendations regarding whether drugs should be funded by being listed on the Ontario Drug Benefit Formulary.

For more information, please see:

IMS Health Forecasts Slower Growth in Drug Sales for 2008

By Andrea Flewelling

According to an annual forecast from IMS Health (a service which provides market data on prescription medicines), competition from generic drugs is predicted to take a toll on global pharmaceutical sales in 2008, slowing growth slightly despite emerging markets likely playing a greater role in overall growth.

It is anticipated that while generic versions of commonly used medicines will likely eat into profits for some large drug companies the development of expensive new medicines will help to support overall revenue.

In a unique turn of events the world's top seven markets will contribute only half of pharmaceutical growth while seven emerging markets will account for almost 25 percent. The United States is projected to post a historic low in sales growth whereas China, Brazil, Mexico, South Korea, India, Turkey and Russia are expected to grow by approximately 12 percent.

For more information, please see:

Recent Cases

By Beverley Moore

Apotex v. Servier; Appeal of Interlocutory Motion; November 1, 2007 - perindopril

The Federal Court of Appeal overturned the decision of the Federal Court and reinstated a number of paragraphs in the Statement of Defence and Counterclaim relating to the issue of inventorship.

The Federal Court had struck paragraphs relating to inventorship on the basis that this issue was determined by Consent Order during conflict proceedings, and could not be re-litigated. The Court of Appeal found that the Defendant in this action was not a party to the conflict proceedings or the Consent Order, so it could not be said to be attempting to re-litigate issues found in that Order. As a result, it was wrong to conclude that the invalidity allegations regarding the issue of inventorship in the Defendant's pleadings constituted an abuse of process.

Thus, it was not plain and obvious that the Defendant could not succeed on its inventorship allegations, and they should therefore not have been struck.

The full text of the decision can be found at:

Altana Pharma v. Novopharm; Interlocutory Motion on 55.2 Proceeding - Section 7 of the Canada Evidence Act; October 23, 2007 -

The Federal Court found that each side is limited to five experts in a case, subject to requesting leave of the Court to vary that number.

The Court referred the matter back to the Prothonotary to determine whether that number should be varied in the specific circumstances of the proceeding.

The full text of the decision can be found at:

Lilly v. Novopharm; Decision on Motion for Leave to Intervene; October 23, 2007 - olanzapine

Four trade associations sought leave to intervene in an appeal of a 55.2 proceeding, namely the Canadian Chamber of Commerce, BIOTECanada, Canada's Research-Based Pharmaceutical Companies and the Canadian Generic Pharmaceutical Association. The Court of Appeal denied all four motions for leave to intervene. The Court of Appeal found that litigants are ignoring the summary nature of NOC proceedings. Furthermore, the Appellant in the proceeding has commenced an infringement action where the same issues may be raised. Thus, the interests of justice would not be well served by allowing these interventions.

The full text of the decision can be found at:

Lilly v. Novopharm; Motion to Dismiss Appeal for Mootness; November 6, 2007 - olanzapine

The Federal Court of Appeal heard the respondent generic company's motion to dismiss the appeal on the basis of mootness. The Court, one justice dissenting, granted the motion, and dismissed the proceeding.

The majority of the Court held that recent decisions from the Court of Appeal have not changed the issue of whether an appeal of NOC proceeding is moot once an NOC is issued to the generic company. The possibility that other generic companies can rely on the decision in subsequent proceedings does not change the fact that the appeal is moot with respect to the NOC in question. The Court refused to exercise its discretion to hear the appeal on the basis that NOC proceedings are intended to be summary in nature.

The dissenting opinion also found that the appeal was moot. However, the dissenting judge would have exercised his discretion to hear the appeal, in the interest of judicial economy and due to the uncertainty surrounding the validity of selection patents.

The full text of the decision can be found at:

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