Canada: Pharmacapsules@Gowlings - December 20, 2007

Last Updated: January 21 2008

Edited by Jennifer Wilkie and Chantal Saunders


  • Biomara Moving To The United States
  • Report On The Statutory Review Of Sections 21.01 To 21.19 Of The Patent Act (Access To Medicines) Released
  • Free Trade Zones Facilitate Counterfeit Drug Trade
  • Prescription Drug Advertising Update
  • Parliamentary Committee Calls For Improvements To The Common Drug Review Process
  • Recent Cases
Biomara Moving To The United States

In its 2007 "Mobilizing Science and Technology to Canada's Advantage" Report (the "Report"), the Federal Government recognizes the importance of building a strong science and technology infrastructure to improve Canada's competitiveness and productivity. The Report acknowledges that while Canada has tremendous strengths, it also faces numerous challenges which need to be addressed comprehensively to enable the country to continue to build a competitive and sustainable economy. The Report sets out a strategy involving greater private sector investment, world-class research excellence and attracting, retaining and developing talented, skilled and creative people in the science and technology disciplines.

The Canadian government must be somewhat dismayed by Edmonton-based Biomara Inc.'s recent decision to move the company to the US and to establish new headquarters in the Seattle area. Biomara, which is listed on the Toronto Stock Exchange in Canada and on NASDAQ in the US, is a biotechnology company specializing in the development of innovative therapeutic products for the treatment of cancer. It has just under 80 employees, most of whom are based in Edmonton. From a financial perspective, Biomara is not particularly significant, with revenues of just over $4 million and net losses in the last two years of $18 million and $19 million. In 2007, its stock price slumped to under $1.00, resulting in NASDAQ threatening to delist the company.

However, Biomara is also Alberta's oldest biotech company, formed in 1985 as a spin-off from the University of Alberta. It has been estimated that more that $300 million of capital has been invested into the company over the years.

Biomara, which is changing its name to Oncothyreon, stated that its move out of Canada is designed to raise its profile in US financial markets and provide access to a larger pool of investment capital. While the company did advise that the relocation of Biomara's headquarters to Seattle is not expected to result in a significant change in its Edmonton operations, its CEO stated that moving to a major biotechnology hub such as Seattle will provide greater opportunity to attract and retain key personnel.

A sceptic might suggest that Biomara's decision to leave Canada was influenced by the fact that its recently-appointed CEO is from the Seattle area and that its new Chairman of the Board is also based in the US.

Nonetheless, Biomara's move highlights the importance of Canada executing as quickly as possible on the Report's strategies. In particular, the issue of increasing private sector investment in science and technology, and finding structures and incentives that can increase financial contributions by the private sector, must be addressed. A vibrant, sustainable and competitive science and technology sector in Canada requires no less.

For more information, please see:
By: Michael Herman

Report On The Statutory Review Of Sections 21.01 To 21.19 Of The Patent Act (Access To Medicines) Released

The CAMR report was released on December 14, 2007. In essence, the report does not suggest fundamental change. The report concludes that insufficient time has passed and insufficient evidence has accumulated since the coming into force of CAMR to warrant legislative changes to the regime. The conclusion is that the Government should focus on non-legislative measures to improve access to medicines in the developing world, until a more definitive assessment can be made (p. 7).

Summary of input from review deals with the following issues, but does not make specific recommendations; the report outlines the positions of those who submitted comments on these topics:

  1. Eligible importers
  2. Eligible pharmaceutical products
  3. Health Canada's Drug Review
  4. Application process
  5. Voluntary licence request
  6. Duration of licence
  7. Royalties paid to patent holders
  8. The good faith clause
  9. Quantities exported
  10. Anti-diversion measures
  11. Termination of licence

Other considerations were noted. These included a discussion of the following topics:

  • Global burden of HIV/AIDS, tuberculosis and malaria
  • International initiatives and partnerships
  • Country based initiatives
  • ARV therapies as a model to treat HIV/AIDS

In the Analysis section, the report notes that there are a number of WTO members that have amended their laws, but that no two regimes are perfectly aligned and CAMR contains a number of measures that have not been emulated elsewhere. These include reliance on pre-approved lists of products and countries, and the grant of a licence being contingent upon the health and safety review of the product. Also, whereas many other regimes waive the requirement for a voluntary licence request, in cases of national emergency, CAMR does not (p. 29).

It is noted that divergent approaches can be equally compliant with the TRIPs obligations. There are operational advantages to scheduling of products and countries. The process is clarified and expedited, with minimal discretion of the Commissioner, and the outcomes are far less vulnerable to legal challenge. The Apotex licence is noted, and specifically, the fact that the licence was granted less than three weeks after the paperwork was filed. However, it is noted that the schedules require regular upkeep. It remains to be seen if the intended operational advantages outweigh the drawback in time and resources required to maintain them.

Similar reasoning was applied to the requirement for health review of exported products by Health Canada.

The report notes that the voluntary licence requirement is more complex. Canada believed it was necessary. The extent to which this is consistent with Article 31(b) remains the subject of debate. Even if this aspect were eliminated, notification of the importing country remains a requirement. The Apotex example is noted, and, in respect of the requirement for a voluntary licence stage, it was noted that "To the extent that one can assert that there was a delay between these two steps, it was relatively insignificant." (at page 32, in speaking of the voluntary licence and compulsory licence stages).

The report states at page 35 as follows:

"In light of all of the above, the view that certain unique feature of CAMR make it less permissive or operationally sound than the legislation subsequently adopted in other countries to have implemented the waiver does not appear to be substantiated by the available evidence at this juncture. While there may be room to improve CAMR, as there is with any legal framework, more time, evidence and analysis is needed to determine if changes to these features, along the lines of the amendments proposed by various stakeholder groups, would make a meaningful difference in the volume and frequency of exports...'

'Furthermore for the moment at least, the granting of the first and only export licence under the waiver to Apotex, and the circumstances surrounding it, suggest that CAMR works reasonably well and quickly, provided an importing country has made the requisite notification to the WTO. "

In conclusion, the report notes that more could be done to address the underlying economic barriers and will undertake further analysis of this issue, once greater experience with the waiver is gained. Outreach on awareness, and other initiatives, such as the Budget 2007 new tax incentive to encourage pharmaceutical donations are noted. Direct governmental targeted initiatives in providing medicines and vaccines to developing countries were also noted.

For more information, please see:
By: Adrienne Blanchard

Free Trade Zones Facilitate Counterfeit Drug Trade

A set of articles by investigative reporter Walt Bogdanich published in the New York Times and the International Herald Tribune on December 17, 2007 describe how international free trade zones such as those in the United Arab Emirates, Jordan, Mauritius and Panama are easing the passage of counterfeit drugs. Experts cited in the articles indicated that counterfeiters use free trade zones to hide or sanitize a drug's provenance or to make, market or re-label adulterated products. Indeed, according to Ilisa Bernstein, Director of Pharmacy Affairs at the U.S. Food and Drug Administration: "free trade zones allow counterfeiters to evade the laws of the country because often times the regulations are law in these zones." This is because most shipments of goods that go through free trade zones do not officially enter the country where the zone is located, and are therefore subject to fewer bureaucratic entanglements and regulation. In addition, counterfeiters can use the zones as a way to hide where their products are originally sourced. The articles singled out Dubai as a free trade zone that is particularly attractive to counterfeiters because (a) of its strategic location; (b) of the high volume of goods that move through it; and (c) there is some confusion as to whether normal Dubai customs have jurisdiction in the free trade zones although the authorities in Dubai have shown a willingness to act when drug company investigators tip them to possible counterfeits. According to the articles, nearly a third of all counterfeit drugs confiscated in Europe in 2006 came via the United Arab Emirates.

For more information, please see:
By: Isabel J. Raasch

Prescription Drug Advertising Update

Health Canada has recently clarified its position with respect to using prescription drug package representations in drug reminder and help-seeking advertisements directed to consumers. With respect to reminder advertisements, Health Canada has traditionally taken the position that reminder advertisements, where the name of a prescription drug is mentioned without reference to a disease state, does not go beyond the name, price and quantity restrictions outlined in the Food and Drug Regulations. With respect to help-seeking advertisements, where a disease state is discussed, but no reference is made to a specific prescription drug product, Health Canada has taken the position that such advertisements are not considered product advertisements pursuant to the Health Canada policy "The Distinction Between Advertising and Other Activities".

Health Canada has clarified its position, so that the depiction of easily recognizable branded product packages in a manner that the prescription drug indications can be identified by the consumer, would go beyond the name, price and quantity restrictions outlined in the Food and Drug Regulations.

For a copy of the Marketed Health Products Directorate Notice, please see:
By: Lewis Retik

Parliamentary Committee Calls For Improvements To The Common Drug Review Process

The House of Commons Standing Committee on Health has released its report on the Common Drug Review (CDR), the federal/provincial/territorial process to review the clinical efficacy and cost effectiveness of new drugs for purposes of recommending coverage under 18 public drug programs across Canada, except in Québec. In hearings conducted last spring, the committee heard from all major stakeholders including federal and provincial governments, the pharmaceutical industry, patient advocacy groups, and officials from the Canadian Agency for Drugs and Technologies in Health (CADTH) which is responsible for the delivery of the CDR.

Although the Standing Committee considers the CDR to be "a good start" and notes that participating drug plans look upon it favourably, it also expressed strong agreement with the views of other stakeholders that further improvements are necessary. In particular, the Committee calls for increased transparency and greater public involvement in the CDR, the introduction of an appeal process, and specific approaches to review drugs for rare disorders and first-in-class medicines.

For a more complete summary of the report, please visit Drug Pricing & Reimbursement @ Gowlings: Htmfiles/V1N21_20071213.en.html

For a copy of the report of the Standing Committee on Health, please visit:
By: Wayne Critchley

Recent Cases
Shire Biochem Inc. v. Canada; Janssen-Ortho Inc. v. Canada; December 13, 2007, Judicial Review of a PMPRB decision; Adderall XR®, Concerta®

The Court reasoned that because the Patent Act defines the patentee as the person entitled to the benefit of the patent for that invention, and because the Patent Act provides the ability to sue for reasonable compensation from the time the patent application is laid open, once the patent is granted a patentee is entitled to the benefit of the patent from the date the patent application was laid open. Therefore, since the patentee enjoys the patent rights from the time a patent is laid open, once it issues, then the patentee is deemed by the Patent Act to enjoy those rights as a patentee and must be taken to have sold medicines "while a patentee" and as a person entitled to the benefits of the patent during that time.

Thus, the Board was correct in deciding that it was Parliament's intent that the Board's jurisdiction over the prices for medicine should extend to the period between the laid open date and the grant of the patent, provided that the patent is granted. The Board cannot review prices during the laid open period until a patent has granted.

The Court rejected arguments that this interpretation of the Act was retrospective or ultra vires the power of Parliament.

The full text of this decision can be found at:

Abbott Laboratories Limited et al. v. The Minister of Health et al. December 7, 2007, Interlocutory Motion On The 55.2 Proceeding; Lansoprazole

In this decision, the Court again dismissed a motion by an innovator to reverse the order of evidence in a 55.2 proceeding. The innovator relied on what it alleged were unique circumstances in this case, namely that this proceeding will re-litigate the issue of infringement. Abbott alleged that Novopharm must have better evidence and an explanation for not initially putting forward its best case in the previous litigation, thus Novopharm should file its evidence first.

The Court found that although it had the jurisdiction to reverse the order of evidence, this was not a case where the circumstances to do so were appropriate. Because the Court considers that multiple NOC proceedings may proceed on an infringement issue where there are significant differences in the formulations found in the respective Notices of Allegation, the circumstances of this case are not unique. The generic company will describe the proposed use and it is incumbent on the innovators to show how that use will infringe the patent. To the extent that there are issues regarding whether the new formulation is a significant change or whether the generic company put its best foot forward, these matters are more appropriately dealt with by the trial judge hearing the proceeding.

The full text of the decision can be found at:
By: Beverley Moore

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