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Evergreening Drug Patents
Consumers, Taxpayers to Pay More for Drugs Under Proposed Changes to Patent Rules
Federal government poised to ignore Supreme Court of Canada and reopen
loopholes that allow for "evergreening" of drug patents
TORONTO - Proposed amendments to Canada's drug patent rules will force consumers and taxpayers to pay monopoly drug prices on top-selling prescription drugs for longer than they should by reopening loopholes that allow brand-name drug companies to unfairly keep competition from lower-cost generic prescription medicines off the market.
The Government of Canada published draft regulatory amendments to the
Patented Medicines (Notice of Compliance) Regulations of Canada's Patent Act
on Saturday, April 26, 2008. The changes would allow brand-name drug companies
to list patents that are irrelevant to their products and get an automatic
injunction preventing Health Canada's approval of lower-cost generic versions,
even though the relevant patents have expired.
The proposed amendments would override a November 3, 2006 ruling by the
Supreme Court of Canada. In the decision, the Supreme Court ruled that
brand-name drug companies were being incorrectly allowed to abuse the patent
system to the detriment of consumers and generic pharmaceutical manufacturers,
a practice known as "evergreening." The proposed amendments would allow that
abuse to resume.
"Changes to stop evergreening came after years of study and calls for
change from the Supreme Court of Canada, Romanow Commission, Canada's
Competition Bureau, Canada's First Ministers, seniors organizations,
health-care groups, unions, and employers that sponsor drug benefit plans for
their employees," said Jim Keon, President of the Canadian Generic
Pharmaceutical Association (CGPA). "Now, the government is proposing to
override a Supreme Court Decision without prior consultation with the generic
pharmaceutical industry or anyone in Canada who will have to pay higher
prescription drug prices if these amendments are adopted."
The proposed amendments could lengthen market monopolies for some
prescription drugs, for example, Lipitor and Norvasc, the two top-selling
prescription drugs in Canada.
The Government of Canada is allowing a mere 15 days for written
submissions on the proposed amendments and admits in its regulatory impact
assessment statement (RIAS), that the proposals will lead to higher drug costs
for consumers and provincial governments by delaying the introduction of
lower-cost generic drugs, stating:
"The Government recognizes that one possible consequence of the proposed
amendments is that some generic drug companies may not be able to enter the
market with a generic version of a patented drug on the same date as had been
expected if the Federal Court of Appeal's decision were left to stand. While
this could result in delayed savings to consumers and provincial drug plans,
the Government considers these potential costs to be counter-balanced by the
above-mentioned benefits..."
"The brand-name pharmaceutical industry is the spoiled child of Canada's
intellectual property regime," Keon said. "Despite 20 years of government
concessions, Big Pharma's investments in research and development continue to
fall below the levels they committed to when their government-granted
monopolies were first increased in 1987. Now the Government of Canada is
prepared to ignore the Supreme Court in order to let them continue their abuse
of the patent system."
With the adoption of the 1987 amendments to the Patent Act that
lengthened their monopolies, brand-name drug companies made a public
commitment to increase their annual research and development (R&D) expenditure
to 10 per cent of Canadian sales. However, the 2006 Annual Report of the
Patented Medicine Prices Review Board (PMPRB) shows that for the sixth
consecutive year, Big Pharma's R&D-to-sales ratio has fallen below that level.
Brand-name drug companies spent only 8.1 per cent of their revenues on
research and development in 2006, and less than 2 per cent on basic research
into new drugs.
Keon also pointed out that the provinces of Quebec and Ontario have
experienced crippling job losses in the manufacturing sectors in recent
months. Unlike most brand-name drugs that are shipped into Canada, most
generic drugs sold in Canada are made domestically, primarily in Ontario and
Quebec. "The Government of Canada is further threatening manufacturing jobs in
the country's industrial heartland by pandering to brand-name drug companies."
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