SOURCE: Canadian Health Policy Institute


August 16, 2016 06:00 ET

Market Exclusivity for New Patented Drugs in Canada's Public Drug Plans Is as Short as 3.4 Years: Canadian Health Policy Institute

TORONTO, ON--(Marketwired - August 16, 2016) - A new study shows that several governmental factors are delaying the availability of new medicines in Canada's public drug plans. This has negative implications for access to innovative pharmaceuticals for the estimated 11.9 million Canadian patients who are eligible for publicly funded drug benefits. In addition, these delays and other quasi-governmental factors are shortening the effective period of market exclusivity for new drugs, which is significantly eroding the practical economic value of pharmaceutical patents in Canada. This potentially exposes Canada to trade disputes with its major trading partners.

The study examined the actual period of market exclusivity for the new patented drugs approved by Health Canada that were covered under each of the federal and provincial public drug plans in Canada during the years 2004 to 2015. It measured the combined effect of delays caused by the regulatory and reimbursement processes at Health Canada, the Canadian Agency for Drugs and Technologies in Health (CADTH), the pan-Canadian Oncology Drug Review (pCODR); the Pan-Canadian Pharmaceutical Alliance (PCPA) and the federal and provincial public drug plans.

The analysis also included the impact of court decisions based on internationally aberrant intellectual property concepts like "patent utility". Recently, several pharmaceutical patents have been invalidated for what the courts have deemed to be a "lack of utility", even though the products had been previously certified by Health Canada as safe and effective for the treatment of specifically approved health conditions. This has resulted in the early approval of generic versions of these drugs and the unexpected erosion of the effective patent life for the affected products.

New drugs are patented at the time that they are discovered. Patent terms in Canada are currently 20 years. However, time spent in clinical trials (testing safety and effectiveness) consumes much of the patent term for new drugs. Delays in government regulatory and reimbursement processes, as well as court decisions that invalidate patents further shorten the actual period of market exclusivity for new patented drugs, leaving far less than 20 years of actual market exclusivity when the drug is finally available to be sold for use by patients.

The study found that the actual period of market exclusivity for new drugs in the publicly insured markets in Canada is very short and varied significantly by jurisdiction. For drugs that experienced a generic entrant during the period of study the actual effective life of a patent ranged from 3.4 to 6.5 years, and averaged 6.0 years. For the drugs that had not yet experienced generic entry during the period of study, the expected effective life of a patent ranged from 7.4 to 11.6 years.

The study identified four remedial policy options including:

  • Harmonizing Health Canada's regulatory process for approving new drugs through mutual recognition of the decisions of its international counterparts at the European Medicines Agency and the US FDA.
  • Making new drugs immediately available for public insurance coverage following marketing approval, while HTA and pricing processes are subsequently conducted with final recommendations/negotiations retroactively applied.
  • Increasing the Patent Term Restoration (PTR) length in Canada to align with the EU and the USA.
  • Amending the Patent Act in Canada to overturn the "utility" doctrine and restore alignment with the EU and the USA.

The study was authored by Dr. Brett J Skinner (Ph.D.) and was published at Canadian Health Policy the online journal of Canadian Health Policy Institute (CHPI).

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Canadian Health Policy Institute (CHPI) is an independent think-tank dedicated to providing information and ideas for a better health system.

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