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SPEciAl REPORT: industry stakeholders weigh in on what the canadian-European Union comprehensive Economic and Trade Agreement (cETA) means for canada’s life science industry
Special report
Ceta and opportunities for Canada’s life sCienCe industry
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on October 30, 2016, after seven years of negotiations, Canada and the European Union (EU) officially signed off on the Comprehensive Economic and Trade Agreement (CETA). With the ink barely dry, the Canadian government tabled Bill C-30 (First Reading) the following day. Its intent is to implement CETA into Canadian law sometime this year.
Experts have already weighed in on the CETA, saying on a broad scale it has the potential to open up a huge market for Canadian companies by giving them advantages in exporting their products to Europe. But the question is: what does it mean for Canada’s life sciences industry? After all, it is an industry where most companies are either of the small and medium variety and often are years away from actually having products to export.
Many of Canada’s leading life sciences and biopharma industry organizations have since put forth statements of support for CETA, not for opening up new markets to Canadian companies, but rather because calling it a step forward in leveling the playing field when it comes to comparing our intellectual property regime with those of other countries. Life Sciences Ontario’s Jason Field got the ball rolling with his Op-Ed piece: “CETA opens new pathways for Canadian innovation -- now we need to build on it.” In his piece he outlined that the agreement “continues provisions directly impacting Canada’s life sciences sector and the protection of Canadian innovation,” most notably through first, Patent Term Restoration which offers research-based pharmaceutical companies the potential to recover up to two years of time lost on their patent as a result of lengthy regulatory and government approval; and second with the Right of Appeal that will allow research-based pharmaceutical companies to more effectively appeal court decisions where a patent is ruled invalid, a process that has been available to challengers but not to patent-owners to date. And yet while most would say this is positive news, how substantial these steps are and the changes these amendments bring, is still up for debate.
As such, this month, we’ve put together a special Q&A roundtable report to further discuss the implications of the CETA to Canada’s life science and biotech sectors. Taking part are representatives from three of Canada’s leading industry associations: Andrew Casey of BIOTECanada, Declan Hamill of Innovative Medicines Canada and Dr. Jason Field of Life Sciences Ontario. Rounding out our participants is Bereskin & Parr LLP’s Noel Courage to address the legal implications of the agreement.
JaSoN FIeld
President and CEO, Life Sciences Ontario
Q: My understanding is that CETA increases the intellectual property rights of EU and US pharmaceutical companies. Indirectly, what does Canada’s life science industry stand to gain from the agreement?
Q: Jason, you got the ball rolling on our coverage of CETA with your Op-Ed piece, ”CETA opens new pathways for Canadian innovation -- now we need to build on it.” Can you outline for us some of the positives you see in this trade agreement, and what these new pathways for Canadian innovation are?
First, we have to look at the overarching context of intellectual property in Canada, and as Canadians we need to be realistic about how we’re viewed externally. I think for the most part, Canada and Canadians have a very good international reputation but we shouldn’t take for granted that it applies to all areas. Intellectual property is one of those areas where Canada has lagged behind other nations globally. We’re really not seen as competitive when it comes to protecting innovation. CETA is a small step toward addressing that bigger issue, but it is still a very important step in the right direction; that’s why in my op-ed piece I said we need to build on this. We still have a long way to go in terms of being competitive in our IP policy environment. I don’t think that’s entirely accurate that it just supports EU and US pharmaceutical companies because the changes are to the Canadian IP regime regardless of where a company’s head offices are located. If they hold a Canadian patent and are dealing with Canadian intellectual property rights, then these new rules apply to the Canadian IP. Put simply, it benefits Canadian patent holders. As for the second part of the question, I think any trade agreement opens markets for Canadian firms and life science companies in Ontario and Canada. Also, Canadian companies have been somewhat criticized for not being externally focused enough, and not being as aggressive in terms of tapping into export markets. I think in order to do that, we need to make sure that we have the right environment here at home to enable companies to succeed in our local markets. Ontario needs to be a first adopter of made in Ontario innovations, we need to buy into Canadian innovations here at home to help them launch sales into new markets. While CETA opens doors, I think we still have a lot of work to do domestically to take full advantage of these global opportunities.
Q: You also highlighted in your op-ed piece and in some of your previous answers that the two key points from the agreement are patent term restoration, and reducing multiplicity in litigation. Can you explain how this agreement helps to solve issues in these two key areas?
Q: What input did LSO have on CETA?
We actively collaborated with our counterparts in Québec, Montréal InVivo and the other BiopolisQuébec partners, as part of the Ontario and Québec life sciences corridor. We wrote several joint letters to the Federal ministers of industry, encouraging them to adopt the recommendations around intellectual property as it relates to the pharmaceutical industry as part of the CETA regime. But this was more than just about protection of pharma; we spoke to the overarching intellectual property regime and the protection and value of innovation in Canada. If we want to be competitive as a nation in a global innovation economy, we need to build a strong intellectual property protection regime across the board. And there’s definitely a direct link between strong IP and having a favourable environment to attract foreign direct investment, as well.
Q: How do your members feel about CETA?
We have a very diverse membership, and CETA itself is a comprehensive agreement that touches on many areas of trade. We focused our efforts on the intellectual property piece, so it’s hard for me to say that yes, every member of LSO supports everything about the agreement, but what I can say is that IP is an important element for all of our members and I think in regard to that specific part of CETA, they’re pleased that there was progress made. But again, we feel that it’s a small step forward and there’s still a lot more to be done in terms of bringing the Canadian intellectual property regime into the realm of competiveness.
The easy one is patent term restoration. The pathway to developing a drug product from discovery all the way through to commercialization, including clinical work and regulatory approval, is a long process and a very expensive one. The numbers typically cited are an average of 12 years and a billion dollars, and it’s probably more than that now. And that’s just for small molecules; biologics are even more complicated. These products are also some of the most strictly regulated in any industry because they’re being given to sick people, and of course you want them to be safe and effective, so they are very heavily and carefully regulated – rightly so. Those strict regulatory processes often times cause delays in terms of reaching the market. So, for an innovative company developing a drug product, going through all of these regulatory approvals and investing huge amounts of time and capital, they’re losing time that they would have in terms of their patent protection to recoup their costs by selling the product while it’s still under patent. Patent term restoration is really a minimal acknowledgement that for regulators, which are often government bodies, there is a cost to companies in terms of delaying or using time that their intellectual property is under patent protection. It really is a restoration of that regulatory review time lost. Mind you, in the CETA agreement, Canada has only agreed to up to two years of patent term restoration which again is well below what other nations are providing. In terms of the right of appeal, this is uniquely Canadian because our Notice of Compliance regulations are very different from both the U.S. and the EU, but it is closing a loophole that I think generics firms utilized. It essentially brings a sense of fairness to the NOC process
whereby innovators can appeal decisions that are made, and it was a right previously that was only extended to the generics firms and not the innovators. Again, I think there’s still work to be done on the NOC system; it’s still one of the few environments where generics products can go to market while still under a valid patent. In the EU, they have something called a interlocutory injunction to delay that while patent validity is battled out in the courts.
Q: Could CETA indirectly increase the price of drugs in Canada?
Brace yourself, I’ve got a strong view on this one. Intellectual property policy should never be a tool to manage healthcare costs. If you do that, you will absolutely undermine Canada’s competiveness in the global innovation economy. Just the concept that as a nation we can control drug costs by weakening the patent protection that we afford innovators is absolutely shortsighted. I’m a former chemist and researcher who has worked in the pharma industry, and to be honest, this concept at its basis is offensive because it shows a complete ignorance of the intense knowledge, work, and skills, and the risk and capital requirement to bring an innovative pharmaceutical product to market. So, I think the question itself is problematic: intellectual property protection has nothing at all to do with pricing. What we should be looking at is how do we protect innovators so that we can encourage innovation as we transition into a knowledge economy and become competitive in a global environment. Managing healthcare costs is a separate issue, and there are separate mechanisms with which to address that.
Q: Finally, was there anything missing in the agreement that Life Sciences Ontario would’ve liked to have seen?
Certainly things like how Canada handles patent utility compared to other nations, or how do we deal with orphan drugs or rare diseases in relation to intellectual property protection comparative to other nations such as the U.S. and within the European Union. On patent utility, that’s becoming more and more important – where patents have been invalidated based on judgements of utility in Canada, and they don’t seem to be aligning with internationally or globally agreedupon definitions. Canada has to be very careful there. But again, we’re already seen as uncompetitive when it comes to intellectual property for innovators, and that’s another example where globally we’re getting a bad reputation. Then of course there is the data exclusivity piece, which was missing from CETA as well. In many regards, even the areas that were addressed in the agreement, like Patent Term restoration, that gives innovators an additional two years, and it’s five years in other major markets. So, while CETA made some headway, we’re still lagging behind on many of these areas.
deClaN hamIll
Q: What prompted the CETA agreement?
Q: Tell us a bit about who your members are?
VP, Legal, Regulatory and Policy at Innovative Medicines Canada CETA has been an idea which has been around for decades. Since the 1970s, Canada has been interested in a more integrated trading relationship with the European Union, or originally as it was known as the Common Market. One of policy drivers has always been given Canada has had a tremendous trade dependence on the United States for its exports, so there has been a desire to diversify export markets and to increase ties with other jurisdictions. That to my understanding is the historic driver of this. The origins of the most recent round of negotiations, which are finally seeming to be coming to a conclusion, was in 2009 when there was a joint study done by the European Union and Canada which supported the idea of having an enhanced trading relationship and set out some of the benefits of it. This current round of negotiations started with that study in 2009, but the idea of having some sort of free trade agreement between Canada and Europe has been around for decades.
We have approximately 50 members and they are located across Canada. Some of them are small biopharmaceutical companies, others are very large multinational companies. We have a very diverse membership, but all are on the research-based side of the pharmaceutical spectrum.
Q: Does Innovative Medicines Canada agree that CETA opens up new pathway for innovation in Canada?
We see it as being a step in the right direction, sending a positive signal with some of the legal and regulatory changes, that Canada is upping its game in terms of life sciences innovation. Q: How does Canada’s life science industry benefit from this trade agreement?
There are several benefits arising from the agreement. One is the European Union generally speaking has higher intellectual property standards than Canada, and as part of this agreement with the E.U., Canada is moving to more closely harmonize its IP standards. Why is that good for Canadian innovative life science companies? It’s because their inventions also need to be protected by patents and data protection, so it is a benefit in that sense. There are also other beneficial chapters in the agreement. There’s a chapter that is supposed to promote increased regulatory cooperation, and of course, more
regulatory harmonization with jurisdictions like Europe and the U.S. would also benefit life science innovators in Canada. There’s another chapter that deals with labour mobility, and in many cases companies seek to bring people from one jurisdiction to another because they’re specialists or senior management, and the chapter aims to support or improve the flow of people between Europe and Canada. I think that’s also a benefit to the Canadian life science sector in a sense that we have very talented people and they want to work elsewhere, or alternatively, there are such people who can come here and help our industry, and other sectors as well.
Q: What input did Innovative Medicines Canada provide during the CETA negotiations?
We participated in the Government of Canada’s consultation processes. Throughout the long negotiation of the agreement, that Government of Canada kept the business community and other societal stakeholders as well informed as it could throughout the negotiations. With respect to Europe, the European industry also inputted into the European Commission with its ideas of what should be in the agreement. So I think the industry did provide input, like other stakeholders, both here and in the E.U.
Q: Our understanding is that CETA increases the intellectual property rights of EU and U.S. pharmaceutical companies, but what does it do for Canadian companies and innovators?
We would see it as being good for innovators irrespective of where their corporate headquarters might be. Our view of it would be that because IP is important to protect innovation and because other developed nations have generally speaking higher standards of IP protection than Canada, and that greater harmonization with respect to these developed world standards is desirable for innovation in Canada. We certainly don’t look at it as a win-lose dynamic, rather, we actually saw it as being a benefit for innovation in Canada.
Q: But isn’t the increase to IP rights more about creating a friendly IP environment for foreign companies in Canada, or is there more to it than that?
It’s to encourage companies to do business in Canada, but importantly it’s also to encourage them to bring innovations to Canada. Because innovative companies have only a time limited opportunity to get a return on investment in the Canadian market, which is constrained by the life of the patent and by the duration of data protection, and to the extent that there is an ability to bring more product to Canada, that’s a good thing for our system. Companies have to make decisions on where they launch products, and they have to consider what possible -returns they might get on their investments and therefore having a suitable period to recover R&D expenses that are incurred while making innovative drugs is important.
Q: What does Canada’s life science industry stand to gain from the agreement, particularly in terms of Right of Appeal and Patent Term restoration?
There are two different issues here. The first is what we would call patent term restoration, which helps to restore some of the patent life lost in the development and regulatory approval process. With respect to that particular issue, the up to an additional two years is beneficial for innovators because currently Canada has no such system in place, making it one of the very few OECD countries with no form of patent term restoration whatsoever. The maximum time in other jurisdictions like Europe, the U.S., Japan and Switzerland is five years, so two years is of course a step in the right direction, but it’s still not equivalent to what is available to innovators in some other jurisdictions. So, it’s a good thing and a step in the right direction. It is not a complete harmonization with the standards of other developed nations.
On the issue of the changes to pharma patent litigation, that really is very complicated. What the treaty requires is actually very simple, it says that to the extent that one or the other party to the treaty has a system of a patent linkage, as Canada does, you have to ensure that both parties in the litigation have equivalent rights of appeal. That’s what the treaty says, however the government of Canada has also signaled that it intends to do a much more comprehensive change to the patent linkage system under which most pharma patent litigation is done in Canada, and therefore they’re going to try to create a one track system. Currently there is the possibility that you can sue or be sued under the patent linkage system, but there’s also the infringement action under the Patent Act. What the government has stated is that, in addition including the right or appeal, it also wants to simplify patent litigation in Canada by having the one track system. For this issue, the devil really is in the details. While an effective right of appeal for innovators should be a positive development, the overall impact of these changes and whether they’re positive or negative remains to be seen. We are significantly concerned that more broad changes to the system could have unintended consequences, including the possibility of an increase in patent litigation in Canada because an entirely new system will be in place, and people will test that system, contrary to the stated policy intent to reduce patent litigation.
Q: Has there been any other concerns raised or protest to the agreement?
I don’t think there’s been protest per se, however there is concern about the overall impact of these patent linkage reforms. That patent term restoration component it is a positive thing for innovators, but whether the patent linkage changes are positive remains to be seen. You cannot discern much from Bill C-30 about this because this is a matter that will be largely dealt with the regulations which follow the Bill.
Q: Do you believe that beyond Patent Term Restoration and The Right of Appeal, that CETA is an example of desperately needed progressive public policy that supports innovation here at home?
We would indeed agree with that. It’s symbolically important because there’s been a lot of concern within the industry about intellectual property in Canada. You may have heard of some of the issues with respect to what’s known as patent utility and the promise doctrine. There’s been some attention been placed on Canada by the international industry and candidly not all of it has been positive. So therefore, to the extent that CETA can send a positive signal about life sciences intellectual property in Canada, that would be helpful for innovation in Canada.
Q: Could CETA increase the price of drugs in Canada?
That’s a good question and the answer is no. When critics and commentators look at intellectual property and say IP is driving drug costs, they do so while ignoring examples from around the world. For example, although IP standards are higher in the European Union or Japan, those jurisdictions do not, on average, pay more for innovative drugs, and they don’t pay more for generic drugs. Clearly IP cannot be the cost driver for the pharmaceutical products in those jurisdictions. What’s missing from
analyses focusing exclusively on IP is the access regime in the country. Countries take measures through listing agreements and negotiations with the industry to control prices in accordance with their drug processes, and nothing in CETA will impede that in Canada, either public or private payers. In our view, comparisons or suggestions that the IP changes in CETA are going to drive prices up are really off the mark and they ignore the international experience of other developed nations.
Q: Was there anything missing in the agreement that Innovative Medicines Canada would’ve liked to have seen?
Oh yes, of course. We would have preferred if the harmonization in the form of the introduction of patent term restoration was equivalent to the system that is in place elsewhere. We would have preferred it to be at the maximum five-year level which is in place in the 28 nations of the European Union, the U.S., Japan and other jurisdictions. We would also have preferred to see Canada change its current level of data protection from a base period of eight years to the EU level of 10 years. However, while there are other measures which could have been undertaken in the context of the agreement, the negotiation of the agreement is now closed. I don’t think it’s in anyone’s interest either in Europe or in Canada to reopen substantive negotiations at this stage.
Q: Wasn’t data exclusivity protection another ask by the industry in CETA consultations?
It is correct that during the negotiations, the EU encouraged Canada to move from its current base level of eight years of data protection to the EU based level of 10 years. Our industry supported this position. However, and for reasons that we are not privy to, the final CETA text sets out that each party to the agreement must have a minimum period of eight years of data protection in place. While it is true that CETA did not modify the current data protection period, it is important to note that this period is set out in regulations that could potentially be changed in the future without the treaty. CETA has an important role because it enshrines the current minimum level of eight years of data protection in the treaty, meaning that this level of protection will be stable and well protected for the future.
Q: As the national industry association for Canada’s health, industrial and agricultural biotechnology sectors, what is BIOTECanada’s stance on CETA and does it open new pathways for Canadian innovation? aNdrew CaSey President and CEO, BIOTECanada
The creation of a trade agreement like CETA is certainly about keeping pace with other key jurisdictions with whom we must remain competitive. This agreement is absolutely vital to ensuring Canada remains a destination for investment and partnerships in this space. In terms of input, Innovative Medicines Canada (IMC) took the lead, but we were supportive of the CETA negotiations and certainly what IMC was advocating for, at least from a Canadian position in terms of patent protection and extension, and right of appeal. We would certainly also echo any sentiments that came from Innovative Medicines Canada, but for slightly different reasons. If you look at our membership, BIOTECanada has all the major pharma players, but the vast majority of our members are the smaller pre-commercial companies. And those companies, as they’re taking a wonderful innovation forward, really require the larger companies to be present and active in Canada. Those larger companies represent potential investors, or ultimately potential partners for whatever the innovation is. And it is important for those other larger companies that are doing business here that their products are treated as they would be in other key jurisdictions, that they are provided the same protections they’re afforded in other jurisdictions. And that’s where it becomes really important for our members. It’s an indirect benefit to our smaller members. And when you look at those big companies, and you use JLABS @ Toronto as an example, there were a number of other countries saying, “we need a JLABS here,” whether it be in Brazil or wherever else Johnson & Johnson (J&J) is operating, and you’re sitting at those global tables and making decisions, then you have to say here’s the other reasons why we should bring it to Canada. Of course, other people in the company would ask why would J&J put it in Canada, they don’t treat our IP with the same respect we get in Europe, and so it’s important for companies like that to be able to make the case that Canada is a good place to invest, and to do business. As such, this agreement is just one part of a much broader suite of incentives that would make Canada an attractive place to do business.
Q: What prompted CETA to exist?
CETA in a macro sense is a recognition that Canada is a trading nation and that we will only survive as an economy if we have trading partners. If you look to the markets that we do most of our trading with, the U.S. is the primary one, but you don’t want to be beholden to one market because then you are subject to the ebbs and flows of that marketplace. As such, it is important to diversify and international trade agreements like CETA are good start. It comes down to the fact that Canada is too small of a marketplace on its own to survive, so you have to take a global view with your products and take them to marketplaces all over the world, and international trade agreements are a good way to do that. It helps also that Europe has some significant ties to Canada, both historically and economically.
I think that’s been raised often by the critics of CETA, but I think it’s a red herring. When you look at Canada, there’s a whole bunch of ways that governments are able to manage costs and prices and so I don’t think that patents are the way that you manage prices. — Andrew Casey
Q: What input did BIOTECanada have on CETA as it was drafted?
As mentioned, Innovative Medicines Canada took the lead because they have the expertise and bandwidth to really handle these things. We played a supportive role in what they were doing. Participating in several meetings, we added our voice representing small innovative companies that are in the Canadian biotech ecosystem. For us, this is not just a way of giving something to big pharma outside of Canada, as there are also implications for smaller biotech companies in this country. There’s no doubt that in any trade agreement, there’s give and take. Canada has a very vibrant biotech ecosystem here, and to keep it competitive we have to keep up with other jurisdictions especially in relation to measures that protect intellectual property rights. Recognizing that and the importance of the IP itself, this agreement does stress from Europe’s point of view that Canada needs to keep up with other jurisdictions.
Q: Why is IP protection so important to our industry?
Every jurisdiction wants to have innovation industries in their country because they are either going to create jobs directly, or indirectly by making other sectors more competitive. With biotech specifically, Canada is in a global fight with other jurisdictions to attract innovation as well as the investment that’s going to make that innovation thrive. In those other jurisdictions, they’re already putting in place blueprints and policy measures to attract the major players. The treatment of intellectual property is one such major policy measure, because for this sector, the IP is the asset. If you compare biotech to forestry, mining, oil and gas, those other industries also have to attract investment, but unlike biotech, if they’re not attracting investment they can’t just pick up and move to the U.S. or South America where investors are willing to invest. In our sector, if you’re not attracting investment here, you can take your idea or IP and move it to where the investment is and continue to commercialize from that place. This is what we’re facing, this threat of losing our innovation to other jurisdictions. For Canada essentially to keep pace, IP treatment must become a priority. In terms of the benefits of patent term extension, I think the biggest thing is the message it sends that Canada wants to remain competitive with other markets. If you have an extension on data protection or right of appeal, I think it sends a signal that the government in Canada is willing to take it more seriously. Another emerging challenge is how Canadian courts are treating patent utility and usefulness. That’s an area that needs to be addressed in Canada as well, and while obviously CETA doesn’t tackle that issue, it is still an important step to making sure that the rest of the world knows that Canada is trying to stay competitive. As far as the courts go, I think Parliament would have to intervene there, obviously you can’t lobby the courts for different decisions so it really requires the government to step in and do something to reestablish the rules of patents in Canada and that would require some sort of political movement to actually change anything on that front in a more significant way.
Q: Multinational brand name pharma companies operating in Canada often say patients come first. On this front could CETA increase the price of drugs in Canada?
I think that’s been raised often by the critics of CETA, but I think it’s a red herring. When you look at Canada, governments have a number of tools to manage costs and prices. Restricting patent life is not the way to manage prices.
Q: Was there anything missing in the agreement that BIOTECanada would’ve liked to have seen? And what more work needs to be done to strengthen IP protection in Canada?
Data exclusivity was one of the three asks from the industry, along with Right of Appeal and Patent Term restoration, but unfortunately it was dropped from CETA. That to me was the one area we would have liked to have seen provisions put in place. That’s really important from the biologics standpoint, because they (biologics) are so much more complex to develop than small molecule drugs, and most of our companies are in the biologics space, and rare diseases, where the data sets are a bit smaller. It can take a lot more time to get to the marketplace with both these types of products. The fact is when it comes to protection of data exclusivity, we aren’t competitive. As an example, Canada is at eight years exclusivity, while other major jurisdictions like Europe and the U.S. are at 10 and 12 years respectively. It would have been nice to see that disadvantage addressed in the CETA agreement.
Q: Are there any other comments you want to make on the agreement?
The CETA is an important trade deal for Canada. Canada needs to remain as competitive as possible with other jurisdictions, otherwise we’ll lose these investments and innovations. We’ll eventually get the innovation back, but we’ll have lost out on all the benefits that come with commercializing it here, so any way we can remain competitive, and IP protection is certainly one of the ways particularly in the biologics space because it does require such specific kinds of investors, it is more complex, the regulatory process can take longer because the data sets are smaller for some of them and can take longer to get through the approval process, all of that recognizes the importance. If we’ve got patent protection and intellectual property policies in place that really reward investment and recognize its importance, I think that sends a strong signal outside the country where we’re going to have to find those investors and partners.
Noel Courage
Q: Who are the big winners in this agreement? Partner with Bereskin & Parr LLP and Unanimous decision - big pharma member of the Life Sciences practice wins with the extra patent term. group Keep in mind that there is no gift of patent term - there will only be a patent term extension to compensate for regulatory delays in Health Canada reviewing and approving a drug. This extension represents time that the brand name could have otherwise been on the market, selling under its patent. Health Canada should take the time it needs to do proper reviews of safety and efficacy, but this prevents it from being lightning fast in its approvals. Both brand names and generics should benefit from the provisions of the Bill designed to reduce the multiplicity of litigation around pharma patents.
Q: Who doesn’t fare as well as a result of this agreement?
Q: Where are we in the process of CETA becoming official?
It is happening. The federal government introduced a bill in the House of Parliament in October to implement the IP provisions of CETA as well as other portions of the treaty.
Q: Why do you think this agreement took so long to be ironed out?
There is a lot of bureaucracy, many country approvals and the occasional recalcitrant region (Wallonia, Belgium) required for final approval of the treaty. I don’t think three years from first announcement to final signatures and a draft Bill in the House is too far off of realistic expectations.
Q: Can you outline for us some of the positives you see in this agreement from a legal perspective for the Canadian life science, pharma and biotech industries?
Pharma and biotech are finally happy to get a patent term extension in Canada through the Supplementary Protection Certificate system. The extension could be up to two years, only if there are regulatory delays by Health Canada in approving the drug. This is significant because most of the money is made on the back end of the patent term.
Generic companies may have to wait longer for patents to expire before they can get on the market in Canada with a copycat product. However, they have not spent the big money, or taken the risk, on R&D that the brand name companies have. Since generics are riding the coat tails of the brand name company, it’s fair if their windfall is pushed back a bit. The patent term extension won’t prevent generics from manufacturing and exporting drugs for international markets, so this is a big concession since that activity would typically be a patent infringement.
Q: Multinational pharma companies with operations in Canada often say patients come first. On this front could CETA increase the price of drugs in Canada?
CETA should not increase the prices of brand name drugs. We have government price regulations on the price of patented drugs. However, the brand name drug will be the only option on the market for a longer period of time if there is a patent term extension in effect. There is no lower-priced generic product available during that time.
Q: Was there anything missing in the agreement that stakeholders in Canada’s life science industry would have liked to have included? Ie. As an example, we’ve been told that data exclusivity protection was a third ask by the industry in CETA consultations, but this wasn’t included in the final draft.
You are correct that many brand name companies would have liked to have a longer data exclusivity period. Canada currently provides a basic eight year data exclusivity term. In this period, generics cannot rely on a brand name company’s data as a shortcut to get their generic approval. The basic corresponding term in Europe is 10 years. However, it wasn’t even a decade ago when Canada raised its data exclusivity from five years to eight and strengthened the protection. I think it was overly optimistic to think Canadian data exclusivity would increase shortly afterward to a 10-year term.
To see this story online visit www.biotechnologyfocus.ca/ ceta-and-opportunities-for-canadaslife-science-industry/
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