TWN Info Service on Free Trade Agreements

22 November 2006


Data exclusivity: Would have cost Canada extra $600million over last 5 years


The article below estimates that eight years of data exclusivity in Canada would have added approximately $600million in costs in the last five years for prescription medicines alone.

A data exclusivity period of eight years effectively prevents generic versions of medicines being registered by Canada’s drug regulatory authority for eight years, even if there is no patent. This prevents generic medicines being sold in Canada for eight years, leaving Canadians paying monopoly prices for that period.

Data exclusivity is not required by the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). However some countries have been pushed to agree to data exclusivity via free trade agreements (especially with the USA) or via bilateral pressure.

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GENERIC DRUG MAKERS LAUNCH LEGAL CHALLENGE TO NEW FEDERAL DATA EXCLUSIVITY RULES


TORONTO, Nov. 14 /CNW/ - Canada's generic pharmaceutical industry today launched legal action in the Federal Court of Canada challenging recent changes to federal regulations that provide brand-name drug makers with an eight-year ban on generic competition.

"Canada's Parliament approved legislation allowing the government to make regulations necessary to comply with Canada's international trade obligations," said Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA). "But by imposing eight years of data exclusivity, the new rules vastly exceed what is necessary for Canada to comply with the North American Free Trade Agreement (NAFTA) and the Agreement on Trade Related Aspects of International Property Rights (TRIPS)."

On October 18, 2006, the federal government published a package of regulatory amendments to Canada's drug patent rules. As part of these changes, the government provided brand-name drug companies with an eight-year ban on generic competition, regardless of whether there are relevant patents on their products. Had this eight-year ban been in place over the past five years, it would have added approximately $600-million to prescription drug costs in Canada and blocked Health Canada's approval of lower-cost generic equivalents of block-buster medicines such as anti-depressants Zoloft and Wellbutrin and cholesterol reducer Pravachol.

The new rules are the government's response to lobbying from brand-name drug companies and pressure from the United States Trade Representative (USTR) to strengthen data exclusivity provisions. But in an interview with the U.S. publication Inside U.S. Trade published on October 27, 2006, the Office of the U.S. Trade Representative "acknowledged that the changes Canada made go beyond the five years of data exclusivity the U.S. had demanded." "The decision to grant this multi-million dollar gift to Big Pharma is not only unnecessary and costly to taxpayers, provincial governments and consumers, it oversteps Canada's trade obligations and, therefore, the regulatory powers sanctioned by Canadians' elected representatives in the House of Commons," Keon said.

Earlier this month, the Supreme Court of Canada issued a ruling in the AstraZeneca v. Canada (Minister of Health) that exposed the October 18, 2006 regulatory amendments to patent rules as providing no benefit to anyone in Canada other than brand-name drug companies. The Supreme Court ruled that "evergreening" of drug patents, which unfairly lengthens market monopolies, should not have been allowed under the former regulations had the federal government properly enforced them.

"The only change in the recent amendments that the government claimed would provide benefit for those who pay for prescription drugs were the changes to limit evergreening," said Keon. "What we are left with is a package of amendments that, on whole, do nothing but hand over millions of dollars to brand-name drug companies at the expense of our health-care system and Canada's domestic generic drug makers. That is why this legal challenge must be launched."

About the Canadian Generic Pharmaceutical Association

The Canadian Generic Pharmaceutical Association (CGPA) represents Canada's generic drug industry - a dynamic group of companies that specialize in the production of high quality, affordable generic drugs and fine chemicals and in conducting the clinical trials required for government approval of generic drugs. The industry plays an important role in controlling health-care costs in Canada. Generic drugs are dispensed to fill 44 per cent of all prescriptions but account for less than 18 per cent of the $17.5-billion Canadians spend annually on prescription medicines.

For further information: Jeff Connell, Director of Public Affairs, Canadian Generic Pharmaceutical Association, Tel: (416) 223-2333, Cell: (647) 274-3379, Email: jeff@canadiangenerics.ca