Asked & Answered

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Compiled by Amber Lepage-Monette

Over the past decade there has been a dramatic increase in expenditures to obtain and enforce patents for pharmaceutical applications. Cases exist where local and foreign governments have disregarded patent laws to allow for the delivery of pharmaceutical/medical services at an affordable price. How are companies coping with these issues? In light of these trends, what changes to patent law need to be made to promote private research and development while protecting consumer interests in the short and long term?

This month’s Asked & Answered question was provided by
students of the University of Toronto at Mississauga’s Master of Biotechnology Program, Class of 2006.

While there has been an increase in the cost to obtain and enforce patents for pharmaceutical inventions, patent costs represent only a fraction of the costs needed to develop and obtain regulatory approval for any new pharmaceutical product. Recent estimates suggest that it costs an average of $800 million to bring one product to market. It is also estimated that only one in 10,000 potential therapeutics actually make it from discovery through to product development. As a result, pharmaceutical companies require a period of market exclusivity to try to recoup the cost required to bring the product to market. Therefore, strong intellectual property (IP) protection is critical for pharmaceutical companies in order to allow them to develop new medicines. At the same time, patented medicines need to be available at affordable prices.

Canada has been a world leader in trying to reconcile the interests of the pharmaceutical industry with those of the public. However, in some instances, it can be argued that Canada has been biased toward the interests of the public without due consideration to the IP rights or needs of the pharmaceutical industry. As an example of such bias, Canada has pricing control of patented medicines, which results in some pharmaceutical companies deciding not to patent their products in Canada. Also, Canada is the only G7 country that does not have patent-term extension or restoration.

Patent-term restoration allows companies to seek an extension on a patent term for up to five years in order to recapture some of the time lost on the patent term during the regulatory approval process. Pharmaceutical products often only have eight to 10 years of term left on their patent term by the time they reach the market. Therefore, Canada should consider implementing patent-term restoration to further promote research and development. Consumer interests will continue to be protected by this change due to the pricing control that exists over patented medicines.

A final example of the bias toward public interest was the 2001 Cipro® controversy wherein the government ordered one million doses of ciprofloxacin from generic manufacturer Apotex Inc. (Toronto, ON) in response to the perceived threat of anthrax infection. The government did not approach the Cipro patent owner, Bayer AG (Leverkusen, Germany), to fill the order, demonstrating a complete disregard of Bayer’s patent rights.

Despite the above examples that have caused concern to the pharmaceutical industry, Canada has recently made a change to the Patent Act that appears to be accepted by both the research-based pharmaceutical companies and the public. The recent passing of Bill C-9 will allow generic pharmaceutical companies to obtain licences to make and export patented medicines to developing countries. (Bill C-9 received Royal Assent on May 14, 2004, although the Bill is not yet in force as it is pending approval of the companion regulations.) Bill C-9 resulted from the Doha, Qatar November 2001 Ministerial Declaration in which World Trade Organization (Geneva, Switzerland) members recognized the gravity of the public health problems afflicting developing countries. The Doha declaration recognized that access to medicine should have primacy over commercial interests.

Canada is the first country to implement changes to its Patent Act to implement the Doha declaration. Provisions are being drafted to try to ensure that the commercial and IP rights of the patent holder are respected. One provision will be to ensure that products exported cannot be re-imported into Canada or imported into other countries and sold in competition with the patent holder’s product. In a press release dated February 26, 2004, a spokesman for Canada’s Research-Based Pharmaceutical Companies (Ottawa, ON) stated:

In order to continue to provide medicines to Canadians and to people in developing countries, new medicines need to exist. New medicines cannot be developed without a strong IP system that properly rewards the innovators of the medicines. Canada must continue to be sensitive to rewarding innovative pharmaceutical research while at the same time ensuring that the public is able to benefit from the new medicines.

Micheline Gravelle is a partner with Bereskin & Parr (Toronto, ON) and heads its Biotechnology and Pharmaceutical Practice Group. Gravelle is a patent agent registered to act before both the Canadian and United States patent offices. Her practice includes assessing new technologies, preparing and prosecuting patent applications worldwide and conducting due diligence analyses of patent portfolios.