Issue 06/64 | November 23, 2006
New directions, and a challenge, for Canada's generic drug approval regime

Canada's drug regulatory regime underwent a major overhaul last month and already a court challenge has been launched by Canada's generic drug industry against one of the new rules.

One of the significant changes restricts the ability of drug manufacturers to repeatedly extend the mandatory stays of generic drug approvals by strategically adding new patents to the Patent Register. The Patented Medicines (Notice of Compliance) Regulations establish a link between patent protection on new drugs and generic drug introduction, in a system similar to the American Hatch-Waxman law.

A drug manufacturer may list patents relevant to its product on the Patent Register. A generic manufacturer may compare its product to a previously approved drug, but must then address the patents on the Register for that drug, and either wait for the patents to expire or challenge them in a proceeding which if contested results in a Federal Court action. A court challenge automatically triggers a 24 month stay of the generic drug introduction.

Prior to the recent amendments, drug manufacturers could trigger successive 24 months stays by adding new patents to the Register. Now, this is limited by a form of "freeze" on the Register: a generic company is not required to address patents added to the Register after it files its abbreviated new drug submission.

The new regulations also add a new class of patents that can be listed by drug manufacturers, covering "dosage forms" of an approved drug. However, drug manufacturers are also limited in the patents they can list; these must now be relevant to the approved drug formulation or use rather than merely relevant to the active ingredient of the drug.

Another major change (which has already triggered a lawsuit) is a new data protection rule governing the timing of generic drug approval. Previously, the Food and Drug regulations imposed a five year period of data exclusivity following the approval of a new drug, during which a generic drug could not be approved. However, the rule was burdened with ambiguous wording and judicial interpretation which rendered it only rarely applicable. The recent changes introduced a "6 + 2" regime, under which a generic producer is not permitted to submit an application for a generic version of a drug for six years from the approval of a new drug, and may not be approved for eight years from the originator's approval date. Pediatric drugs receive an additional six months exclusivity.

Data protection can protect drugs that are not protected by patent, for example if the testing and approval process exceeds the patent lifespan. Health Canada has estimated that the new rules could effectively extend market exclusivity for about a quarter of all brand name drugs.

The Canadian Generic Pharmaceutical Association (CGPA) has launched a court challenge to the new data exclusivity rules, on the basis that they exceeded the requirements of NAFTA and Canada's obligations under the WTO-based Agreement on Trade Related Aspects of International Property Rights (TRIPS), and were thus outside the rule-making powers of the government. At this point, the Government has not responded to the lawsuit. If the CGPA succeeds in its lawsuit, it would have a significant impact on Canada's generic industry. Until the recent rule change, Canada was one of the few industrial countries with no effective data protection rules.

To discuss this topic further, please feel free to contact the author, Adrian Zahl (azahl@ridoutmaybee.com), at Ridout & Maybee LLP, in Ottawa, Ontario, Canada.

The information contained in this email is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.

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