(2001; 52 pages)
2.6 North America
Anderson M, Auld C, Bolton C, Gregory A, McBride J. The economic impact of Bill C-91 on the cost of pharmaceuticals in Canada. Kingston, Canada, Queen’s Health Policy Research Unit. Queen’s University, January 1997.
Compulsory licensing for drug patents was introduced in Canada in 1923. However, in 1987, Bill C-22 was passed to provide the patent holding firm with a 7-10 year period of market exclusivity before the entry of generic drug competition. In 1993, after the passage of Bill C-91, the compulsory licensing provision was eliminated and patent protection of brand name drugs has been extended to at least 20 years. This study focuses on the economic impact of Bill C-91 on the cost of pharmaceuticals in Canada. Three different scenarios are modelled using the cases of 7 or 10 years of patent protection from launch date, as provided under Bill C-22, compared to a 5-year extension of current patent protection (total 25 years). The authors conclude that in each model consumers would incur substantial costs because of the extended patent protection on new drugs, estimated at between $3.7 and $9.4 billion.
Congressional Budget Office (CBO). How increased competition from generic drugs has affected prices and returns in the pharmaceutical industry. Available on the web at: http://www.cbo.gov/showdoc.html
In 1984, the United States Drug Price Competition and Patent Term Restoration Act (also known as the Hatch-Waxman Act) created an abbreviated approval process for generic drugs and, at the same time, extended patent terms for innovator drugs. This study examines the price competition among manufacturers in the pharmaceutical market, including the impact of the dramatic growth in the generic drug industry since 1984. Such competition comes in three main forms: between brand-name drugs in the same therapeutic class, between brand-name drugs and their generic counterparts, and between different generic versions of the same drugs. This study also analyses the changes in patent protection for brand-name drugs as well as supply-side factors that have boosted generic market share, in order to assess how that competition has affected the returns from developing a drug.
Government of Canada. Information - Review of the Patent Act Amendment Act, 1992 (Bill C-91). February 1997. Available on the web at: http://strategis.ic.gc.ca/pharmf
This document provides information on the objective and content of Bill C-91, the Patented Medicine Prices Review Board (PMPRB), drug prices/expenditures, the Pharmaceutical Manufacturers Association of Canada commitments, and international obligations and comparisons, as well as a profile of the Canadian pharmaceutical industry.
Hunt MI, Kotis L. Prescription drugs and intellectual property protection: finding the right balance between access and innovation. Washington, D.C., National Institute for Health Care Management Foundation, August 2000. Available on the web at: http://www.nihcm.org/prescription.pdf
The expenditure on US prescription medications has increased significantly over the last decade. This study examines the major pieces of legislation that extend the intellectual property protection period for pharmaceuticals and the implications of these extensions. Intellectual property protection is seen as the tool that stimulates both the breakthrough and incremental innovation. This encourages companies to derive new products from compounds or drugs already patented. In the 1990s, 60% of New Drug Applications approved by FDA were for drugs containing existing active ingredients. The extension of protection incurs costs to consumers with limitation of generic competition and increasing pharmaceutical industry profits. The authors argue that increasing intellectual property protection has forced consumers to incur billions of dollars in drug costs that they may not have paid. The effect of protection on the quality as well as the quantity of innovation should be further examined. The authors finally conclude that policy makers must consider the sort of innovation that is in the public interest to reward.
Kanavos P. Health policy versus industrial policy in the pharmaceutical sector: the case of Canada. Health Policy, 1997, 41: 241-260.
All governments face the dilemma of balancing a dual role of encouraging the pharmaceutical industry while at the same time attempting to contain the costs of pharmaceutical products. This paper analyses the trade-off between health policy and industrial policy objectives in the Canadian policy setting. It provides a brief overview of the Canadian health system and the domestic pharmaceutical industry. It examines pharmaceutical policies at the federal and provincial level, and discusses the impact of federal health and industrial policies on the provincial objectives for pharmaceutical cost control.
Prime Institute. The cost of Bill C-91: An economic impact analysis of the elimination of compulsory licensing of pharmaceuticals in Canada. Prime Institute. College of Pharmacy. University of Minnesota. January 1993.
This study was reported in 1993 before the promulgation of Bill C-91 to show the possible impact if the compulsory licensing of pharmaceuticals were eliminated as the result of this legislation. The author argues that, although the passage of this Bill may have a number of positive effects for some sectors, there would also be major costs in terms of increased pharmaceutical expenditures throughout Canada. The author claims that the magnitude of direct costs due to Bill C-91 over the subsequent 15 to 20 years, $3.6 to $7.3 billion, would far outweigh the direct benefits, $500 million, in increased R&D spending in Canada.
Rhein R. Patent passions run high in Canada. Scrip Magazine, April 1998, 37-39.
Since the previous Government passed the controversial Bill C-91, the Canadian generics industry has been campaigning for the repeal of at least some of its provisions, such as the link between a drug’s notice of compliance and its patent status. However, the current Government’s revisions have not lived up to the industry’s expectations.
Torremans P. Compulsory licensing of pharmaceutical products in Canada. The International Review of Industrial Property and Copyright Law (IIC), 1996, 27(3): 316-331.
Canada had always stood out for its special policy in relation to pharmaceutical patents until important changes took place at international level with the negotiation of NAFTA and the WTO TRIPS Agreement. Compulsory licences were at the centre of all these debates and they have attracted attention in Europe. This article investigates what pattern is to be found in all these developments and what are the advantages and disadvantages of the various regimes. It seeks to demonstrate that the new system, while perfectly acceptable in principle, can be improved on a series of points, and that experience under European law can be of assistance.
Wilcox P.R. Pharmaceutical patent litigation in Canada. Patent World, May 1996, 26-30.
Pharmaceutical patent litigation in Canada is a burgeoning field. Since 1993, when compulsory licences as of right were abolished and the Patented Medicines (Notice of Compliance) Regulations were enacted, the opportunities for pharmaceutical patentees to enforce their rights have dramatically improved. As a result, a number of legal proceedings have been started by pharmaceutical patentees since 1993, including actions for patent infringement and court applications pursuant to NOC regulations.