The Canadian government has recently proposed amendments to the
Food and Drug Regulations and the Patented Medicines (Notice of
Compliance) (PM(NOC)) Regulations that benefit and also hinder both
generic and innovative drug manufacturers. The proposed regulations
would increase the data exclusivity period for new drugs, but
decrease the patent list eligibility in many instances under the
PM(NOC) Regulations. Also recently published are draft regulations
under the "Pledge to Africa" Act, to allow generics to produce
patented drugs for export to developing nations. The new rules are
new regulations and not legislation. Thus, approval by Parliament
is not required for their passage. The government had set a period
of public consultation that has now expired, and the proposed rules
may now be amended or passed in their current form.
Data exclusivity
The proposed regulatory changes would greatly strengthen data
exclusivity, an important form of protection available to
innovative drug companies against generic competition. Until now,
Canada's data exclusivity protection regime has been relatively
toothless.
Pharmaceutical innovators place a high importance on obtaining
data exclusivity for new drugs. This form of protection prevents
others from using scientific data generated by a drug company to
establish the safety and efficacy of a new drug. It is distinct
from patent protection relating to the drug. In the absence of data
exclusivity, a generic competitor can avoid the costly and
time-consuming generation of its own safety and efficacy data and
instead refer to the prior approval of the original drug. The
generic company must also establish that its product is the
equivalent of the original drug. In many countries, data
exclusivity rules give the drug originator a head start against
generic competition by prohibiting the generic company from relying
on the originator's data for a fixed period of time, usually five
to 11 years. This exclusivity period can be of critical commercial
importance if it outlasts patent protection for the drug.
The Food and Drugs Act (FDA) provides a limited form of data
exclusivity in a regulation which states that if in the course of
approving a generic drug the Minister of Health both examines and
relies on data submitted by a drug originator, the Minister shall
not issue a Notice of Compliance (NOC) to the generic drug for five
years after the NOC of the original drug. In Bayer Inc v Canada
(Attorney General) (1999) the Federal Court effectively
rendered this provision toothless by ruling that it does not apply
in most cases since the usual approval process of a generic drug
does not entail actual examination and direct reliance on the
originator's data. The existing regulation does not apply to
"indirect" reliance on the originator's data.
The absence of effective data exclusivity places Canada at odds
with the major industrial countries of Europe, United States, Japan
and others that provide effective data exclusivity for between five
and 11 years, unless the generic manufacturer develops its own
original data. This is highly unlikely, given the costs and time
required.
The proposed regulatory changes would bring Canada's laws into
general alignment with those of other developed countries. The
proposed changes would accomplish two results. First, they would
eliminate the requirement that data exclusivity applies only if the
Minister both examines and relies on the originator's data. Thus,
the basis for the Court's rejection of data exclusivity in
Bayer effectively disappears. Second, the length of data
exclusivity would be extended from five years to eight years, with
an additional six months if studies are submitted that show
paediatric applications for the drug. Time begins to run from the
date the new drug is approved in Canada.