EU wants patent changes

Canada's pharmaceutical industry and the European Union have been quietly lobbying for changes that could give brand-name drugs several years more patent protection here -- and potentially add hundreds of millions of dollars to Canadian medication costs annually.

The EU has reportedly proposed the measures be included in a landmark free-trade agreement now being negotiated between the jurisdictions, with the fifth round starting last week in Ottawa.

The changes would delay the entry of cheaper, generic copies of medication onto the market, but brand-name companies and some provinces say the measures are needed to restore fairness to the complex patent system, and generate more drug research in Canada.

The generic industry, however, is voicing outrage at the proposals, insisting they will do nothing positive for Canada.

"This would be a nasty piece of policy if it went through," said Jim Keon, head of the Canadian Generic Pharmaceutical Association.

"They see this trade negotiation as something they can glue their policy on to ... (But) it's completely at odds with what governments want."

Regardless of the merits of such changes, the impact of postponing the arrival of generics -- which sell for as little as a quarter of the brand price -- is clear.

Lipitor, a blockbuster cholesterol drug, for instance, had close to $1 billion in sales before it came off patent recently, meaning potential savings of hundreds of millions of dollars for provincial drug programs, workplace health plans and uninsured Canadians on that medicine alone.

The brand-drug sector, however, argues that this country needs to bolster its medication-patent system and make it more equitable if it wants to attract research and development money.

"We have to move away from a policy that discourages innovation and encourages copying," said Russell Willilams, CEO of Canada's Research-based Pharmaceutical Companies, the chief industry trade group.

"That is not an environment that is going to encourage global industry to invest research dollars in Canada."

At least three provinces have written letters in support of the industry stance, including Alberta, where a senior aide in the premier's office used to work for a major pharmaceutical company.

While many Canadians are barely aware of the trade talks, Peter Van Loan, the International Trade Minister, has predicted that the eventual deal would bring billions of dollars in benefits to Canada's economy.

He refused in an emailed statement to comment on the drug-patent issue, saying he does not

want to negotiate in the media, but noted that the government "is committed to opening markets for Canadian workers and businesses."

The negotiations are unprecedented, the world's first free-trade talks that have gone far beyond the usual trade issues to address a variety of ways to mesh the EU and Canada's economies, said Debra Steger, a University of Toronto law professor.

The two sides do not typically reveal their bargaining positions, but observers say the Europeans are pushing to have at least three drug-patent provisions included in the deal.

The changes would add to a tangled system that starts with a 20-year patent on newly invented medicinal molecules.

One change would extend the patent period to compensate for delays in the approval process for a new drug.

Another would lengthen the so-called data-protection period by about two years, delaying generic copying of certain drugs without active patents.

The issue being pursued most vociferously by the industry, though, relates to a process under which brand companies can challenge a generic firm as it applies to copy a drug still under patent.

The brand gets an automatic stay of up to two years on the generic version entering the market while a court rules on the issue. But if the brand company loses, it cannot appeal the decision, unlike the generic competitor.

The brand-name industry is pushing for that right of appeal.

Alberta decided to write a letter of support in July after the brand sector raised the issue with Premier Ed Stelmach, said George Samoil, director of operations in the Premier's office.

He said the fact he had himself

earlier been manager of government relations for AstraZeneca had nothing to do with the province's stance.

Quebec and New Brunswick also sent letters of support to Tony Clement, the federal Industry Minister.

"It seems pretty straightforward that if Canada wants to be in line with one of its major trading partners, that its intellectual property protection policies be in line also," Mr. Samoil said.

The generic manufacturers, though, argue the brand companies do not need that right of appeal because they have a whole other avenue of legal attack once the generic product makes it onto the market.

The National Union of Public and General Employees has also keyed in on the issue. Larry Brown, the union's secretary-treasurer, called the brand-name industry's demands a case of "excessive and crass self-interest" that would drive up drug costs by as much as 30% a year.

Granting the EU request for the changes might well make sense as part of the trade deal as a whole, which inevitably will involve give and take by both sides, said Richard Gold, a law professor with McGill University and a leading intellectual property expert.

The measures on their own, though, would not benefit Canada much, he said.

Despite the industry's assertions, there is little evidence that bolstering patent protection here leads to more R&D investment, argued Prof. Gold.

"Is this going to be a substantial benefit to Canadian companies, the Canadian economy, access to medicine? ... No."

Prof. Steger said Canadians should judge whatever trade deal is reached with the EU as a whole, not based on specific concessions that are made or gained, saying the accord could be "extremely positive."