A comparison of United States and Canadian laws as they affect generic pharmaceutical market entry

Food and Drug Law Journal

Volumn 55, Issue 3, 2000, Pages 373-388

  Hore, Edward ^a  

^a Hazzard and Hore   (Canada)

Author keywords

[No Author keywords available]

Indexed keywords

CANADA; DRUG MARKETING; FOOD AND DRUG ADMINISTRATION; LAW; LEGAL ASPECT; ORGANIZATION; PRESCRIPTION; REVIEW; UNITED STATES;

CANADA; COMPARATIVE STUDY; DRUGS, GENERIC; ECONOMICS, PHARMACEUTICAL; HEALTH CARE SECTOR; PATENTS; PRESCRIPTION FEES; TIME FACTORS; UNITED STATES;

EID: 0033808684     PISSN: 1064590X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (125)

1. Data as to price differences between Canada and the United States must be viewed with caution. See PATRICIA M. DANZON, PRICE COMPARISONS FOR PHARMACEUTICALS: A REVIEW OF U.S. AND CROSS-NATIONAL STUDIES, The AEI Press, at 30-32 (1999), which found Canadian prices to be three percent higher than U.S. prices based on price per dose, and thirteen percent lower based on price per gram. "A major conclusion of our analysis is that measures of international price differences for pharmaceuticals are very sensitive to the unit for measuring price, sample, and weights used." Id. at 30.
2. Recently, Maine passed a law to equalize drug prices with those in Canada. Senator Slade Gorton (R-WA) has introduced draft legislation in the U. S. Senate that would prohibit pharmaceutical companies from selling prescription drugs at higher prices than in other countries such as Canada. At a White House press briefing on April 26, 2000, President Clinton highlighted a report that is critical of the effect that high drug prices have on seniors. See Amanda McCloskey, Drug Price Increases for Seniors, 1999-2000, Families USA, Publication No. 00-103; see also U.S. Drug Prices Attacked on Two Fronts, SCRIP WORLD PHARMACEUTICAL NEWS, May 3-5th, 2000, at 17; see also Michael Walker, Ask Economists, Not Hillary, Why Canadian Drugs Cost Less, WALL ST. J., May 19, 2000, at A19.
3. Recently, Maine passed a law to equalize drug prices with those in Canada. Senator Slade Gorton (R-WA) has introduced draft legislation in the U. S. Senate that would prohibit pharmaceutical companies from selling prescription drugs at higher prices than in other countries such as Canada. At a White House press briefing on April 26, 2000, President Clinton highlighted a report that is critical of the effect that high drug prices have on seniors. See Amanda McCloskey, Drug Price Increases for Seniors, 1999-2000, Families USA, Publication No. 00-103; see also U.S. Drug Prices Attacked on Two Fronts, SCRIP WORLD PHARMACEUTICAL NEWS, May 3-5th, 2000, at 17; see also Michael Walker, Ask Economists, Not Hillary, Why Canadian Drugs Cost Less, WALL ST. J., May 19, 2000, at A19.
4. Recently, Maine passed a law to equalize drug prices with those in Canada. Senator Slade Gorton (R-WA) has introduced draft legislation in the U. S. Senate that would prohibit pharmaceutical companies from selling prescription drugs at higher prices than in other countries such as Canada. At a White House press briefing on April 26, 2000, President Clinton highlighted a report that is critical of the effect that high drug prices have on seniors. See Amanda McCloskey, Drug Price Increases for Seniors, 1999-2000, Families USA, Publication No. 00-103; see also U.S. Drug Prices Attacked on Two Fronts, SCRIP WORLD PHARMACEUTICAL NEWS, May 3-5th, 2000, at 17; see also Michael Walker, Ask Economists, Not Hillary, Why Canadian Drugs Cost Less, WALL ST. J., May 19, 2000, at A19.
5. The terms "innovator" and "originator" are used interchangeably in this article. Generic manufacturers often prefer the term "brand" or "originator" because sometimes there may be a dispute as to how innovative the innovator actually was. Companies that invest heavily in research prefer laudatory terms such as "innovator" or "pioneer."
6. "Policy Relating to Generic Medicines in the OECD," National Economic Research Associates, Economic Consultants, December 20, 1998, a report prepared for the European Commission, Table 4.2., p. 24. [hereinafter NERA Study] The data is from 1996-1997, however, it appears a much larger proportion of generic drugs in Canada are marketed by "independent" manufacturers.
7. NERA Study, Table 4.1, p. 22. The data is from 1996 and 1997. The study found that the generic prescription drug market share, measured by value, varied widely in various countries. For example, it was 22% in the United Kingdom, 38% in Germany, 0% in Spain, 2% in France, and 8% in Japan.
8. See infra note 78.
9. See infra note 82.
10. See infra note 38.
11. If litigation was commenced prior to March 12, 1998, the automatic stay is 30 months as in the Hatch-Waxman Act.
12. See infra note 78.
13. See infra note 81.
14. See infra note 82.
15. Pub. L. No. 98-417, 98 Stat. 1585 (codified at 15 U.S.C. §§ 68b-68c, 70b (1994); 21 U.S.C. §§ 301 note, 355, 360cc; 28 U.S.C. §§ 2201 (1994); 35 U.S.C. §§ 156, 271, 282 (1994)).
16. The Act is named after the sponsors of the bill, Congressman Henry A. Waxman (D-CA) and Senator Orrin Hatch (R-UT).
17. For the background and rationale of the Hatch-Waxman Act, see Susan K. Keyack, The Drug Price Competition and Patent Term Restoration Act of 1984: Is It a Healthy Long Term Solution?, 21 RUTGERS L.J. 147, 149-55 (1989); Ralph A. Lewis, The Emerging Effects of the Drug Price Competition and Patent Term Restoration of 1984, 8 J. CONTEMP. HEALTH L. & POL'Y 361, 361-65 (1992).
18. For the background and rationale of the Hatch-Waxman Act, see Susan K. Keyack, The Drug Price Competition and Patent Term Restoration Act of 1984: Is It a Healthy Long Term Solution?, 21 RUTGERS L.J. 147, 149-55 (1989); Ralph A. Lewis, The Emerging Effects of the Drug Price Competition and Patent Term Restoration of 1984, 8 J. CONTEMP. HEALTH L. & POL'Y 361, 361-65 (1992).
19. Keyack, supra note 15, at 151.
20. Roche Prod., Inc. v. Bolar Pharm. Co., 733 F.2d 858 (D.C. Cir. 1984), cert. denied, 469 U.S. 856 (1984) (prompting Congress to pass the Hatch-Waxman Act).
21. See generally 54 FOOD & DRUG L.J. 185 (1999), which was devoted in its entirety to discussion of the Hatch-Waxman Act.
22. Title II of the Hatch-Waxman Act amended the U.S. Patent Act to permit the Patent and Trademark Office to grant patent term extensions. See 35 U.S.C. § 156 (1994).
23. See id. §§ 155, 155A and 156.
24. See id. § 154.
25. See id. § 156(c)(3).
26. See id. § 156(a)(5).
27. Section 156(c)(4) provides that "in no event shall more than one patent be extended for the same regulatory review period for any product." Id. § 156(c)(4). The U.S. courts have interpreted "product" to refer to the drug's active ingredient, and therefore further extensions are not available for different dosages or drugs containing salts of the same active ingredient. See Fisons PLC v. Quigg, 8 U.S.P.Q.2d 1491 (D.D.C. 1988), aff'd, 876 F.2d 99 (D.C. Cir. 1989).
28. 35 U.S.C. § 156 (a)(2) (granting exclusivity only for the product in the form that it was approved, even if the original claims of the patent were broader).
29. See id. § 156(b)(2), (3).
30. See id. § 156(g)(6)(C).
31. A survey of the patent extension data done in late 1994 concluded that seventy-four percent of products considered were "pre-1984" products and thus subject to the two-year limitation. The post-1984 products considered in that study had received an average of 2.39 years of patent extension, with the main limiting factor being the limit to fourteen years of total exclusivity. See Suzan Kucukarslan & Jacqueline Cole, Patent Term Extension Under the Drug Price Competition and Patent Term Restoration Act of 1984, 49 FOOD & DRUG L.J. 511, 522 (1994).
32. 35 U.S.C. § 156(c), (g). For help in understanding the calculation of patent term extensions, see DONALD O. BEERS, GENERIC AND INNOVATOR DRUGS, A GUIDE TO FDA APPROVAL REQUIREMENTS, § 4.04[D] (5th ed. 1999).
33. 21 U.S.C. § 505(j)(3) states that the application shall be approved unless one of a list of enumerated problems exists. Regulations governing ANDA content and format are at Abbreviated Applications, Content and Format of an Abbreviated Application, 21 C.F.R. § 314.94.
34. Title II of the Hatch-Waxman Act amended section 271(e)(1) of the Patent Act to create the Bolar exception, so named because it in effect reversed the 1984 Bolar decision. See Roche Prod., Inc. v. Bolar Pharm. Co., 733 F.2d 858 (D.C. Cir. 1984), cert. denied, 469 U.S. 856 (1984). The section in part states that "[i]t shall not be an act of infringement to make, use, or sell a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs." Unlike Canada's Bolar provisions, stockpiling is not referred to in the statute. Commercial-sized batches, however, have been found to be within the Hatch-Waxman Bolar exemption. See Amgen, Inc. v. Hoeschst Marion Roussel, Inc. & Transkaryotic Therapies, Inc., 3 F. Supp. 2d 104, 110 (D. Mass, 1998); see also Edward V. Filardi, Patent Issues That Both Regulatory Affairs Personnel and Patent Attorneys Should Understand, 54 FOOD & DRUG L.J. 215, 219 (1999).
35. The regulations governing the listing of patents in the Orange Book, and the patent certification requirements are at 21 C.F.R. pts. 314.53, 314.94, 314.95. As in Canada, process patents are outside the scheme. "An applicant is not required to make a certification with respect to any patent that claims only a method of manufacturing the listed drug." Id. pt. 314.94 § 12(iv). Formulation or composition patents, however, may be listed. See id. pt. 314.53(b).
36. "Approved Drug Products With Therapeutic Equivalence Evaluations," Patent and Exclusivity Information Addendum. The Orange Book is available online at (last visited July 4, 2000) 〈www.fda.gov/cder/ob/ default.htm〉. One author has observed that "[o]bviously, the more patents that can be listed, the greater the burden for the ANDA applicant to overcome. Patent holders are extremely aggressive in listing . . . ." Filardi, supra note 31, at 221.
37. The Canadian provisions as to the obligation to address patent issues in an abbreviated submission are set out in the Patented Medicines (Notice of Compliance) Regulations, under the Canadian Patent Act. See infra note 57. The U.S. provisions are found in the health and safety regulation statute, the Federal Food, Drug, and Cosmetic Act of 1938 (FDCA), as amended by the Hatch-Waxman Act. See Pub. L. No. 75-717, 52 Stat. 1040 (1938) (codified as amended 21 U.S.C. §§ 301 et seq. (1994)).
38. Id. § 355(j)(2)(A) (FDCA § 505(j)(2)(A)). This provision provides that an abbreviated application shall, in addition to the requirements set forth in subsections (i) through (vi), contain: (vii) a certification . . . with respect to each patent which claims the listed drug . . . or . . . a use for such listed drug . . . (I) that such patent information has not been filed, (II) that such patent has expired, (III) of the date on which such patent will expire, or (IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which this application is submitted . . . ; (viii) if with respect to the listed drug . . . information . . . was filed . . . for a method of use patent which does not claim a use for which the applicant is seeking approval . . . a statement that the method of use patent does not claim such a use. Id.
39. See id. § 355(j)(5)(B)(ii) (FDCA § 505(j)(5)(B)(ii)).
40. See id. § 355(j)(2)(B)(i), (ii) (FDCA § 505(j)(2)(B)(i), (ii)).
41. See id. § 355(j)(5)(B)(iii) (FDCA § 505(j)(5)(B)(iii)).
42. See id. § 355(j)(5)(B)(iv) (FDCA § 505(j)(5)(B)(iv)). There is no equivalent to the 180-day exclusivity in Canada. There has been confusion as to how the rule works where there may be several ANDAs from different manufacturers, and one is the first to win patent litigation, but not the first to file an ANDA. The U.S. courts recently rejected FDA's position that an ANDA applicant must successfully defend a patent suit to quality for the exception. See Mova Pharm. Corp. v. Shalala, 955 F. Supp. 128 (D.D.C. 1997), aff'd, 140 F.3d 1060, 1069-74 (D.C. Cir. 1998) (granting exclusivity in favor of a company that was unable to market, thus benefiting the brand company, seemingly defeating the point of the 180-day exclusivity). The so-called "court trigger" was recently considered in another case. See Mylan Pharm. v. Shalala, 81 F. Supp. 2d 30 (D.D.C. 2000) finding that the 180 days commenced not when the final appeal on the patent issue had been exhausted, as the FDA's regulation had stated, but on the date of the trial-level decision. The generic manufacturer wishing to take advantage of the exclusivity therefore would face the risk that it could sell during the exclusivity period, but later have the trial-level decision on the patent issues overturned on appeal, exposing the generic manufacturer to sizable patent damages. See FDA, 180 Day Exclusivity for Abbreviated New Drug Applications, 64 Fed. Reg. 42,873-887 (1999); see also FDA, Guidance for Industry on Court Decisions, ANDA Approvals, and 180 Day Exclusivity Under the Hatch-Waxman Amendments to the FDCA Availability, 65 Fed. Reg. 16,922-23 (2000).
43. See id. § 355(j)(5)(B)(iv) (FDCA § 505(j)(5)(B)(iv)). There is no equivalent to the 180-day exclusivity in Canada. There has been confusion as to how the rule works where there may be several ANDAs from different manufacturers, and one is the first to win patent litigation, but not the first to file an ANDA. The U.S. courts recently rejected FDA's position that an ANDA applicant must successfully defend a patent suit to quality for the exception. See Mova Pharm. Corp. v. Shalala, 955 F. Supp. 128 (D.D.C. 1997), aff'd, 140 F.3d 1060, 1069-74 (D.C. Cir. 1998) (granting exclusivity in favor of a company that was unable to market, thus benefiting the brand company, seemingly defeating the point of the 180-day exclusivity). The so-called "court trigger" was recently considered in another case. See Mylan Pharm. v. Shalala, 81 F. Supp. 2d 30 (D.D.C. 2000) finding that the 180 days commenced not when the final appeal on the patent issue had been exhausted, as the FDA's regulation had stated, but on the date of the trial-level decision. The generic manufacturer wishing to take advantage of the exclusivity therefore would face the risk that it could sell during the exclusivity period, but later have the trial-level decision on the patent issues overturned on appeal, exposing the generic manufacturer to sizable patent damages. See FDA, 180 Day Exclusivity for Abbreviated New Drug Applications, 64 Fed. Reg. 42,873-887 (1999); see also FDA, Guidance for Industry on Court Decisions, ANDA Approvals, and 180 Day Exclusivity Under the Hatch-Waxman Amendments to the FDCA Availability, 65 Fed. Reg. 16,922-23 (2000).
44. See BEERS, supra note 29, § 4.02[H].
45. 21 U.S.C. § 355(j)(5)(D)(ii), (c)(3)(D)(ii) (FDCA § 505(j)(5)(D)(ii), (c)(3)(D)(ii)).
46. Id. § 355(j)(5)(D)(iii), (c)(3)(D)(iii) (FDCA § 505(j)(5)(D)(iii), (c)(3)(D)(iii).
47. Id. §§ 360aa-360ee (FDCA §§ 525-528).
48. Id.
49. Id. § 360cc(a) (FDCA § 527(a)); see also FDA, Orphan Drug Regulations, 57 Fed. Reg. 62,076 (1992).
50. See 21 U.S.C. § 355a (FDCA § 505A); see also FDA, Guidance for Industry-Qualifying for Pediatric Exclusivity Under Section 505A of the Federal Food, Drug, and Cosmetic Act (Sept. 1999) (last visited July 5,2000) 〈www.fda.gov/cder/guideance/index.htm〉.
51. 21 U.S.C. § 355a (FDCA § 505A).
52. Article 33 of TRIPs requires that the term of a patent shall be twenty years from the date of the application. Marrakech Agreement Establishing the WTO, Annex 1C: Agreement on Trade Related Aspects of Intellectual Property Rights.
53. See Uruguay Round Agreements Act, Pub. L. No. 103-465, 108 Stat. 4809 (1994) (codified at 35 U.S.C. 134 (1994)).
54. 35 U.S.C. § 154(c)(I).
55. Id.
56. Merck & Co. v. Kessler, 903 F. Supp. 964, 966 (E.D. Va. 1995), aff'd in part, rev'd in part, 80 F.3d 1543 (4th Cir. 1996).
57. 35 U.S.C. § 154(c)(2).
58. See BEERS, supra note 29, § 4.04[F][2][a].
59. See Richard M. Cooper, Legislative Patent Extensions, 48 FOOD & DRUG L.J. 59, 63 (1993).
60. R.S.C. [Revised Statutes of Canada] 1985, c. P-4, as amended.
61. SOR [Statutory Orders and Regulations] /93-133 (Canada Gazette Part II, vol. 127, no. 6, March 12, 1993) as amended by SOR/98-166 (Canada Gazette Part II, vol. 132, no. 7, March 12, 1998) and SOR/99-379 (Canada Gazette Part II, vol. 133, no. 21, October 1, 1999) [hereinafter PM(NOC) Regulations].
62. SOR [Statutory Orders and Regulations] /93-133 (Canada Gazette Part II, vol. 127, no. 6, March 12, 1993) as amended by SOR/98-166 (Canada Gazette Part II, vol. 132, no. 7, March 12, 1998) and SOR/99-379 (Canada Gazette Part II, vol. 133, no. 21, October 1, 1999) [hereinafter PM(NOC) Regulations].
63. SOR [Statutory Orders and Regulations] /93-133 (Canada Gazette Part II, vol. 127, no. 6, March 12, 1993) as amended by SOR/98-166 (Canada Gazette Part II, vol. 132, no. 7, March 12, 1998) and SOR/99-379 (Canada Gazette Part II, vol. 133, no. 21, October 1, 1999) [hereinafter PM(NOC) Regulations].
64. C.R.C. [Consolidated Regulations of Canada] 1978, c. 870, as amended. Division 8, sections C.08.001 to 018 (dealing with new drugs) [hereinafter Food and Drug Regulations].
65. R.S.C. 1985, c. F-27, as amended [hereinafter Food and Drug Act].
66. S.C. [Statutes of Canada] 1923, c. 23, s. 17.
67. S.C. 1986, c. 49.
68. See id.
69. The Act was amended in 1987 by An Act to Amend the Patent Act, S.C. 1987, c. 41; Food and Drug Act at c. 33, some provisions of which came into effect on November 19, 1997, others on December 7, 1987, and still others on October 1, 1989. The compulsory licensing regime was set out at section 39 of the old act.
70. The Act was amended in 1987 by An Act to Amend the Patent Act, S.C. 1987, c. 41; Food and Drug Act at c. 33, some provisions of which came into effect on November 19, 1997, others on December 7, 1987, and still others on October 1, 1989. The compulsory licensing regime was set out at section 39 of the old act.
71. Under the 1987 amendments, compulsory licenses could be not be granted for 7, 8, or 10 years after regulatory approval of the innovator drug, depending on certain transition provisions and on whether the generic drug was manufactured in Canada or imported.
72. David J. French, Patent Law Reform in Canada, 4 CAN. INTELL. PROP. REV. 337, 341-42 (1987).
73. Kevin P. Murphy, A Review of Pharmaceutical Patent Practice Under the Amended Patent Laws, 6 CAN. INTELL. PROP. REV. 38 (1989).
74. Food and Drug Act at ss. 79-100.
75. Id.
76. The operation of the PMPRB is outside the scope of this article. For further information, see the PMPRB website at (last visited July 5, 2000) 〈www.pmprb-cepmb.gc.ca〉.
77. Food and Drug Act at ss. 78.1-78.5.
78. Apotex Inc. v. Canada [1994] 1 F.C.[Federal Court] 742, 754; appeal dismissed [1994] 3 S.C.R. [Supreme Court Reporter] 1100.
79. Patent Act Amendment Act, 1992, S.C. 1993, c. 2, s. 11. The 1991 date was chosen because it was the date the so-called "Dunkel text" of the TRIPs Agreement was released. MTN.TNC/W/FA (December 20, 1991).
80. Food and Drug Act at s. 55.2(4).
81. SOR/98-166.
82. SOR/99-379.
83. Food and Drug Act at s. 44.
84. Id. s. 45.
85. Canada-Term of Patent Protection, WT/DS170/R (May 5, 2000).
86. Food and Drug Act at s. 55.2(1). This subsection provides: (1) Exception - it is not an infringement of a patent for any person to make, construct, use or sell the patented invention solely foruses reasonably related to the development and submission of information required under any law of Canada, a province or a country other than Canada that regulates the manufacture, construction, use or sale of any product. Note the inclusion of the words "or a country other than Canada." No equivalent phrase is found in a U.S. statute.
87. Micro Chems. Ltd. v. Smith Kline & French Inter-Am. Corp. [1972] S.C.R. 506, 520.
88. Food and Drug Act at s. 55.2(1). This subsection provides: (2) Idem - It is not an infringement of a patent for any person who makes, constructs, uses, or sells a patented invention in accordance with subsection (1) to make, construct, or use the invention, during the applicable period provided for by the regulations, for the manufacture and storage of articles intended for sale after the date on which the term of the patent expires. The Manufacturing and Storage of Patented Medicines Regulations, SOR/93-134, then provides at section 2: "The applicable period referred to in subsection 55.2(2) of the Patent Act is the six month period immediately preceding the date on which the term of the patent expires."
89. Canada - Patent Protection of Pharmaceutical Products, WT/DS/114 (March 17, 2000).
90. Food and Drug Regulations at s. C.08.002.1. "Canadian reference product" is defined in C.08.001.1 to include not only a product presently marketed in Canada, but also a drug formerly marketed in Canada or a drug "acceptable to the Minister [of Health]" if that drug can be shown to be bioequivalent to the product on the Canadian market, although the Minister, it appears, will not presume an innovator's drug sold in the U.S. market to be bioequivalent to the same innovator's drug in Canada. Id. Canada's regulations make no express provision for an equivalent of "Paper NDAs," but a "new drug submission" under s. C.08.002 must contain detailed tests made to establish the safety and clinical effectiveness of the new drug for the purpose and under the conditions of use recommended, and presumably TPP could in some circumstances deem this requirement satisfied by reports of tests by a party other than the manufacturer, that are reported in medical or pharmacological literature. Id.
91. Merck Frosst v. Canada (M.N.H.W.) (1998) 80 C.P.R. [Canadian Patent Reporter] (3d) 368 at 384 (S.C.C.) [Supreme Court of Canada].
92. Canada's Parliament had a statutory obligation to "review" Canada's pharmaceutical patent laws five years after Bill C-91, which became law in 1993. The review took the form of hearings before the Standing Parliamentary Committee on Industry, culminating in a "round table" discussing the merits of the PM(NOC) Regulations in the spring of 1997, in which the author represented the generic industry. The Committee's recommendations, issued quickly on the eve of a national election, were inconclusive. In 1998, amendments were made to the Regulations, as discussed below. A generic manufacturer moved unsuccesfully to strike out the Regulations as ultra vires the Patent Act. Apotex Inc. v. Canada, F.C.A. No. A-922-96, May 12, 2000.
93. In Merck v. Minister of Nat'l Health (1994) 55 C.P.R. (3d) 302 (F.C.A.) [Federal Court of Appeals] at 304, Hugessen J.A. commented: In large measure, the difficulty is due to the fact that those regulations, whose clear intention is to facilitate the protection of private property rights, have been grafted onto a regulatory scheme whose sole purpose is the protection of public health and safety. The union is not a happy one.
94. PM(NOC) Regulations at s. 4(2)(b).
95. PM(NOC) Regulations at s. 3, 4. The patent register is on the Internet at (last visited July 5, 2000) 〈www.hc-sc.gc.ca/hpb-dgps/therapeut/htmleng/patents.html〉. As in the United States, there has been considerable litigation about what patents may be listed, and what the responsibilities of the TPP are in accepting or refusing patents for listing. See TPP's Guidance for Industry Patented Medicines (Notice of Compliance) Regulations, Therapeutic Products Programme, effective May 10, 2000.
96. PM(NOC) Regulations at s. 5(1)(a).
97. PM(NOC) Regulations at s. 5(1)(b).
98. PM(NOC) Regulations at s. 5(3), (b), (c), (d).
99. PM(NOC) Regulations at s. 6(1).
100. PM(NOC) Regulations at s. 7. If litigation was commenced prior to March 12, 1998, the automatic stay is 30 months as under the Hatch-Waxman Act.
101. PM (NOC) Regulations at s. 7.
102. Bayer A.G. v. Canada (Minister of Nat'l Health & Welfare) (1993) 51 C.P.R. (3d) 329 at 337 (F.C.A).
103. PM(NOC) Regulations at s. 6(2).
104. PM(NOC) Regulations at s. 6(1).
105. Eli Lilly & Co. v. Apotex Inc. (1997) 76 C.P.R. (3d) 1 at 5-6 (F.C.A.).
106. Bayer Inc. v. Minister of Nat'l Health & Welfare, FCA No. A-518-98, April 7, 2000, at 2.
107. Hoffmann-La Roche v. Canada (1996) 70 C.P.R. (3d) 206 (F.C.A.).
108. Merck Frosst v. Minister of Nat'l Health & Welfare (1994) 55 C.P.R. (3d) 302 at 319 (F.C.A.).
109. Pharmacia Inc. v. Canada (M.N.H.W.) (1994) 58 C.P.R. (3d) 209 at 217 (F.C.A.).
110. Merck Frosst v. Minister of Nat'l Health & Welfare (1994) 55 C.P.R. (3d) 302 at 320 (F.C.A.).
111. It is possible for different results to be reached in parallel proceedings on the same drug and same patent. In a recent case, the second person, Apotex Inc., was prohibited from receiving a NOC for naproxen in various proceedings under the PM(NOC) Regulations, but commenced an action for a declaration that the patent in question was invalid, and was successful. Apotex v. Hoffmann-La Roche (1999) 1 C.P.R. (3d) at 22. The prohibition order granted years earlier was then set aside in Hoffmann-La Roche Ltd. v. Apotex Inc., File No. T-1898-93, April 30, 1999, but only after the generic's NOC had been delayed for several years.
112. The courts held that an allegation of non-infringement could be served prior to filing an abbreviated new drug submission, Apotex Inc. v. Canada (1997) 76 C.P.R. (3d) at 1 (F.C.A.), on the grounds that generic manufacturers should be able to get the litigation underway as soon as possible. The 1998 amendments to the PM(NOC) Regulations removed this right through section 5(3)(c)(i). See Merck Frosst v. Canada, F.C.T.D. No. T-418-98, May 3, 2000.
113. Successive allegations may be made, provided a subsequent notice of allegation is not substantially the same as a previous one. See Apotex Inc. v. Canada (1997) 76 C.P.R. 1 at 10 (F.C.A.). See also Apotex Inc. v. Canada (1997) 72 C.P.R. (3d) 412 at 428.
114. Patents claiming manufacturing processes or only intermediates used in manufacturing may not be listed, as they are not "claim[s] for the medicine itself or claim[s] for the use of the medicine itself." Deprenyl v. Apotex Inc. (1995) 60 C.P.R. (3d) 501 (F.C.A.); Eli Lilly & Co. v. Apotex Inc.(1996) 68 C.P.R. (3d) 126 (F.C.A.). Claims for compositions can be listed. Hoffman-La Roche v. Canada (M.N.H.W.) (1995) 62 C.P.R. (3d) 58, aff'd, (1996) 67 C.P.R. (3d) 25 (F.C.A.). Glaxo and Merck sought to prevent the Minister of Health from conducting a "purge" of improperly listed process patents, but were unsuccessful. Merck Frosst v. Minister of Health (1997) 74 C.P.R. (3d) 307. Generic manufacturers sought to compel the Minister to remove improperly listed patents, but were unsuccessful in Apotex Inc. v. Canada, F.C.A. No. A-473, 474, December 16, 1999.
115. See, e.g., Procter & Gamble Pharm. v. Canada F.C.T.D. No. T-1970-99, April 17, 2000; Novartis v. Canada F.C.T.D. No. T-160-99, August 17, 1999, dealing with section 6(7) of the Regulations.
116. The Regulations state that the filing date of a patent submitted for listing must be prior to the innovator health and safety "submission," (s. 4(4)). The courts have held that "submission" includes a supplement to a submission. Apotex Inc. v. Minister of Health (1999) 87 C.P.R. (3d) 271. In one case, the court ordered certain patents for crystalline forms of terazosin purged on the grounds they had been listed improperly. Novopharm Ltd. v. Canada (1998) 78 C.P.R. (3d) 54. The question of what patents can be listed can sometimes have major strategic importance. If a new patent is listed on the register that the generic manufacturer believes to be invalid or not infringed, the generic manufacturer must serve a new allegation, which may trigger further litigation and re-start the stay, even if the generic manufacturer is already in litigation on previously listed patents on the same product. PM(NOC) Regulations, s.5(2).
117. See Regulatory Impact Analysis Statement, Canada Gazette Part 11, vol. 132, No. 7, p. 1055.
118. Regulations Amending the Patented Medicines (Notice of Compliance) Regulations, SOR/98-166, March 12, 1998, s. 6(1)(2)3), amending s. 7(1)(e), and 7(5).
119. Id. s. 8, amending s. 8.
120. Id. s. 5(1) creating s. 6(5)(b). The section can be used only in "very exceptional cases" and "stringent circumstances." See Bayer v. Apotex Inc. (1998) 85 C.P.R. (3d) 334; Pfizer Canada Inc. v. Apotex Inc. (1999) 1 C.P.R. (4th) 358; Apotex Inc. v. Merck Frosst (1999) 87 C.P.R. (3d) 30 (F.C.A.).
121. Regulations Amending the Patented Medicines (Notice of Compliance) Regulations at s. 4(4) amending 5(3)(c)(i). An allegation of invalidity can be served at any time, however.
122. Id. SOR/99-379. In effect, the amendments broadened section 5, which sets out which submissions give rise to an obligation to address patents under the Regulations. As a result of the 1999 amendments, the Regulations may apply to a submission for approval of a "drug that contains a medicine found in another drug that has been marketed in Canada . . . and in respect of which a patent list has been submitted . . . where the drug has the same route of administration and a comparable strength and dosage form [as the other drug]." It seems this could include a non-abbreviated submission relying on its own clinical data, but this has not yet been resolved by the courts.
123. Food and Drug Regulations at s. C.08.004.1.
124. Bayer argued, unsuccessfully, that these provisions and the Minister's practice under them were illegal and contrary to 1711 of the North American Free Trade Agreement (NAFTA). Bayer v. A.G. of Canada and Minister of Health (1999) 87 C.P.R. (3d) 293 (F.C.A).
125. In the April 17, 2000 issue of Fortune magazine, the editors divided the Fortune 500 into 41 industry sectors, one of which was pharmaceutical (consisting of Merck, Johnson & Johnson, Bristol-Myers Squibb, Pfizer, American Home Products, Abbott Laboratories, Warner-Lambert, Eli Lilly, Schering-Plough, Pharmacia & Upjohn, Amgen, and Allergan). Fortune 500: How the Industries Stack Up, FORTUNE, April 17, 2000, at F-27. Fortune ranked each sector by return on revenues, return on assets, and return on shareholders' equity in 1999. The pharmaceutical sector ranked number one in all three, achieving return on revenues of 18.6%, return on assets of 16.5%, and, as noted above, return on shareholders' equity of 35.8%. Id.