Marketing Innovative Drugs in Canada

Canada is seeing a surge in small to mid-size pharmaceutical companies marketing directly in Canada.  Canada’s public payer system and broad access to healthcare make it an attractive market, as does its proximity to the U.S. border.

While companies are exploring the “Great White North”, it is important not to be caught out in the cold on some market basics.  Key factors for marketing a new drug in Canada are data protection, patent protection and enforcement, and drug pricing.  Innovators should understand each of these factors well before launch to protect their investment.

Regulatory Approval: Notice of Compliance

The usual gateway to the Canadian market is a Notice of Compliance (NOC): the marketing authorization for new human or animal pharmaceuticals, and for human biologics.  An NOC is issued by Health Canada following an acceptable drug submission; e.g., an innovator’s new drug submission (NDS) or a generic’s abbreviated version (ANDS). 

Data Protection

Once approved, new chemical entities or biologics may benefit from data protection.  Data protection applies where the first NOC for an “innovative drug” is granted on or after June 17, 2006. 

An “innovative drug” is a drug that contains a medicinal ingredient not previously approved in a drug by the Canadian Minister of Health and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph. 

The data protection term comprises: a 6-year data protection period and a further 2-year period of market exclusivity (2½ where certain pediatric studies are timely conducted), from the date of the first NOC.  During the 6-year period, a subsequent entry manufacturer cannot file a drug submission making a direct or indirect comparison to the innovative drug (e.g., an ANDS), and Health Canada cannot grant an NOC for the subsequent entry product until the period of market exclusivity expires.

The data term cannot be extended, and supplementary terms cannot be obtained based upon supplemental drug submissions or drug submissions filed for a new product where the new product comprises a combination of previously approved medicinal ingredients.  It is only where one of the medicinal ingredients in a combination is an innovative drug that data protection would apply.

Data protection may be lost where an innovator stops marketing. 

Data protection is independent of patent protection. 

Data protection should be automatic for an innovative drug.  Nonetheless, innovators should request data protection at the time of filing their NDS. 

Patent Procurement and Enforcement

Patent procurement is generally procedurally less complex in Canada than many other G-7 countries, and typically less expensive.  However, it can take a long time to obtain a patent, unless managed correctly.  This can often be accomplished using expedited procedures.

Canada has no patent term extension or restoration, nor supplementary protection certificates.  The term is a fixed 20-year term from the filing date for patents issuing on applications filed on or after October 1, 1989.

A patentee (or its licensee) can enforce a patent against a non-licensed third party “infringer” in court.  A patent infringement trial can take two years or more from commencement to conclusion.  During that time, it is unlikely that the patentee will be able to obtain a court order preventing the infringer from selling its product.

For pharmaceutical and biologic products, there is another option for patent enforcement under the Patented Medicines (Notice of Compliance) Regulations (“NOC Regulations”).  The NOC Regulations link regulatory approval for a subsequent entry product to an innovator’s patent status in situations where the subsequent entrant is comparing or relying upon the innovator’s submission to enable it to file a reduced data package (e.g., an ANDS). 

Under the NOC Regulations, a subsequent entrant cannot obtain a NOC until it has addressed all patents listed on the Patent Register as of the date the subsequent entry submission is filed.  For each listed patent, the subsequent entrant must either accept that its NOC will not grant until the patent expires, or notify the innovator that the patent is not a bar, because, for example, it does not infringe or the patent is invalid. 

Patent listing is the innovator’s responsibility.  An innovator must submit the appropriate forms together with its related drug submissions, or within 30 days after patent grant.  These deadlines are inextensible; late listing is not possible.  Patents are only eligible for listing if they have a filing date before the related drug submission, and if they claim the approved medicinal ingredient, formulation, dosage form or use. 

If the innovator receives notice from the subsequent entrant, it will have 45 days to commence a court proceeding for review of the merits of the subsequent entrant’s allegations.  Where a court proceeding is commenced, Health Canada cannot grant the subsequent entrant a NOC for a period of up to 24 months.  If the innovator is successful, the subsequent entrant will not be able to obtain a NOC until patent expiry.  If unsuccessful, then a NOC can grant immediately, assuming that safety and efficacy has been established. 

Proceedings under the NOC Regulations do not finally decide issues of infringement or validity, but only whether the allegations of the subsequent entrant are justified.  A patentee that is not successful under the NOC Regulations may therefore go to court to enforce the patent in an infringement action, or an unsuccessful subsequent entrant may go to court to have the patent invalidated.

Drug Pricing

The price a patentee or its licensee can charge for its drug may depend on whether the drug is patent protected. 

The Patented Medicine Prices Review Board (PMPRB) is responsible for reviewing and determining whether a price of a patented medicine is excessive based upon a number of factors, including the price at which the drug or similar drugs have been sold domestically or in foreign markets. 

The PMPRB expects patentees to file a notice of intention to sell a patented medicine in advance of any sales.  However, the patentee or its licensee must make its first reporting to the PMPRB within seven days after (a) the first offer for sale of the medicine in Canada or (b) issuance of the first NOC, whichever is earlier.  There are also subsequent, periodic reporting obligations.

If the patented invention pertains to a medicine, then the jurisdiction of the PMPRB is engaged.  This nexus is very broad, and encompasses non-commercial formulations, dosage forms, uses, processes and intermediates, for example. 

The jurisdiction of the PMPRB is engaged when a patent grants.  However, if there are sales of the drug prior to patent grant and after the patent application becomes public, then the PMPRB will take jurisdiction over these sales. 

If the PMPRB finds that the price of a medicine is excessive, it can order the patentee or its licensee to lower the cost of the drug, pay compensation to the government and/or to lower the price of another drug to offset excessive revenues.

Concluding Remarks

There is an obvious interplay between data protection, patent procurement and enforcement and drug pricing.  Central to each of these issues is when a patent application and drug submission are filed, and when a patent grants and approval is obtained.  Coordination is key, so ask questions early and be ready! 

Daphne Lainson is a partner in the Ottawa office of Smart & Biggar/Fetherstonhaugh. She has been assisting clients with securing patent protection for their innovations for over a decade. Her work specializes in the fields of chemical and biotechnology inventions, including pharmaceuticals, biologics, consumer products, agrochemicals, specialty chemicals, industrial chemical processes, and oil, gas and petrochemicals. Specifically, she is able to advise clients in the pharmaceutical sector on matters involving issues of pharmaceutical regulatory law, including providing strategic advice during patent prosecution and following patent grant for both pharmaceuticals and biologics.  Daphne can be contacted on +1 613 232 2486 or by email at dclainson@smart-biggar.ca