CETA Implementation in Canada - Implications of Bill C-30 on the Pharmaceutical Industry

by DLA Piper

DLA Piper

Bill C-30 presents significant changes to Canada’s pharmaceutical landscape by introducing supplementary protection for pharmaceutical products and proposing substantial modifications to the Patented Medicines (Notice of Compliance) Regulations, the current court procedure for pharmaceutical and biologic/biosimilar litigation.

On October 31, 2016, a day after the Comprehensive Economic and Trade Agreement (CETA) with Europe was signed, the Canadian government introduced Bill C-30 titled “An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures” outlining its implementation plans. The amendments proposed by Bill C-30 are destined to change Canada’s current pharmaceutical landscape substantively in two main respects, as summarized below. 

Introduction of Supplementary Protection for Pharmaceutical Products

Currently, the patent and regulatory scheme in place in Canada does not provide pharmaceutical patentees with a mechanism to extend the patent term as a result of delays in obtaining market approval. The Bill would amend the Patent Act to add this concept of patent term restoration for regulatory delays as a “Certificate of Supplementary Protection”. This sui generis form of protection could effectively extend the patentee’s monopoly by up to two years (new subsection 116(3) of the Patent Act) through the issuance of this Certificate by the Minister of Health. During its effective term, the Certificate would grant the patentee the same rights as those granted by the patent set out in the Certificate, but only with respect to making, constructing, using and selling of the drug that is the subject of the patent so long as it is not intended for export.

Substantial Modifications to the Patented Medicines (Notice of Compliance) Regulations

In Canada, regulatory approval of generic drugs and biosimilars are linked to the patent system by way of the Patented Medicines (Notice of Compliance) Regulations. Under the Regulations, generic drug manufacturers and biosimilar sponsors are required to address innovator patents listed on the Patent Register before obtaining market approval for their generic and biosimilar products, respectively. This involves engaging in summary court proceedings under the Regulations. The result of these proceedings is that an innovator’s application for an order prohibiting the generic or biosimilar sponsor from entering the market is either allowed or refused. Currently, an unsuccessful application brought by an innovator typically cannot be appealed as it is considered moot once the generic or biosimilar sponsor receives regulatory approval. Moreover, although issues regarding the validity and infringement of the innovator’s patents are considered in disposing of the innovator’s application under the Regulations, the court does not make any final declarations in this respect. Parties often find themselves engaging in further infringement or impeachment actions parallel or subsequent to the prohibition application, which may and sometimes do result in different outcomes.

Notably, the proposed amendments introduced by the Bill would provide a right of appeal to innovators from unsuccessful applications under the Regulations (new subsection 55.2(4)(j) of the Patent Act) and give authority to the regulatory body to replace the current Regulations “with full actions that will result in final determinations of patent infringement and validity” (summary accompanying Bill C-30). How these amendments will be put in place are not detailed in the proposed amendments but will be the subject of further proposed regulations to be published for comment if the Bill passes.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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