Closure of patent 'loophole' outrages generic drug manufacturers

Date: Nov. 8, 1999
Time: 1:41 pm

The Canadian Drug Manufacturers Association (CDMA), which represents the manufacturers of generic drugs, describes the retroactive move by Industry Canada as both sneaky and detrimental to consumers. Toronto-based Apotex, which had 6 applications stalled by last month's change, confirmed that the move has prompted it to withdraw $25 million in philanthropic commitments, including $20 million for the University of Toronto's Cellular and Molecular Biology Research Centre and $5 million to Toronto's Mount Sinai Hospital.

The changes to the Patented Medicines (Notice of Compliance) Regulations took effect last month. They were introduced after generic manufacturer Nu-Pharm Inc. of Richmond Hill, Ont., exploited the loophole to market its own version of Merck Frosst's ACE inhibitor Vasotec, even though Merck believed its patents had not expired and the issue was undergoing judicial review.

The intent of the original regulations, according to an impact statement that accompanied them, was to ensure that the approval process "is not being abused by generic drug applicants seeking to sell their product in Canada during the term of their competitor's patent."

The process used by Nu-Pharm to get a notice of compliance allowing it to market its Nu-Enalapril generic was "perfectly legitimate activity," said CDMA President Jim Keon. In fact, the company's application was not based on Vasotec, but on an already approved generic version, Apotex's Apo-Enalapril, he said.

Last month's amendments, which Keon says change the nature and effect of the regulations, were never debated by Parliament. The government disclosed its intentions in the Canada Gazette during a long weekend in August, shortening the normal 30-day period for consultation to 15 days. "They did it in the sleepy days of summer when nobody's around," Keon said.

Keon told eCMAJ Today that the regulatory change will result in "continued high monopoly drug prices for longer periods."

However, that statement would surprise U.S. president Bill Clinton, who cited low Canadian drug prices when he announced on Oct. 25 that he was launching a "sweeping" study of drug costs in the US. Clinton's proposal to have drug benefits for senior citizens and the disabled included in federal Medicare coverage has been sharply criticized by the US pharmaceutical industry, which launched a multimillion-dollar advertising campaign.

"I wish they'd spend this ad money explaining why seniors have to get on the bus and go to Canada to buy drugs at less than half the price they can buy them in America," Clinton said.

-- David Helwig, London, Ont.

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