It’s been a tough year (and then some), but the health sciences sector has been thriving during the pandemic. Obtaining and defending patents has been a critical part of that success.
Daphne Lainson, chairwoman of Smart & Biggar LLP, says both biopharma — which are drugs created from biological sources — and classic small-molecule pharmaceuticals are strong globally and from her firm’s observation.
Innovators — pharmaceutical companies that discover and develop new medicines — have been very active across the board, says Lainson, with breakthrough oncology treatments. “The biopharma industry as a whole is very strong and has been innovating throughout — even though things are not in their usual pattern.”
This activity — along with expected patented medicine pricing regime changes and COVID-19 — is shaping intellectual property law in the health sciences now.
Since Health Canada has fast-tracked the authorization process for needed medical devices and diagnostic tools, hand sanitizers and disinfectants to combat the spread of COVID-19, there are new regulatory, advertising and marketing regimes to navigate. There are also patent and trademark protections for this new environment.
“Things are moving more quickly, at least these days, with respect to certain types of products [for] COVID,” says Marc Richard, a partner at Gowling WLG (Canada) LLP in Ottawa.
“Because of the speed at which these products are being brought to market and the types of product . . . it’s more of a challenge to fit within how our laws are structured and how our system works,” he says.
There is also more movement in the psychedelic space, says Micheline Gravelle, the life sciences practice group leader at Bereskin & Parr LLP in Toronto.
Research continues with “magic mushrooms,” which contain psilocybin, an agent researchers believe could help treat drug dependence, anxiety and mood disorders. The cannabis sector is still strong, says Gravelle, “but now we’re seeing this psilocybin/psychedelics/mushroom space expanding and sandwiched with COVID, which we never expected.”
Revised patented drug pricing regime
The new Patented Medicine Prices Review Board (PMPRB) regulations were published in August 2019. They originally were meant to take effect on July 1, 2020, then Jan. 1, 2021 and now July 1, all due to the pandemic. That date could move again, says Lainson.
The Patented Medicine Regulations were substantially amended in 2019 and added three new factors the PMPRB must consider in determining whether the price of a patented medicine sold in Canada is excessive: the pharmacoeconomic value of the treatment; the market size; and the gross domestic product and GDP per capita in Canada.
The amendments also revised the list of comparator countries for patented medicines. Those 11 countries are Australia, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden and the United Kingdom, with the United States and Switzerland both removed from the list.
When the new pricing regime does come into force and effect, it will affect pricing on patented drugs already on the market, as well as new patented drugs. But there are court proceedings challenging jurisdiction, says Lainson, regarding how regulatory changes fall within the jurisdiction and authority of the PMPRB under the Patent Act, as well as a constitutional challenge to the law itself.
Pharmaceutical companies have vehemently opposed the new regime. There are several changes in calculating the maximum price that pharmaceutical companies can charge in Canada, says Gravelle. Under the current regime, the price of a patented medicine had to be compared to those in seven other countries. The new rules expand this to 11 countries, with lower-priced countries substituting for the U.S. and Switzerland.
“This is a regime that controls the price, but now they’ve made some changes that are probably going to [mean] that drug companies can charge less in Canada,” Gravelle says.
In August, Life Sciences Ontario — a not-for-profit organization representing and promoting the interests of Ontario’s life sciences sector — wrote an open letter to the PMPRB charging that “from the outset, the PMPRB’s approach to drug price regulation has been rife with problems . . . The application of economic factors makes it difficult for companies to appropriately price their products, which also makes the return on investment highly uncertain. This, in turn, makes it difficult for companies to make a compelling business case to prioritize the Canadian market for new medicine launches and investments in clinical research, patient support programs, compassionate funding or even Special Access Programs.”
A report commissioned by Life Sciences Ontario found that Canada had been getting faster and more extensive access to new therapies relative to other countries until the drug price controls were adopted in 2019. The number of new, globally launched drugs commercialized in Canada then dropped by 40 per cent, despite the number of global launches rising during the year. And by mid-2020, the IQVIA report found, Canada benefitted from less than half of the new therapies launched globally in 2018.
The ever-changing date for the new regulations coming into force will also affect what pharma companies charge for their drugs when they reach the market, says Lainson. Companies will also want to know how judicial decisions will affect the regulations.
A federal election and change of government could also affect intellectual property laws, Lainson says. The past few years have brought significant changes to Canada’s Trademarks Act, Patent Act and Industrial Design Act and their regulations, she adds. Although changes in government have not historically brought significant changes to IP law, “it’s hard to say what the future will hold.”
As a lawyer working for innovator companies in the patent space, though, “I feel that Canada is a bit out of step with other countries,” she adds.
“We seem to keep creating anti-pharma sentiment in Canada that’s not going to make Big Pharma want to do business here,” says Gravelle. “That’s my concern,” including that Canadians may not have access to drugs they would otherwise because pharmaceutical companies are not interested in launching in Canada.
After Canada entered into the Comprehensive Economic and Trade Agreement with Europe in August 2014, Canada started allowing patent extensions after patents were granted. She says the extension was only two years, unlike the five years given in most European countries.
“All these various pieces together create a climate that isn’t really pharma-friendly. I agree you want to get medicines to Canadians at a reasonable cost, but these new changes might be going too far” and discourage pharmaceutical companies from wanting to do business in Canada, Gravelle adds.
Although the Supreme Court of Canada struck down the so-called promise doctrine in December 2017 in AstraZeneca Canada Inc. v. Apotex Inc., other grounds for attacking patents have emerged, says Richard. For example, parties have challenged the validity of patents based on “overbreadth,” which is generally framed as an allegation that the patent claims are broader than the invention disclosed.
Another ground for attacking patents is “double patenting,” meaning a second patent for the same or similar invention claimed in an earlier patent. Double patenting has become a common challenge to patent validity in Canada since the Supreme Court of Canada’s decision in Whirlpool Corp. v Camco Inc. in 2000, Smart & Biggar wrote in a July 2020 bulletin. The “Canadian double-patenting doctrine is similar to the U.S. double-patenting doctrine, but subtle differences between the two can lead to a fatal double-patenting issue for a Canadian patent that would otherwise be easily resolved for its U.S. counterpart under U.S. practice.”
In March, the Federal Court of Appeal handed down its decision regarding the drug Vyvanse. This drug can treat inattention and hyperactivity/impulsivity, including binge-eating disorder. In Apotex Inc. v Shire LLC, 2021 FCA 52, the court clarified how to apply the test for obviousness for patents and concluded that the claims at issue were not obvious.
Lainson is also seeing “some very strong pro-patent-type decisions that are more consistent with what we saw a few years ago . . . Overall, I think we’re in a very good space in terms of patenting, and the types of patents we’re seeing in health care.” For some time, biotech was struggling in the U.S. and diagnostics as well, she says.
“And now that there is more of a return to normal or a better understanding of how to secure valid IP rights, I think we’re seeing a bounce-back — a little delayed behind the U.S., but we are seeing, I think, more innovation in the diagnostic and the biotech space.”