Eli Lilly Raises Stakes: Says Canada Now Owes It $500 Million For Not Granting A Patent It Wanted

from the too-much-is-never-enough dept

Tue, Jul 23rd 2013 11:53am — Glyn Moody

A few months ago we wrote about the extraordinary -- and worrying -- case of Eli Lilly suing Canada after the latter had refused to grant a pharma patent. Eli Lilly's contention was that by failing to grant its patent (even if it didn't meet the criteria for a patent in Canada), Canada had "expropriated" Eli Lilly's property -- and that it should be paid $100 million as "compensation".

But it seems that the company has had second thoughts. Not that its action was outrageous, and that it ought quietly to retract its suit in the hope that people might just forget about this display of presumption; instead, it has decided it was far too generous in asking for only $100 million, as this Globe and Mail story explains:

U.S. pharmaceutical giant Eli Lilly and Co. has escalated a challenge it launched last year against Canada's patent rules under the North American free-trade agreement, and is now demanding $500-million in compensation after the company lost its Canadian patents on two drugs.

Indianapolis-based Lilly has expanded the NAFTA case over the loss of its patent for Strattera, a drug used to treat attention deficit hyperactivity disorder, to also include Canada's invalidation of the company's patent for Zyprexa, which is used to treat schizophrenia.

This shows that the initial action was no one-off, and that if Eli Lilly's action succeeds, we can expect it and many other companies to avail themselves of this method of extracting money from the public purse, as provided for under NAFTA's investor-state dispute settlement (ISDS) clauses.

What's troubling is that similar ISDS schemes are being negotiated for both TPP and TAFTA/TTIP. That will give corporations even more opportunities to sue nations for supposed "expropriation", and to challenge perfectly legitimate local laws that dare to stand in the way of bigger profits.

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Filed Under: canada, investor state disputes, patents
Companies: eli lilly

36 Comments

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Atkray (profile), 23 Jul 2013 @ 11:32am

Tough call
I find myself thinking it might be good if they collect the money, maybe then countries will quit signing these agreements.

But I hate to think of the damage that will happen until then.
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Anonymous Coward, 23 Jul 2013 @ 12:01pm

If Canada goes along with the TPP it will be a disaster.
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ChurchHatesTucker (profile), 23 Jul 2013 @ 12:02pm

Re: Tough call
But they're the ones paying countries to sign these agreements.
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DannyB (profile), 23 Jul 2013 @ 12:04pm

Eli Lilly is pissed because it doesn't own Canadian govermnent
As a matter of moral principle, Eli Lilly should be able to own the Canadian government and other governments.

If that right of ownership is not granted, then at least the Canadian government should do whatever a foreign corporation wants.

If a government, including Canada, does not bow to every wish of a foreign corporation, then shouldn't it be able to be sued according to somebody's (whos?) laws for big bucks?

Considering the general state of (lack of) understanding American's have of world geography, world politics, etc, wouldn't the executives at Ely Lilly consider Canada to be just another US possession, territory or state like Mexico and therefore subject to American Corporate laws?
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Josh in CharlotteNC (profile), 23 Jul 2013 @ 12:06pm

Re: Re: Tough call
Paying countries =/= paying off politicians of those countries
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ChurchHatesTucker (profile), 23 Jul 2013 @ 12:14pm

Re: Re: Re: Tough call
Distinction without a difference, if you're paying.
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Anonymous Coward, 23 Jul 2013 @ 12:17pm

Re: Tough call
Or Eli Lilly can 'win' but Canada still refuses to pay or give them a patent. That way people see how dangerous the ISDS clauses are, and Eli Lilly STILL gets screwed over.
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Tunnen, 23 Jul 2013 @ 12:21pm

Blame Canada
Hmmm, we didn't meet the requirements for a patent in Canada? Who do we blame? Ourselves? Heck no, BLAME CANADA!
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Tydog, 23 Jul 2013 @ 12:23pm

Cut
I'll cut every motherfucker involved if it means I have to pay less taxes.
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Anonymous Coward, 23 Jul 2013 @ 12:31pm

$500M is a little more than $14 for every person in Canada.
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Anonymous Coward, 23 Jul 2013 @ 12:33pm

Re: Re: Re: Re: Tough call
The difference is that the politicians get the bribes, the pharma companies get the patents, and the public gets to pay three times.
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Michael, 23 Jul 2013 @ 12:33pm

Re: Blame Canada
Yeah!

Piracy - Canada's fault
Terrorism - yup, Canada too
Child porn - darn Canadians
Bad acting - oh, wait, that really does come from there
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Anonymous Coward, 23 Jul 2013 @ 12:34pm

Re: Blame Canada
They're not even a real country anyway!
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Anonymous Coward, 23 Jul 2013 @ 12:34pm

From the Globe and Mail article Linked above:
"Lilly claims that Canadian Federal Court judges, using what the drug company calls a �promise doctrine,� are demanding that patents include too much scientific proof of the efficacy of a drug at early stages."

Seriously they're complaining that they actually have to prove the drug works.
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crade (profile), 23 Jul 2013 @ 12:37pm

Re: Re: Tough call
If they win in any form it would mean the collapse of any form of actual agreement. They are trying to claim that because they like to call patents property now that previous trade agreements with the term "property" in them should apply to it patents now.. You could change any agreement to mean anything you want with that sort of reasoning.

Whatever the result, it's not possible for them to get screwed over. They either get a whole bunch of money for nothing, or they don't.. They can only get screwed over in their heads where Canada owes them something.
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DannyB (profile), 23 Jul 2013 @ 12:38pm

Re: Blame Canada
That subject line is a song from the South Park movie "Bigger, Longer, Uncut". (I doubt it cost $200 Million to make.)
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Anonymous Coward, 23 Jul 2013 @ 12:41pm

Re: Re: Blame Canada
Wait a second! I thought that was Google's fault.
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artp (profile), 23 Jul 2013 @ 12:42pm

Eli Lilly and ethics
Eli Lilly, of course, is one of many pharmaceutical corporations whose quality assurance programs, dictated by law under the Food & Drug Act, was so abominably bad that the FDA stepped in and took control of their QA department themselves. I would be ashamed to show my face in public after that, but Lilly has apparently gotten over the shock, and determined that their honor was only "mostly dead".

I also note that the "free trade treaty" adherents want anything in the world OTHER than free trade. If they really did, then anybody could make those life-saving and life-changing drugs. Thank God we finally have THAT issue settled.
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John Fenderson (profile), 23 Jul 2013 @ 12:48pm

Re: Eli Lilly and ethics
I would be ashamed to show my face in public after that

That's because you're not a drug company. Drug companies are notorious for their total lack of ethics or sense of shame.
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artp (profile), 23 Jul 2013 @ 12:58pm

Re: Re: Eli Lilly and ethics
There must be a pill for that!
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That One Guy (profile), 23 Jul 2013 @ 12:59pm

Re: Re: Eli Lilly and ethics
Seeing no problem charging thousands upon thousands of dollars for life-saving medicines, well after the profits from sales have more than paid off the R&D costs to develop them?

Yeah, being a complete and utter sociopath is pretty much a given for the higher ups in companies like that.
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Anonymous Coward, 23 Jul 2013 @ 1:33pm

The U.S. government now owes me one trillion dollars for not giving me the billion dollars I wanted.
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Paul Clark, 23 Jul 2013 @ 1:40pm

RE: This May Be Very Bad for ELI Lilly in the End
If I recall correctly, Canada will not patent drugs that are not an improvement on existing medications. This is what ELI Lilly is complaining about. We would not let them patent a drug that is not an improvement over existing medication.

Canada used the same law to prevent the licensing of THC in a inhaler. It was designed as an anti-nausea and for pain relief. If ELI Lilly winds this case, we will license the this drug and demand that it be licensed in the US. We can sell it for a lot less that existing medications. If the US fails to license it, we will demand billions in lost profits.

Or we could consider the attempt the selling of an inferior drug a terrorist act. The US has set the standard of behaviour for that.
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crade (profile), 23 Jul 2013 @ 1:50pm

Re: RE: This May Be Very Bad for ELI Lilly in the End
There is a rule that if you don't come reasonably close to meeting your promises that you made regarding what the drug will do when you applied for the patent then your patent is invalid.
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Anonymous Coward, 23 Jul 2013 @ 2:38pm

so, why does Canada tell the company to go fuck itself?

why does everywhere not get off this meal ticket that was introduced by the USA, as is the usual case when there is something introduced that can screw everyone else but make an American industry/company/person a fortune for doing nothing, just like the way all countries are threatened by the US over copyright etc not being strict enough. we all know that this aids no one except the US but everywhere is expected to lose out in order to make things better for Hollywood!
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Anonymous Coward, 23 Jul 2013 @ 2:42pm

so all countries are expected to comply with what US companies say, ie, give patents when they are not valid or even possibly going to be life threatening or face possible bankruptcy if trying to save lives by defending their actions and not grant patents? has the whole world gone absolutely fucking mad?
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Anonymous Coward, 23 Jul 2013 @ 4:32pm

ISDS are anti-democratic
The great thing about Investor-State dispute settlements is that since the State in question has voluntarily given up a chunk of their sovereignty, it doesn't matter at all what the Canadian voters want -- effectively, Eli Lilly isn't a corporate legal-person, it's a corporate quasi-State! And the voter's job is to pay their taxes and to shut up.
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Anonymous Coward, 23 Jul 2013 @ 7:35pm

Re: Re: Re: Blame Canada
Compromise, do "Canadian Google". its like Canadian Bacon(even if its too thick) and Regular Bacon.
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Anon, 23 Jul 2013 @ 9:46pm

Still,...
The nice thing about a dictatorship disguised as a democratic majority parliamentary government is...

You know how some countries can pass laws making it illegal to sue a Telco over their cooperation with spy agencies? Well, Canada can pass a law nullifying the big pharma's lawsuit; or they could cave, hand out the money, effectively ringing a giant dinner bell and yelling "come and git it!"

If Eli claims that's not constitutional - well Canada has a loophole you can drive a truck through, that a law can be passed "notwithstanding" that it would be otherwise unconstitutional, if there's a big enough majority (66% IIRC). If the Conservatives don't want to pay, and the main opposition NDP don't believe in handing money to big business - sorry, no money.

I'm guessing if push comes to shove they will simply pass a law saying that EL is SOL.
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Niall (profile), 24 Jul 2013 @ 5:03am

Re:
No, just the US-based oligarchy. All other countries are just states without rights.
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Hephaestus (profile), 24 Jul 2013 @ 9:23am

Re: Re: Tough call
Or Canada simply drops the NAFTA.
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Mike Raffety (profile), 24 Jul 2013 @ 2:33pm

Investor-State dispute against the U.S.?
Has this ever been used against the U.S.? Surely it's *possible*?

Ah, apparently so -- you'd think a little "good for the goose, good for the gander" might change their minds.

https://en.wikipedia.org/wiki/Investor-state_dispute_settlement#Apotex_v._the_United_State s
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Anonymous Howard (profile), 25 Jul 2013 @ 5:12am

Re: Eli Lilly is pissed because it doesn't own Canadian govermnent
We're getting alarmingly close to a world described in Shadowrun, where corporations are extra territorial, have their own laws and own every government in the world.

Now, if only magic could return... :D
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Niall (profile), 26 Jul 2013 @ 5:01am

Re: Re: Eli Lilly is pissed because it doesn't own Canadian govermnent
I want to change into an elf! :)
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Wendy, 9 Sep 2013 @ 12:30pm

Re: Re: Blame Canada
Rot in hell you damned Yank
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Wendy, 9 Sep 2013 @ 12:34pm

Re: Re: Blame Canada
Canada is so much better than the U.S. Look at how quickly your country is sinking pal. Oh ya, and China owns you. That is a fate worse than death!
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