Canada Capitulates: Supreme Court Throws Away Government's Great Pharma Patent Victory

from the who-needs-the-law-when-you-can-bully? dept

Techdirt readers will probably recall a long-running saga involving corporate sovereignty, $500 million, the US pharma company Eli Lilly, and drug patents. In its claim against the Canadian government, made using NAFTA's Chapter 11, Eli Lilly insisted it should have been given some drug patents, despite Canada's courts finding that they had not met the requirements for patentability -- specifically that there was no evidence that the drugs in question provided the benefits in the patent. Eli Lilly said that Canada was being unreasonable in setting a slightly higher bar than other countries by demanding that a patented drug should actually do something useful. As Mike reported back in March, even the lawyers that made up the corporate sovereignty tribunal hearing this case agreed that Canada was within its rights to take this view. They not only dismissed the claim, but ordered Eli Lilly to pay Canada's legal fees.

This was a huge win for Canada in particular, and governments in general. At the time, it all felt a little too good to be true. And now seems it was: as infojustice.org reports, the Supreme Court of Canada has just overturned decades of precedent -- and implicitly the Eli Lilly ruling -- by making it easier for Big Pharma to gain patents on medicines that don't really work:

This reversal in AstraZeneca Canada Inc. v. Apotex, Inc. is particularly disconcerting because Canada had just won an investor-state arbitration award in the long awaited Eli Lilly v. Canada case upholding its more stringent promise/utility doctrine that had been used successfully to overturn two dozen secondary patents, particularly those claiming new uses of known medicines, where patent claimants failed to present evidence in support of the prediction of therapeutic benefit promised in their patent applications.

Thus Canada's Supreme Court has inexplicably thrown away the government's earlier victory, and undermined the country's more rigorous approach to granting pharma patents. Writing for infojustice.org, Brook K. Baker believes this stunning capitulation is a result of unremitting bullying from the US:

Canada had been under intense pressure from the US, which had placed Canada on its Special 301 Watch List for five years threatening that the promise/utility doctrine unreasonably harmed Big Pharma in the US and from the pharmaceutical industry itself which claimed that the doctrine violated global patentability criteria. President Trump's hardball campaign promise to rewrite or leave the North American Free Trade Agreement because of its failure to adequately protect US intellectual property interests may also have played a role. Likewise, President Trump's more recent assertions that US payers are unreasonably subsidizing biomedical research and development because other countries, like Canada, are paying lower prices for innovator medicines than insurers and other payers in the US may also have increased pressure on the Court.

It's really sad to see the Canadian court kowtowing like this, undermining its own independence and moral authority in the process. Weaker patents will lead to the Canadian taxpayer paying higher prices for less-effective drugs. Worst of all, the Big Pharma bullies, aided and abetted by a newly-aggressive US government indifferent to other countries' health problems, will be encouraged to push for even more patent protection all around the world. That will lead not just to higher prices, but to more suffering and avoidable deaths, as crucial medicines become unaffordable for poorer patients.

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Filed Under: canada, corporate sovereignty, isds, patents, trade agreements
Companies: apotex, astrazeneca, eli lilly

AstraZeneca Tries To Use 'Orphan Drug' Designation To Extend Patent Life Of Top-Selling Pill

from the evergreen-desire-to-hang-to-intellectual-monopolies dept

At the heart of copyright and patents there is -- theoretically -- an implicit social contract. People are granted a time-limited, government-backed monopoly in return for allowing copyright material or patented techniques to enter the public domain once that period has expired. And yet copyright and patent holders often seem unwilling to respect the terms of that contract, as they seek to hang on to their monopolies beyond the agreed time in various ways.

In the case of copyright, this has been through repeated extensions of copyright's term, even though there is no economic justification for doing so. In the realm of pharma patents, a number of techniques have been employed. One is "pay for delay." Another is the granting of "data exclusivity." And a third is the use of "evergreening." Techdirt wrote about the last of these a while back, so it's no surprise that companies have continued to "innovate" in this field since then. For example, AstraZeneca is trying to use a variant of evergreening for its anti-cholesterol pill Crestor. As a New York Times article explains:

Crestor is the company’s best-selling drug, accounting for $5 billion of its $23.6 billion in product sales last year. About $2.8 billion in sales were in the United States, where the retail price is about $260 a month, according to GoodRx.com.

Here's how AstraZeneca hopes to hold on to that lucrative market, even though its patent on the drug is now coming to an end, and it should be entering the public domain:

The company is making a bold attempt to fend off impending generic competition to its best-selling drug, the anti-cholesterol pill Crestor, by getting it approved to treat [a] rare disease. In an unusual legal argument, the company says Crestor is entitled to seven years of additional market exclusivity under the Orphan Drug Act, a three-decade-old law that encourages pharmaceutical companies to develop treatments for rare diseases.

In May, AstraZeneca won approval of Crestor to treat children with the rare genetic disease of homozygous familial hypercholesterolemia (HoFH ). That gives it an additional seven-year patent on the drug, but only for that particular -- very small -- market. However, the designation means that detailed prescription information about using Crestor to treat children in this way must not be included on the label. AstraZeneca's clever lawyers are trying to turn that into an extended patent for all uses of the drug:

AstraZeneca immediately petitioned the F.D.A., arguing that if the correct dose for children with HoFH could not be on the generic label, then it would be illegal and dangerous to approve any generic versions for any use at all. That is because doctors might still prescribe the generic for children with HoFH and choose the wrong dose, posing "substantial safety and efficacy risks."

Needless to say, AstraZeneca was only asking for generic versions to be kept off the market for another seven years for safety reasons, not because doing so would bring it billions more in exclusive sales to the general population. Of course.

The New York Times article goes into more detail about the fascinating legal background to AstraZeneca's argument here, and notes that other drug companies have tried the same approach in the past, without success. Even if this particular ploy does fail again, we can be sure that pharma companies will be back with other sneaky ways of extending their patent monopolies -- implicit social contract be damned.

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Filed Under: blocking, competition, crestor, evergreening, fda, generics, new uses, patents
Companies: astrazeneca