Author
Brett J Skinner, Ph.D.
Background
New drugs are patented at the time that they are discovered. Patent terms in Canada are currently 20 years. However, time spent in clinical trials (testing safety and effectiveness) consumes much of the patent term for new drugs. Delays in government regulatory and reimbursement processes, as well as court decisions that invalidate patents further shorten the actual period of market exclusivity for new patented drugs, leaving far less than 20 years of actual market exclusivity when the drug is finally available to be sold for use by patients.
Objective
To measure the actual period of market exclusivity (in the publicly insured markets) for the new patented drugs approved by Health Canada that were covered under public drug plans in Canada during the years 2004 to 2015.
Data and Methods
IMS Health conducted the analysis following the specifications of the author. Data sources included IMS Health’s proprietary databases, as well as publicly available data from Health Canada, the Canadian Agency for Drugs and Technologies in Health (CADTH), the pan-Canadian Oncology Drug Review (pCODR); the Pan-Canadian Pharmaceutical Alliance (PCPA) and the provincial Ministries of Health. The study examined all new non-cancer drugs that were approved for sale by Health Canada from 2004-2014, and were reviewed by CADTH’S Common Drug Review (CDR) and all cancer drugs that went through pCODR from 2010 – 2014. Public drug plan coverage status was assessed current to June 17, 2015.
Results
The actual period of market exclusivity for new drugs in the publicly insured markets in Canada is very short. For drugs that experienced a generic entrant during the period of study the actual effective life of a patent ranged from 3.4 to 6.5 years, and averaged 6.0 years. For the drugs that had not yet experienced generic entry during the period of study, the expected effective life of a patent ranged from 7.4 to 11.6 years.
Conclusions
Several governmental factors are eroding the practical economic value of the intellectual property rights embodied by pharmaceutical patents by shortening the effective period of market exclusivity in Canada. Four policy options are available as remedies.
