Intellectual property protection for biologic medicines in Canada falls far behind that in other countries, a new report from the Fraser Institute has found.
Biologics’ intellectual property includes both the chemical structure of the molecule and the process for manufacturing it in living tissues, so product patents alone aren’t enough to protect and incentivize their development, Fraser Institute senior fellow Kristina Lybecker wrote in the report.
Process patents are “proportionally more important,” she wrote, since they can protect the manufacturing process and facilities used in creating biologics. But even they don’t cover the pharmaceutical company’s safety and efficacy data derived from preclinical and clinical trials. That information requires protection from data exclusivity provisions, which, for a set number of years after a medication’s approval, blocks competitors from using the company’s safety data to obtain approval for a biosimilar.
Read: Drug plan trends report: How drug plans are addressing skyrocketing costs
“Generic firms could go ahead and enter the market,” Lybecker tells Benefits Canada. “They would just have to generate their own safety and efficacy data. That’s expensive. So most generic or biosimilar firms choose to wait and rely on the pioneer product data before entering the market.”
Data exclusivity lasts for eight years in Canada, compared with 10 years in the European Union and 12 years in the United States. “Whether 12 years is the right number is highly debated,” says Lybecker, who notes some studies suggest firms need 16 years of exclusivity to recover their investment.
“Canada only represents two per cent of the worldwide market,” says Suzanne Lepage, a private health plan strategist in Kitchener, Ont. So if a pharmaceutical company doesn’t think the return on investment is significant enough, it could simply skip over Canada.
“If you had a mother who had MS and you knew there was a promising drug that was being offered in Buffalo but you couldn’t get it here for her, you’d be pretty upset,” she says. “So that’s the risk for us as Canadians, that we won’t get access to the same medication.”
Read: Plan sponsors get a primer on autoimmune conditions
But when it comes to plan sponsors, extending patent or data exclusivity timelines can lead to higher costs.
“Plan sponsors are concerned about the cost of biologic drugs,” says Lepage. “And so the downstream impact of a longer patent life means that it would take longer for a biosimilar to come to market.” That, of course, means plan members have to wait longer before they have access to less expensive medications.
“However, on the other side of the coin, by extending it, we may get better access to medication . . . [which] means people get healthier and are more productive and are able to stay at work,” she adds.
Lepage also points out pharmaceutical firms in Canada face other business challenges, such as pricing and reimbursement regulation. Patent and data exclusivity issues are “one piece of the puzzle,” according to Lepage.