A consideration of why Canada should answer the European Union’s call for heightened IP protection for pharmaceuticals

This briefing contributes to the current debate around IP rights for pharmaceuticals in Canada.

Against the backdrop of the CETA trade negotiations, Norton Rose Group’s Toronto-based head of pharmaceuticals and life sciences, Patrick E. Kierans, and colleagues Kristin Wall and Jill Daley employ a comparative study to highlight why Canada should answer the European Union’s call for heightened IP protection for pharmaceuticals.

On average, the EU is approving new drugs faster and enabling patent term restoration, leaving Canadian innovators doubly disadvantaged compared with their second-largest trading partner.  Implementing patent term restoration and extending the term of data protection will help to level the playing field with Europe.  For the majority of the sampled products, extending data protection by two years appears to provide greater security for innovators without extending overall IP exclusivity for innovative medicines.  Increasing the rate of drug approval in Canada will diminish any market exclusivity impact of data protection and patent term restoration, while giving Canadians earlier access to new medicines.

See also our July 2011 briefing: “European Union – Canada debate IP rights for pharmaceuticals” (assessing proposed legal reforms).


Canada and the European Union met in Ottawa this October for what may be the last full round of trade negotiations on the Comprehensive Economic and Trade Agreement (CETA). The issue of harmonizing European and Canadian intellectual property rights for pharmaceuticals remains open for negotiation.

Having already identified pharmaceutical IP rights as an area where Canada must improve,  the EU has proposed three legal or regulatory reforms: 

  • provide innovator companies with fair treatment under the Patented Medicines (Notice of Compliance) Regulations, namely providing innovators with the same effective right of appeal in court proceedings under these regulations that generic manufacturers have;
  • extend the term of data protection; and
  • implement patent term restoration (PTR).

This briefing focuses on the latter two reforms (data protection and PTR) as both reforms have the potential to affect drug market exclusivity in Canada.  While important to innovators for greater market certainty, the proposed reform on effective innovator appeal rights is not specifically addressed as it does not directly impact overall drug market exclusivity, but rather acts as safeguard against a premature finding of patent invalidity or non-infringement.

Data protection and patent term restoration – Canada vs. EU

Data protection in Canada presently provides eligible innovative drugs with eight years of drug market exclusivity, with the possibility of a six-month extension for submitting pediatric trial data.  Generic manufacturers are prohibited from filing a comparative drug submission relying, directly or indirectly, on the innovative drug’s clinical trial data during the first six years of the eight-year term.  No generic will be granted marketing approval until the applicable data protection term has expired.

Data protection in Europe operates similarly, except the total market exclusivity provided is typically 20 percent longer (i.e., 10 years in total with an eight-year no-filing period).  An eleventh year of data protection can also be granted for approval of a new use, dosage form, etc.

PTR provides drug market exclusivity by accounting for some of the lost patent term benefit during a drug’s development and regulatory approval phase.  It is not unusual for a new drug to enter the Canadian market with less than half of its 20-year patent term remaining. PTR is available in Europe in the form of “supplementary protection certificates” (SPC).  SPCs cannot restore more than five years to the patent and cannot extend a drug’s remaining patent term beyond 14 years. Canada is one of the only developed countries that does not provide for any form of PTR.

A comparative look at drug market exclusivity in the EU (i.e., data protection, patent term, SPC) and Canada (i.e., data protection, patent term) supports the case for heightened data protection and PTR in Canada.


In order to consider the impact of adopting the proposed IP reforms on data protection and PTR in Canada, the authors compared the total market exclusivity provided by data protection and patents for a sample of 22 drugs approved in both Canada and the EU.1 Specifically, the 22 candidate drugs were selected from Canada’s Register of Innovative Drugs (Innovative Register), which listed (as of July 2011) 105 “innovative” human drugs granted data protection in Canada.

Twenty-two drugs were selected in order to obtain a 20 percent representative sample of the 105 drugs listed on the Innovative Register.  Candidate drugs with the most recent approval dates were selected, and include products with significant IMS global sales.2

In order to assess the comparative drug market exclusivity provided by data protection and patents in Canada and Europe, candidate drugs were required to have: (1) data protection; (2) patents listed on the Canadian Patent Register; and (3) a central European market authorization.

The following data was collected for each candidate drug in both Canada and the EU:

  • date of market approval;3
  • data protection expiry date;4
  • earliest patent expiry date;
  • latest patent expiry date; 5 and
  • where applicable, the grant of an SPC.6


Slower Canadian drug approval times as compared with the EU make a strong case for implementing patent term restoration in Canada.

In 17 of the 22 candidate drugs considered (77%), drugs were approved earlier in the EU than in Canada: time differences ranged from five years (as with Abilify) to four months (as with Ilaris, Daxas).  Of the sample drugs considered, Canadian drugs were approved an average of 451.4 days later than in the EU.

Since the date a new drug submission (NDS) is filed in Canada is generally not available in the public domain, we were not able to compare the relative speed of approval for the sample drugs selected.  However, according to Health Canada’s data on drug submission approval times, the median NDS approval time for 2010, including priority approvals, was 433 days – 1,563 days being the longest approval time and 216 days the shortest approval.7 Comparatively, the European Medicines Agency (EMA) annual report for 2010 states that the total average approval time for central European approvals granted in 2010 was 281 days.8 As a result, EU drugs were, on average, approved 152 days faster than the median Canadian approval.

Slower drug approval denies Canadians timely access to new medicines.  Slower drug approval also reduces the patent term: drugs launched in Canada may have far less of the 20-year patent term remaining than drugs launched in the EU.

Canada already clearly stands out amongst virtually all OECD (Organisation for Economic Co-operation and Development) countries for failing to provide PTR. This briefing highlights the impact of this omission in the Canadian IP regime.  EU drugs benefit from longer patent terms due to faster drug approval; as well as this, patent terms for EU drugs can be extended (for up to five years) to compensate for any portion of patent term lost for time spent in regulatory drug approval.

Implementing PTR in Canada would compensate in part for the patent term benefit lost due to Canada’s slower rate of drug approval.  Additionally, to the extent that Canada’s approval times materially improve, the likelihood of any PTR being granted would decrease significantly.

Harmonization with the EU (i.e., extending data protection from eight years to 10 years in Canada) would not extend the total market exclusivity granted to Canadian drugs in the majority of cases.

Of the 22 drugs sampled, only eight Canadian drugs had total market exclusivity terms that would be extended were Canada to adopt the EU’s data protection regime.  This is because most of the candidate drugs considered had patent protection that extended beyond the term of data protection, meaning that the extension of data protection from eight years to 10 years in Canada would have no impact in the majority of cases.

In order to further verify this result, the authors considered all 105 of the human health drugs listed on Health Canada’s Innovative Register.  Of these drugs, 81 had patents listed on the Canadian Patent Register; 58 of 81 (72%) benefited from patent terms that extended beyond the data protection term.  On average, the patent term for these 58 drugs extended 4.5 years past the data protection term.

With respect to the potential impact of PTR, only five of the 22 sampled products had been granted SPCs to date in Europe, which resulted in an average of two to three years of market time compensation for these five products.9

As a result, for drugs with data and patent protection in Canada, it may be concluded that total market exclusivity is governed primarily by the patent term, and not by the term of data protection.  Here again, if Canadian drugs were approved faster, earlier approval dates would further diminish the impact of greater data protection market exclusivity over and above patent protection or any PTR.


A comparative look at 22 drugs approved in both the EU and Canada reveals that adopting the proposed CETA IP reforms will not automatically result in longer terms of drug market exclusivity.  In many cases, the overall term of drug market exclusivity is governed by the 20-year patent term, which is the same in both Canada and the EU.

Canadian innovators are losing patent term benefit at the front end due to the length of time taken to comply with regulatory requirements.  The EU is approving new drugs earlier and facilitating PTR, leaving Canadian innovators doubly disadvantaged, which has a significant impact on global marketing and R&D investment decisions.  Implementing PTR is a necessary step to bring Canada up to the same level of patent protection as virtually all of its major trading partners. Extending the data protection term in Canada will provide innovators with more certainty, without extending market exclusivity beyond that already fixed by the patent term in the majority of the drugs considered.  Substantially improving the rate of new drug approval in Canada will also diminish the market exclusivity impact of data protection over and above patent protection, at the same time granting Canadians earlier access to new medicines.

* This briefing does not constitute legal advice.  The data collected on market exclusivity was done for the sole purpose of this briefing.  The authors do not represent or warrant the applicability or expiry of any term of data protection, patent term or patent restoration term for the drugs considered.*