Pharmaceuticals Main Attraction in TPP IP Chapter

Patent law can be a polarizing topic, but it is especially so during international trade negotiations. Perhaps this is because the principles of patent law create fundamental conflicts between those that own patents and those that pay for patents. Despite this divide, these negotiations, along with some international diplomacy, often produce patent chapters that fall short of both advocates’ highest hopes and critics’ worst fears. Such is the case with the Trans-Pacific Partnership (TPP).

The latest of international trade deals, the TPP, signed October 5th, 2015, produced about seven pages of patent provisions that, under Canadian law, leave little impact. The Federal government’s official position is that Canadian law is already in compliance with these provisions. While this might be true, a more objective analysis of the text could support the argument that the TPP does in fact require some legal reform. However, legal reform would not create new legal obligations, as Canada has already committed to that reform under the newly minted Comprehensive Economic and Trade Agreement (CETA)

Of all the TPP’s patent provisions, three concerning pharmaceutical drug patents are most notable. The first is patent term restoration, which extends patent terms in response to administrative delays. And the third is extended data protection specifically for biologics, a new form of prescription drug.

The first of the TPP’s notable provisions, concerning patent term restoration, can be found in articles 18.46 and 18.48. Both provisions offer patent extensions in response to administrative delays. Article 18.46 grants extensions for patent office delays, and extends pharmaceutical patent terms by a time equal to any “unreasonable” delay in a drug’s regulatory approval. Article 18.48 is not currently found in Canadian law, nor under .

The purpose of the provision is to recognize that patent enabled drug monopolies are of little value when drugs cannot be legally sold. This is welcome news for those who believe current patent terms successfully incentivize innovation, as lost monopoly time would hinder pharmaceutical development. Also, everyone can appreciate how the provision detaches patent terms from flexible regulatory approval processes, adding certainty to IP investments and assurances against regulatory favouritism. Yet some critics argue term restoration is a tool for IP owners, used to extend an already sufficient monopoly.

The second notable provision is article , patent linkage. Opponents of patent linkage argue that tying marketing approval to previous patents creates space for tactical litigation, which can be used to delay generic competition and, in effect, extend patent terms. Although this was a debated topic during and after TPP negotiations, Canada has already employed patent linkage rules for some time, and has also committed to linkage rules similar to the TPP since signing CETA.

The last of the TPP’s notable provisions can be found in articles 18.50 and 18.52, which offer . This type of research is necessary for marketing approval and is an expensive cost of drug development. Supporters of data protection argue these provisions shield drug developers from free-riders, thus incentivizing invention. Though opponents might take issue with adding protecting of information on top of invention.

However, these provisions do not create monopolies on information, the way patents create monopolies on invention. Generic companies are free to rely on the same safety and efficacy data as the patent owners, so long as it is reproduced at their own expense.

The TPP grants a five-year protection on drug efficacy and safety data, and an additional three-year protection on research concerning biologic drugs, so-called large molecule drugs. Biologics are an emerging field of pharmaceuticals, and the extended protection is meant to recognize the often high risk and cost associated with exploratory research.

However, some evidence suggests that a longer term of twelve years would be ideal, even considering this advantage. The TPP’s compromise is eight years, which reflects Canada’s current treaty obligations.

It is difficult to determine whether the provisions presented in the TPP’s patent chapter will help or harm Canadian interests. This determination will depend in no small part on which perspective the analysis is based. The TPP’s patent provisions are likely not immediately useful for consumers of patented drugs. Patent term restoration, patent linkage, and data protection all serve to strengthen patents.

However, these are welcome provisions from the perspective of drug developers, as they increase the value of existing and new patents. In this sense, perhaps the rules are also good for Canada. For example, biologics were given special protection to encourage investment. Canada’s pharmaceutical research and development sector, one of its largest, would likely benefit from this improvement in market conditions, especially since investment in that sector has recently suffered steady decline.

 

Matt Wallace is an IPilogue Editor, JD Candidate at University of New Brunswick, and writes on technology law.

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