Competition Bureau Closes Inquiry into "Evergreening", but Recommends Further Action

On February 27, 2004, Canada's Competition Bureau announced that it had closed its inquiry into the alleged misuse of Canada's drug patent laws by brand-name drug companies engaged in the practice of "evergreening." Under Canada's Patented Medicines (Notice of Compliance) Regulations (NOC Regulations), a generic drug company seeking marketing approval to sell its own version of a brand-name drug must address each patent listed on Canada's Patent Register for that drug and explain why there is no infringement of the listed patents. "Evergreening" describes the strategy of introducing variations to brand-name drug products so that pharmaceutical companies obtain multiple patents for the same basic drug product and add the new patents to the Patent Register. By adding new patents for a particular drug to the Patent Register after a generic company has filed a Notice of Allegation addressing the listed patents, brand-name drug companies can claim infringement of each new patent and can obtain successive 24-month delays in the approval of the generic drug. The Bureau recognized that evergreening could delay the entry of generic drugs into the market beyond the original patent protection period. However, the Bureau found that the practice is open to be challenged under the existing NOC Regulations and in the courts. In contrast, inquiries under the Competition Act relate to specific behaviour of a company and, in the view of the Bureau, were not suited for a general review of a regulatory regime. Based on these findings, the Bureau concluded that the Competition Act was not the appropriate vehicle to address the allegations raised in the complaint. In its statement to the federal government, the Bureau referred to a need to review Canada's drug patent laws: "From a competition policy perspective in particular, the Government may wish to review the current rules to ensure that an appropriate balance is maintained between protecting intellectual property rights and facilitating a competitive supply of pharmaceutical products for Canadian consumers." To view the Competition Bureau's findings, visit: http://makeashorterlink.com/?L36653CB7. http://makeashorterlink.com/?X27612CB7. For a copy of the NOC Regulations, visit: http://laws.justice.gc.ca/en/P-4/SOR-93-133/162617.html. For a copy of the Competition Act, visit: http://laws.justice.gc.ca/en/C-34/35027.html. For more information, visit: http://makeashorterlink.com/?U5C624CB7. Summary by: Nicholas Wong