U.S. Pharma Group Faults Canada’s Patent Standard in NAFTA Comments

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By Bronwyn Mixter

The U.S. pharmaceutical industry is going after Canada’s allegedly lax patent protection standards and wants the U.S. to instead enforce the standards of the North American Free Trade Agreement.

The Pharmaceutical Research and Manufacturers of America (PhRMA) said in recent comments to the U.S. Trade Representative that contrary to NAFTA “and longstanding international obligations and norms, the Canadian judiciary has created a new and heightened standard for determining patent ‘utility.’” This standard, called the promise doctrine, has led to 28 court decisions invalidating 25 biopharmaceutical patents for lack of utility since 2005, PhRMA said.

PhRMA said that as part of the Trump administration’s renegotiation of NAFTA, it should enforce NAFTA’s existing patent standard. U.S. Trade Representative Robert Lighthizer informed Congress in May of the Trump administration’s intent to renegotiate NAFTA, saying the trade deal has been hurting U.S. competitiveness and jobs. Comments on the renegotiation were due June 12.

The USTR will host a public hearing on the subject June 27. The agency will publish a summary of its specific NAFTA negotiating objectives around July 17, before formal negotiations begin.

NAFTA’s Existing Patent Standard

The patent standard in NAFTA says that, “if any invention is new, non-obvious, and useful ('utility'), that invention is entitled to be patented,” PhRMA said. “Specifically, it is well-accepted that inventions possess utility if they can be made or used in any kind of industry, including biopharmaceuticals.”

PhRMA said Canada is the only country in the world that uses the promise doctrine, “breaking the letter and spirit of its NAFTA and other international commitments on IP rights.”

“This doctrine continues to undermine patent protection and removes critical incentive that drives and sustains biopharmaceutical innovation,” PhRMA said.

Barrier to Innovation

Kristina M. Lybecker, associate professor of economics at Colorado College, told Bloomberg BNA June 15 Canada’s promise doctrine “creates an additional layer of expectation for the innovator.”

“Having to meet the utility standard [in the promise doctrine] means that in advance of knowing what your innovation really is going to do, you have to in a sense make promises about what treatment its going to be able to afford to people,” Lybecker said. “I think that from the innovation standpoint this is an additional barrier to getting products to market because it’s impossible to predict in advance what your drug is going to do and if you end up with something that doesn’t deliver in the same way or delivers something different, then you’re in violation of the utility standard.”

“That’s what’s happened in the court decisions. They’ve found that the promise doctrine has been violated because the drugs didn’t do what was promised in the patent application and then they’ve been revoked,” Lybecker said.

Doctors Without Borders Disappointed

However, an advocacy group that has criticized the pharmaceutical industry’s patent stance expressed disappointment with the NAFTA comments.

Judit Rius Sanjuan, U.S. manager and legal policy adviser of Doctors Without Borders’ Access Campaign, told Bloomberg BNA June 15 “we’re very disappointed with the submission by PhRMA. It’s completely disconnected with the reality of high drug and vaccine prices that we see around the world.”

“It seems PhRMA is still intent on advocating for stronger monopolies and stronger protections without really recognizing that countries have the right and also the obligation to have tools that are legally available, according to international law, to promote competition and restrict abusive patenting strategies of pharmaceutical companies,” Sanjuan said. “Canada, the United States and Mexico are countries that have international obligations to protect pharmaceutical patents and they grant patents for pharmaceuticals, and they restrict competition, and that’s one of the reasons why the prices of pharmaceuticals have raised significantly.”

Sanjuan said countries do have tools “around patentability criteria to reduce the number of patents that are granted” and “prevent abuses of the system.”

“What the PhRMA submission is basically saying in a nutshell is that countries should not be providing these legal safeguards to prevent the abuse of the system by reducing unnecessary patents,” Sanjuan said. “We’re advocating that countries do more and not less on reducing the number of unnecessary patents granted when they are not deserved according to international standards.”

The PhRMA submission “is basically a wish list of everything that PhRMA had demanded” in the Trans Pacific Partnership agreement, Sanjuan said. “They are now basically asking the U.S. government to pursue a similar agenda in the NAFTA renegotiation. “

“We just hope the U.S. government will not fall into this trap of basically agreeing to longer patents and other intellectual property monopolies for pharmaceutical companies because it would be devastating for public health,” Sanjuan said.

To contact the reporter on this story: Bronwyn Mixter in Washington at bmixter@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

For More Information

PhRMA's comments are at http://src.bna.com/pTF.

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