Canadian Lawmakers Introduce Amendments to Bill That Would Allow Manufacture of Generic Drugs for Africa

Canadian lawmakers on Tuesday introduced to Parliament amendments to a generic drug bill (C-9) that would effectively remove provisions that would have allowed brand-name drug makers to fill drug shipment deals originally negotiated by generic drug firms, Toronto's Globe and Mail reports (Chase, Globe and Mail, 4/21). The legislation, which originally was introduced in the House of Commons in November 2003, would amend the country's patent laws to allow drug makers to manufacture and export generic versions of patented drugs -- including antiretroviral drugs -- to developing countries. Under the measure, about 50 countries would be eligible to receive generic drugs at a fraction of the prices charged in Canada. The bill also calls for special markings on and packaging for the generic drugs sold as part of the program to prevent them from being sold on the black market or reimported to Canada. In addition, the bill has a "right of first refusal" clause that would provide a patent-holding drug maker 30 days to determine if it will fulfill contracts with the same terms negotiated by a generic drug maker (Kaiser Daily HIV/AIDS Report, 3/15). The amendments would remove the right of first refusal clause but would add "strict limits" to the "price and profit" of generic drug contracts, the Toronto Star reports (Delacourt, Toronto Star, 4/20). Canadian lawmakers also introduced an amendment to the generic drug bill that would allow brand-name drug companies to file lawsuits against generic companies if they believe a supply contract for developing countries is "too 'commercial' in nature," the Globe and Mail reports (Globe and Mail, 4/21). Brand-name drug companies could "tie up" generic firms in court by claiming that they are charging prices higher than 25% of the patent-holders' Canadian price, the CP/Canada.com reports.

Far Enough?
Some nongovernmental groups said that the amendments do not "go far enough" and called for the removal of a provision requiring lists detailing which drugs could be imported by which countries, according to the CP/Canada.com. Gauri Sreenivasan of the Canadian Council for International Cooperation said, "The bill is better with these amendments but it's not satisfactory" (Bailey, CP/Canada.com, 4/20). Richard Elliott, director of legal research and policy for the Canadian HIV/AIDS Legal Network, said that the lawsuit provision is "further invitation to abusive litigation by patent-holders with a view to dissuading generic manufacturers from entering the field." Jim Keon, president of the Canadian Generic Pharmaceutical Association, said, "Given the track record of this industry ... putting in provisions that encourage brand-name companies to litigate is not a wise move." He added, "It is unlikely a generic company would spend the time and money fighting brands in court." However, Terry McCool, vice president of corporate affairs with brand-name drug maker Eli Lilly Canada, said, "I don't think you are going to see that litigation at all" (Globe and Mail, 4/21). The bill and its amendments are being considered by a House of Commons standing committee and could be ready for a reading before the full Parliament by next week, the CP/Canada.com reports (CP/Canada.com, 4/20).

Reaction
"Governments have been known to do the right thing from time to time, and this is one of those times, I guess," Elliott said, adding that the amendments do not "entirely leve[l] the field between patent and generic" drug companies, the Star reports. He said that his group would "like to see [the price and profit limits for generic contracts] gone ... before this bill is passed." Irish rock star Bono, co-founder of the debt, AIDS and trade advocacy group DATA, on Monday spoke with Canadian Prime Minister Paul Martin to express his approval of the right of first refusal provision's removal, according to the Star (Toronto Star, 4/20). DATA Executive Director Jamie Drummond said in a March 10 letter to Martin that the measure would set a "poor precedent for the world" unless it was altered to remove provisions that would benefit brand-name drug makers. Bono also sent a letter to Martin stating his concerns about the bill (Kaiser Daily HIV/AIDS Report, 3/15). Bono said in a statement, "This kind of thing keeps Canada in the lead. This is a real breakthrough and shows real political guts from Paul Martin" (CP/Winnipeg Free Press, 4/21).

Toronto Star Editorial
The proposed amendment to remove the right of first refusal provision from the generic drug bill will "radically improve" the legislation, a Star editorial says. However, the measure "could be better," the editorial says, adding that Canadian lawmakers "[i]nexplicably" have included an "unhelpful twist" that would allow brand-name drug firms to sue generic drug companies. The Star says that Parliament should "axe this provision if there's a risk it could impede the flow of cheap drugs." The provision limiting which countries can purchase which drugs "should also be erased," according to the editorial. Once these changes are made, Parliament "should speedily pass [the bill] into law so Canada can lead the world in providing cheap generic drugs to desperate countries," the Star says (Toronto Star, 4/21).

Back to other news for April 21, 2004