Absence of a Canadian patent leaves the PMPRB powerless to control the price of Cystadrops

While the Patented Medicines Prices Review Board (“the PMPRB”) polices the prices of patented medicines in Canada, a recent article in The Globe and Mail suggested that a loophole may exist for drug manufacturers that have chosen not to acquire Canadian patent protection.

Cystadrops, a cysteamine hydrochloride-based eye drops formulation is produced by Recordati Rare Diseases Inc. (“Recordati”), and is used to treat a rare disease known as cystinosis. Cystinosis is characterized by the abnormal accumulation of the amino acid cystine in various organs of the body, including crystal build up in the eyes. While about one hundred Canadians suffer from cystinosis, the cost for a year’s supply of Cystadrops is approximately $111,000 per individual.

This price is largely due to the fact that Cystadrops does not fall within the jurisdiction of the Canadian federal regulatory body for medicines pricing. As Recordati chose not to obtain a Canadian patent for its formulation, any price regulation for Cystadrops by the PMPRB would be ultra vires. Compounding pharmacies in Canada largely stopped making cheaper versions of the drug when Recordati’s version was given the green light by Health Canada.

Another interesting aspect to note is that typically data privacy regimes provide innovative drugs with a data protection period of eight or eight and a half years, during the first 6 of which a (typically generic) manufacturer seeking a Notice of Compliance (“NOC”) will be prevented from filing its drug submission.

A search of the Register of Innovative Drugs has revealed that while there is no active data protection over Cystadrops, a related formulation of cysteamine bitartrate is protected and is associated with another company. Whether any patent or NOC links exist between the two formulations, or another third party for that matter, remains unclear. Furthermore, perhaps the very small market of just one hundred people acts a natural barrier to entry for generics or compounding pharmacies to invest in preparing the formulation.

With drug pricing regulations already being a contentious issue in Canada, it will certainly be of interest to see how this particular situation will develop, or if more information will be brought to light. In any case, as a result of the price of Cystadrops, Ontario became the first province to fund the drug, with other provinces expected to follow suit.


For more information please contact:

Osman Ismaili, Associate Lawyer
T: 613.801.1054
E: oismaili@mbm.com

This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.

Common Patent Misconceptions – Myth #1

This article is part of a series on commonly held misconceptions about patents. Many prospective patentees often have unfounded reservations about patenting their inventions. The aim of this series of short articles is to debunk these common myths around patent protection.

Patent Myth #1: Even if I file and register a patent, some giant company could still infringe it and would probably win in court if I sued them.
First and foremost, the likelihood of a patent ending up in court is very low. Economic studies (http://faculty.haas.berkeley.edu/shapiro/patents.pdf) have shown that of the total number of patents that are issued every year, only about 1.5% of them are ever litigated, and that only about 0.1% of them are ever litigated to trial. The association between patents and litigation in the minds of the public is likely a result of the relatively more recent patent troll cases, and the disproportionately high media coverage they have received.

If the statistics aren’t enough, businesses and startups should also keep in mind that the laws and regulations in place will not likely allow a smaller company to be unfairly steamrolled in court by a much larger infringer. A good example of this is the case of Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. 91 (2011), where the Supreme Court of the United States (“SCOTUS”) unanimously upheld a $290 million award against the tech giant Microsoft in a case brought by a Canadian software startup, i4i Limited Partnership (“i4i”). The Toronto-based i4i had alleged that a version of Microsoft Word had infringed its patented method for editing documents.

While litigation can certainly be expensive, and while Microsoft did have much deeper pockets than i4i, the SCOTUS decision, and indeed the lower courts, agreed that Microsoft had willfully violated i4i’s patent rights and that i4i was due compensation for that infringement.

A key take away from the above example is that the success of i4i would never have been possible had they not acquired patent protection for their invention. Without their patent, Microsoft would have been freely able to use the technology, with any recourse for i4i being highly unlikely.

If you are considering obtaining patent protection or have questions relating to patent protection, please feel free to reach out to MBM for a free consultation.


For more information please contact:

Osman Ismaili, Associate Lawyer
T: 613.801.1054
E: oismaili@mbm.com
This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.