Changes to USMCA abolish proposed extended data protection term for biologics

Last week, the Government of Canada signed an agreement to amend the United States-Mexico-Canada Agreement (USMCA). Once ratified and implemented, the amended USMCA will replace the North American Free Trade Agreement (NAFTA).

What you need to know

• Canada will no longer be required under the USMCA to extend the term of data protection for new biologic drugs from eight years to 10 years.
• Language was added to clarify that Canada’s current domestic laws relating to patents and data protection for pharmaceuticals comply with the USMCA.
• The amended USMCA still requires Canada to update its domestic laws relating to other types of intellectual property including trademarks, copyright and trade secrets.
• It will likely be several years before the changes set out in the amended USMCA are implemented in Canada.

The details

The initial version of the USMCA was signed by Canada, the U.S. and Mexico on November 30, 2018. The initial version required several changes to Canada’s intellectual property regime, including requiring the term of copyright protection to be extended to the life of the author plus 70 years, introducing a patent term adjustment mechanism, and requiring Canada to strengthen enforcement rights relating to counterfeit and pirated goods. One of the most significant changes to the pharmaceutical industry introduced by the initial version of the USMCA was that new biologic drugs were proposed to be entitled to a 10-year term of data protection instead of the current 8-year term to which they are entitled. See our previous bulletin here for more information on these anticipated changes.

On December 10, 2019, Canada signed an agreement amending the initial version of the USMCA. Most of the changes to Canada’s intellectual property regime introduced by the initial version of the USMCA remain the same. However, notably, there is no longer a requirement in the amended USMCA for Canada to extend the term of data protection for new biologic drugs from an 8-year term to a 10-year term. As a result, it is unlikely in the near term that Canada will increase its data protection term for biologics.

Other considerations

This amendment to the USMCA is one of the many key changes to Canada’s pharmaceutical regimes that have been announced this year. We have also seen the federal government introduce:

• changes to the Patented Medicines Regulations which will impact how the Patented Medicine Prices Review Board (PMPRB) monitors and controls the price of patented medicines in Canada (see here and here);
• steps towards implementing a national pharmacare plan (see here and here);
• proposed amendments to the Food and Drug Regulations that will make it easier for a generic drug manufacturer to bring a chemical variant of an existing innovator drug to market (see here); and
• proposed amendments to the Food and Drug Regulations that will improve access to unauthorized human drugs through the Special Access Program and unauthorized veterinary drugs through the Emergency Drug Release Program (see here).

In particular, PMPRB reform will continue to be a hot topic into 2020 as the PMPRB’s guidelines on implementation of the new regulations are finalized and drug manufacturers adjust to new reporting requirements and pricing tests.