The Pharmaceutical Intellectual Property and Competition Law Review: Canada


Canada is home to a robust and thriving pharmaceutical sector; Canadian pharmaceutical sales reached C$29.9 billion in 2019, representing a 35.3 per cent increase since 2011.2 Although there is every indication the pharmaceutical industry will continue to evolve and thrive, as we approach a post-covid-19 future, industry players must remain mindful of the nuances of regulatory, intellectual property (IP) and competition law aspects that will shape its future. While predominantly federally regulated, pharmaceutical products (including drug and biologic products and their subsequent entry counterparts) are also subject to a patchwork of provincial and territorial laws, such as pricing and reimbursement. This chapter focuses on the applicable federal laws, regulations and policies.

Legislative and regulatory framework

The provision of health products3 in Canada is regulated under the Food and Drugs Act (FDA) and its associated Regulations (FDR). Health Canada's Health Products and Food Branch (HPFB) is the federal agency responsible for regulating, evaluating and monitoring, among other things, the safety, efficacy, quality, approval and risks associated with the sale and use of health products in Canada.

To be sold and distributed in Canada, a drug product must be issued a Drug Identification Number (DIN)4 and a Notice of Compliance (NOC), which signifies compliance with the FDA and FDR. After approval, Health Canada continues to monitor post-marketing activity to ensure that drugs are safely used and marketed and are not advertised in a false or misleading manner. Health Canada's enforcement powers where a manufacturer is found to be in contravention of the FDA include fines and other sanctions, such as product recalls and seizures.

Once approved and issued an NOC, manufacturers typically make submissions to the various public and private drug plans seeking inclusion as a reimbursable drug on the basis of the drug's clinical- and cost-effectiveness, among other things. There are multiple public drug plans in Canada (referred to as formularies) that are administered by each province and territory, as well as at the federal level, that are governed by their own legislation directed to pricing and reimbursement criteria. Essentially, however, manufacturers can establish the list price for their drug products, with the exception of patented medicines, which are subject to the federal Patented Medicine Prices Review Board (PMPRB). The PMPRB's mandate is to ensure that drug products are not sold to a wholesaler, distributor, hospital or pharmacy at an excessive price (the PMPRB does not regulate retail-level sales, such as pharmacy-to-customer).

Manufacturers and each formulary negotiate a 'product listing agreement' (PLA), which, assuming the drug product is accepted for inclusion on the formulary, tends to result in the formulary paying an amount less than the list price. Because PLAs are confidential, there tends to be high variability between formularies, both in respect of the listing and pricing of the same product. Provinces may also select manufacturers to become exclusive suppliers of a formulary drug through a tendering process.

i Innovation incentives

By the time a drug product receives regulatory approval, manufacturers have invested significant time and resources towards its development and testing, not to mention the regulatory review process. To assist in compensating manufacturers for the lost 'on market' time, Canada has adopted two mechanisms – data protection and patent term extension – aimed at incentivising manufacturers to continue their investment, to encourage ongoing innovation, as well as to continue to offer innovative drug products in Canada.

Data protection

The FDR provide for the protection of undisclosed test or other data relevant to the safety and efficacy of drug products that contain a 'new chemical entity' (referred to as an 'innovative drug').5 'Innovative drugs' are subject to a guaranteed minimum of eight years of market exclusivity, with an additional period of six months with the submission of clinical data supporting paediatric use. In so doing, a subsequent entry manufacturer is prohibited from filing a drug submission making a direct or indirect comparison to the innovator's undisclosed data for the first six years of the eight-year period; and market approval cannot be granted before the end of the next two-year period.

Patent term extension

Further investment incentive is provided by the Certificate of Supplementary Protection (CSP) regime, which provides up to two additional years of patent-like protection for drug products protected by an eligible patent.6 To be eligible, a patent must be directed to a new medicinal ingredient or combination of medicinal ingredients, or their use or process for manufacture, that is contained in the drug product for which the marketing approval is issued. CSPs are granted by Health Canada's Office of Patented Medicine Liaison (OPML).7 A company must file a CSP application with OPML within 120 days of the later of the issuance of the NOC or the eligible patent.

ii Competition

By its nature, the pharmaceutical industry relies in part on market exclusivity incentives that inevitably impact competition. Ongoing expansion in the pharmaceutical sector, no doubt accelerated by the covid-19 pandemic, is also influencing the global and domestic competitive landscape through multi-jurisdictional mergers with potential impacts on competition. Canada is no exception to this, representing the ninth largest pharmaceuticals market in the world, with a 2.1 per cent share of the global market.8

Competition within the pharmaceutical industry in Canada is regulated by the federal Competition Act, which can be broadly divided into four main areas, all of which are relevant for the pharmaceutical sector:

  1. competitor collaborations, which includes both criminal regime for hard-core cartels and a civil regime for legitimate competitor collaborations such as joint R&D or commercialisation agreements;
  2. unilateral conduct (i.e., prohibitions on certain practices when they affect competition, such as tied selling, exclusive dealing and abuse of dominance);
  3. mergers; and
  4. deceptive marketing practices, as addressed in Section V.

The Competition Act also creates a statutory cause of action that permits private parties to claim damages for losses caused by breach of the criminal provisions or failure to abide by an order of the Competition Tribunal (Tribunal)9 or a court. Private parties may also bring an application with respect to certain non-criminal trade practices (e.g., tied selling, price maintenance) with leave of the Tribunal.

The Competition Bureau (Bureau), headed by the Commissioner of Competition (Commissioner), has placed the enforcement of competition laws in the pharmaceutical industry high on its list of enforcement priorities and provided useful guidance with respect to its enforcement approach through the Intellectual Property Enforcement Guidelines (IPEGs) and numerous position statements. The IPEGs describe the Bureau's analytical approach to fundamental competition law concepts such as market definition and market power and provide examples of how the Bureau may assess various practices, such as product switching and patent settlement agreements, that are common in the pharmaceutical industry.10

New drugs and biologics – approval, incentives and rights

i Drugs


In order to enter and remain on the market in Canada, drugs must be manufactured and distributed in accordance with the FDA and FDR. Drug manufacturers apply for an NOC via a New Drug Submission (NDS), which requires submission of, among other things, quality (comprised of chemistry and manufacturing information) and clinical data demonstrating the drug product's safety and effectiveness. If Health Canada is satisfied that a drug product meets all regulatory and clinical requirements, an NOC will be issued outlining the conditions of use in Canada, as well as a DIN. All aspects of a drug's life cycle post-approval are also subject to the FDA, FDR and Health Canada oversight, including the drug's distribution, marketing and labelling, and adverse event reporting.

Health Canada's published service guidelines indicate an aim to complete an NDS review within approximately 300 days from the receipt of a complete NDS.11 As of 1 April 2021, the associated cost for an NDS review is C$437,009.12

If an NDS is for the treatment, prevention or diagnosis of a serious, life-threatening or severely debilitating disease or condition, drug manufacturers may request an accelerated track to obtain market authorisation. A manufacturer may request either 'priority review', which expedites the review time to approximately 180 days13, or the issuance of an NOC 'with conditions' (NOC/c, based on a promise of clinical effectiveness pending the submission of further confirmatory clinical trial evidence), which requires approximately 200 days to complete.14 Both priority review options are available where no drug is presently marketed in Canada for the disease or condition targeted, and there exists a demonstration of significant clinical benefit.

While Canada does not have a review framework specific to orphan drugs, manufacturers of drugs for rare diseases may take advantage of either of these accelerated pathways. Also, these pathways have been successfully utilised in respect of the covid-19 pandemic, in that, Health Canada has provided a number of special emergency authorisations for covid-19-related drugs and vaccines.

Regulatory approval for a line extension or new indications to an approved drug product is sought on the basis of a Supplementary NDS (SNDS), which is targeted by Health Canada to be completed within 180 to 300 days from the date of their receipt of a complete submission, depending on the scope of the new information.15

Special access

In specific circumstances, Health Canada will permit the use and distribution of a drug through the Special Access Programme (SAP), which provides emergency access to drugs that are not available for sale in Canada for the treatment of serious or life-threatening conditions16. SAP is an access regime – not an approval regime – and is initiated by a request submitted by a healthcare practitioner (HCP) seeking access to a drug to treat a patient with a serious or life-threatening condition when conventional treatments have failed or are unsuitable. As a result of the covid-19 pandemic, Health Canada removed certain administrative barriers to the request process, making the SAP more accessible in times of emergency or in response to drug shortages.17

Protection upon NOC issuance

A drug product cannot be sold in Canada unless it has been issued an NOC. In order to be permitted to distribute, sell, offer to sell or import a drug product in Canada, additional licensing is required (such as establishment licensing) that is beyond the scope of this chapter.

As discussed above, once issued an NOC, first-entry drug products may qualify for data protection or patent term extension as a means of providing a time-limited period of market exclusivity.

Drug products tend to be protected by patents. A patent's 20-year period of exclusivity offers a preventative tool to stop others from making, using, or selling a product that utilises the invention. In this manner, patents are essential to incentivising ongoing innovation in the pharmaceutical industry. While patents are available in all industries, CSPs are unique to the pharmaceutical sector, and operate to provide a patent-like extension for eligible patents beyond the 20-year term to a maximum of two years.18 This provides a unique benefit to manufacturers of eligible drug products by providing, in essence, a longer patent term. Manufacturers may apply for a CSP with a fee of C$9,756. At the time of writing, 77 CSP applications have been submitted, of which 58 have been issued.19

In addition to CSPs, novel drug products are afforded data protection. Innovative drugs (being a drug product that contains a medicinal ingredient not previously approved in Canada) are afforded market exclusivity in Canada for six years, and protection over their undisclosed data, such as chemical and stability information and manufacturing practices, for an additional period of two years for a total of eight years.20 Such protections further shield against competing products, thereby allowing drug manufacturers an opportunity to recoup their investments.

ii Generic and follow-on pharmaceuticals

Generic drugs are approved in Canada on the basis of their pharmaceutical equivalence21 and bioequivalence22 to an approved drug that is marketed in Canada (referred to as the 'Canadian Reference Product', or CRP), as well as having the same route of administration and conditions of use.23 A generic drug is not required to contain the identical non-medicinal ingredients as the CRP. Essentially, a generic drug must have the same safety and efficacy profile as the CRP, which has previously been clinically established.

Typically, generic drugs obtain market authorisation on the basis of an Abbreviated New Drug Submission (ANDS). An ANDS does not require submission of non-clinical data (e.g., pharmacology, pharmacokinetics, toxicology) on the basis of reference to the data previously submitted for the CRP. Market authorisation of any line extensions or new indications in respect of a generic drug is submitted on the basis of a Supplementary ANDS (SANDS).

Health Canada aims to review an ANDS within approximately 180 days from the submission of a complete package. The fee for the review of the associated comparative studies is C$55,737.

Health Canada will not approve a generic drug until the expiry of the eight-year period of data protection in respect of its CRP. If the patent linkage regime is also applicable (as discussed in Section IV), Health Canada will not issue the NOC until exhaustion of the associated requirements of that regime, which once engaged, provides a statutory stay of up to 24 months. In this regard, generic manufacturers may choose to wait out this 24-month period; or alternatively, engage the patent linkage regime to challenge the validity of any applicable patent directed to the CRP, or demonstrate non-infringement (discussed more below).

Once a generic product is approved and issued an NOC, submissions are made to the public and private drug plans seeking inclusion as a reimbursable drug that is interchangeable with the CRP. Pricing of generic drug products tend to follow the pan-Canadian Tiered Pricing Framework24 that provides a uniform approach to generic drug pricing. Essentially, if one generic alternative is available, its pricing tends to be 75 per cent of that of the listed CRP (meaning that it is the subject of a PLA with that province) or 85 per cent if there is no PLA. If two generic products are available, the price drops to 50 per cent of that of the CRP. For three or more generic products, the price drop is more segregated, being 25 per cent of the CRP's price for oral or modified release dosage forms and 35 per cent for non-oral dosage forms.

The covid-19 pandemic has reopened debates as to the appropriate approach to ensure broad access to essential patented medicines. One mechanism available in Canada is prescribed in the Patent Act, whereby during an emergency period, the Patent Commissioner may grant to a competitor (typically a subsequent entry manufacturer) a compulsory non-exclusive, non-transferable licence to a patent for use domestically and also to facilitate access to pharmaceutical products for humanitarian purposes in developing countries.25 In these circumstances, subsequent entry manufacturers will be free to use the invention by manufacturing and distributing the patented drug product without threat of an infringement claim. While rarely utilised, one example where a compulsory licence was granted was in 2007, when generic manufacturer, Apotex Inc., obtained a compulsory licence to manufacture and export an HIV antiretroviral drug to Rwanda. As of the time of this writing, no other compulsory licence has been issued, despite the public health emergency caused by the covid-19 pandemic and the increased need for both covid-19 related drugs and vaccines, as well as drugs, generally, that experienced a shortage as a result of interrupted supply chains caused by the pandemic.

iii Biologics and biosimilars

Like pharmaceutical drug products, manufacturers of biologics must submit an NDS for review and approval demonstrating safety and efficacy with clinical information. The above-mentioned review timelines and fees are applicable to biologic applications, as are the patent and data protections (discussed in Section III.i). However there are significant differences in Health Canada's approach to biologic approvals, given important nuances in biologic products. Briefly, pharmaceutical drug products (discussed in Section III.i) are chemically synthesised and have smaller molecular structures (often referred to as 'small molecule drugs'). Biologics are produced in living organisms using advanced biotechnology, and are larger and more complex. Biologics are also more sensitive to changes in their environment and manufacturing processes, and therefore require more regulatory attention. As such, a biologic NDS requires more detailed chemistry and manufacturing information to demonstrate safety, and suitable purity and quality. Once approved, biologic drugs are listed in Schedule D of the FDA. Health Canada's Biologic and Radiopharmaceutical Drugs Directorate (BRDD)26 is responsible for reviewing biologic NDSs, and also offers and encourages pre-NDS consultations.27 The expedited pathways for review discussed above in Section III.i are also available for biologic NDSs. Finally, if a biologic is, or contains, a new organism not previously sold in Canada, it may need to be reviewed by Environment and Climate Change Canada under the Canadian Environmental Protection Act 1999.28 Manufacturers of such products will need to contact the New Substances Program's Environmental Assessment Unit prior to submitting an NDS.

Biologics are also subject to enhanced review programmes both pre- and post-approval, including on-site evaluations by BRDD to ensure that manufacturers consistently produce safe biologics. Another review programme is the Lot Release Program (LRP), which is a mechanism by which Health Canada ensures the quality, purity, and stability of each batch of biologics before being released to the market.29 The extent of the LRP review is based on the level of risk associated with the biologic. All biologics, no matter their risk level, require pre-approval LRP reviews to conduct clinical trials, and to demonstrate manufacturing consistency as part of the NDS. Once a biologic has been approved and issued an NOC, Health Canada will either review, or require notification of, each lot prior to being sold. Manufacturers of biologics designated to the highest risk level will need to submit samples to BRDD for testing and approval prior to the release of each lot, a process that takes roughly six weeks before receiving a formal release letter from BRDD. For biologics in the moderate risk level, manufacturers will need to submit testing protocols and await a release letter prior to selling each lot, a process that takes roughly two weeks. Finally, for lowest-risk biologics, no release letter is required, but manufactures must notify BRDD when a lot is to be sold in Canada. Importantly, biologics can move between risk-level groups based on testing history and adverse events. In addition to LRP reviews, manufacturers of biologics must submit a yearly biologic product report to the Office of Submissions and IP, reporting on adverse events attributable to product quality, product recalls, testing methods, and facility information.30

Biosimilars are regulated as new drugs, and must obtain market authorisation through the NDS pathway. Biosimilars are not generics as they do not contain the identical medicinal ingredient as their CRPs. Instead, biosimilars are highly similar, and not identical, to their reference biologic drugs (RBD). As such, biosimilar manufacturers must clearly identify the Canadian RBD in their NDS, and submit comparative studies showing no clinically meaningful differences in terms of safety, function, and efficacy.31

Like generic products, biosimilars must clear the patent linkage regime prior to issuance of an NOC.

Patent linkage

Canada first adopted a patent linkage regime in 1993 pursuant to the Patent Act. The Patented Medicines (Notice of Compliance) (PMNOC) Regulations bridge the gap between the two different regulatory systems – the patent acquisition and enforcement system provided by the Patent Act and the drug product approval system of the FDA and FDR. The PMNOC Regulations prevent the market approval of a subsequent entry drug (whether a generic pharmaceutical or biosimilar) where it would infringe an eligible patent that is directed to the originator's drug product. For the subsequent entry product to receive market approval, the subsequent entry manufacturer must establish that it does not infringe a valid patent that is relevant to the PMNOC Regulations (described below). In this manner, the subsequent entry manufacturer is provided with an opportunity to obtain its market approval in advance of patent (or CSP) expiry, provided that it establishes non-infringement. Moreover, the originator is notified of a subsequent entry (competitive) product submitted for market approval before that product enters the market and infringes relevant patents (including CSPs).

Not all patents that are directed to a drug product fall within the scope of the PMNOC Regulations. A patent that is eligible for listing on the Patent Register (being the public database maintained by Health Canada) pursuant to the PMNOC Regulations must correspond to the drug product and include a claim that covers the medicinal ingredient, its formulation or dosage form, or use.32 Ineligible patents include those directed to a process (method) to manufacture a drug product, or directed to metabolites, intermediate compounds, or different chemical forms of the active ingredient (e.g., esters, salts).33

Upon submitting an ANDS, the subsequent entry manufacturer must either accept that an NOC will not issue until the patent or patents listed on the Patent Register expire or deliver to the originator a Notice of Allegation (NOA) including a detailed statement.34 One of the purposes of the NOA is to provide the originator with notice of the grounds on which the subsequent entry manufacturer considers that no valid claim of a patent listed on the Patent Register would be infringed by the making, constructing, using or selling of the subsequent entry drug. In so doing, the NOA must address each of the listed patents by alleging:

  1. the originator does not own the patent, have an exclusive licence or the patent owner's consent to use the patent;
  2. the patent is ineligible for listing in the Patent Register; and
  3. the patent has expired, is invalid or will not be infringed.

The originator has a non-extendable 45 day period within which to assess the NOA and decide whether to respond and challenge the allegations.35 If it elects not to respond, Health Canada is free to issue the NOC to the subsequent entry manufacturer (assuming the regulatory review is complete).36 If the originator elects to respond, it must commence a court proceeding by filing a statement of claim with the Federal Court seeking a declaration that the making, constructing, using or selling of the subsequent entry drug product would infringe any patent that is the subject of the NOA. In addition to any patent referenced in the NOA, the originator may include within the scope of its action any other patent not listed on the Patent Register but otherwise relevant to the making, constructing, using or selling of the subsequent entry drug that is the subject of the NOA. Collectively, the patents that are the subject of an NOA and the other patents asserted by the originator are referred to here as the 'asserted patents.'

The court hearing the action must render its decision within 24 months of the date of the NOA (referred to as the statutory stay).37 The action is typically set down for a 10-day trial within 21 months of commencement to enable the decision to be rendered prior to the expiry of the statutory stay.38 If the originator is successful on any one of the asserted patents, Health Canada will be prohibited from issuing the NOC prior to the expiry of the asserted patents.39

If successful, the subsequent entry manufacturer may avail itself of a remedy that is unique to Canada's patent linkage regime, which in a sense, acts as a substitute for the first mover's (180-day) exclusivity that exists in the US. In this regard, the subsequent entry manufacturer may commence an action for compensation for any loss suffered, starting from the date upon which an NOC would have been issued but for the originator's action.40 The originator is liable for any loss suffered because of the delayed market entry of the subsequent entry product from the period beginning on the date on which an NOC would have been issued, in the absence of proceedings brought pursuant to the PMNOC Regulations.

Competition enforcers

The Competition Act is administered and enforced by the Commissioner, an independent public official elected for a five-year term, who heads the Bureau, a federal investigative and enforcement agency consisting of various operational branches. The Competition Act confers broad investigative and enforcement powers on the Commissioner. It allows the Commissioner to, among other things, commence formal inquiries, seek document productions, subpoenas and search warrants, and order wiretaps.

The Bureau investigates both criminal and civil matters, although in criminal cases, the Commissioner must refer the case to the Attorney General for Canada, who determines whether to prosecute it.

With respect to the pharmaceutical industry, in certain areas (e.g., deceptive marketing), the Bureau shares oversight with Health Canada, with the latter reviewing scientific accuracy and enforcing the standards set by the FDA, and the former addressing claims that are materially false or misleading. For example, in March 2020, the Bureau took legal action to stop a natural health product manufacturer from making weight loss and fat burning claims on certain natural health products after it did not furnish testing data upon the Bureau's request.41

The Bureau has also continued to update the IPEGs, with the last update published in March 2019 reflecting recent jurisprudence on abuse of dominance in matters concerning IP, and changes to the PMNOC Regulations42. While the Bureau has routinely recognised the importance of IP in advancing innovation, it has also consistently emphasised (through the IPEGs) its willingness to conduct investigations of possibly anticompetitive acts involving IP.

Merger control

The Competition Act defines a 'merger' broadly to include a direct or indirect acquisition or establishment of 'control over or significant interest in' all or part of a business by any means, including an acquisition of shares or assets, amalgamation or combination.43 Notably, this definition is not limited to Canadian businesses, and therefore foreign transactions involving Canadian entities may trigger review by the Bureau.

The Competition Act contains both substantive merger provisions and pre-merger notification provisions, which apply independently of each other. Even if a transaction raises no substantive competition issues, if it meets certain prescribed financial and (in the case of share acquisitions) ownership thresholds, parties must comply with the filing and waiting period requirements of the pre-merger notification provisions. Conversely, a merger that is not subject to the notification requirements may still be reviewed, and possibly challenged if it raises a substantive competition issue.

While most pharmaceutical mergers have been cleared with no objection, there have been a few notable transactions that received Bureau scrutiny and highlighted the Bureau's approach to determining product and geographic markets in the pharmaceutical sector. This approach has included looking at disease prevalence, competitor sophistication in managing regulatory requirements, and drug substitutability based on properties that influence efficacy and administration, such as dosage form and molecular characteristics. For example, in April 2016, the Bureau ordered divestitures in connection with a proposed transaction between two global generic drug manufacturers, as there were very few generic alternatives in the relevant treatment markets (cystic fibrosis and opioid dependence).44 During the review process, the Bureau consulted confidentially with competing drug developers to understand the status of their drug approval processes (as this is non-public information), the anticipated timing of their entry, and their chances of success based on their experience with regulatory approvals. Similarly, a more recent merger proposal in 2020 between two global animal health product suppliers ended in a consent agreement requiring divestitures. While the transaction concerned veterinary health, the factors the Bureau considered (e.g., pricing negotiations, costs, timelines of drug development) are also applicable to human pharmaceutical products.45

Due to the global nature of the pharmaceutical industry, the Bureau may rely on foreign antitrust regulators' assessment or conditions imposed when evaluating the Canadian dimensions of a transaction. This was the case in a 2015 review of a transaction between three global pharmaceutical companies, where the Bureau worked closely with its US and European counterparts, and allowed the transaction to proceed in Canada on the basis of a US consent agreement.46 The Bureau recently joined an international working group with the US, UK and EU competition authorities dedicated to developing and harmonising approaches to pharmaceutical merger review in light of the rapidly changing drug development and manufacturing strategies, which should result in further streamlining and harmonisation of the enforcement approach. Factors the working group will consider include the impact of mergers on pharmaceutical innovation, the types of evidence required for review, and revisiting the current theories of anticompetitive harm in the context of the pharmaceutical industry.47

In addition to the merger control regime, acquisitions of control of Canadian businesses by foreign purchasers will attract the Canadian foreign investment regime, which contains both economic net benefit and national security provisions. During the pandemic, the Canadian government increased its scrutiny of foreign investments in the pharmaceutical industry and other critical sectors impacting the health and safety of Canadians, in an effort to protect domestic access to essential goods and to onshore Canadian manufacturing and supply.48

Anticompetitive behaviour

Potentially anticompetitive behaviour in any industry, including the pharmaceutical sector, may be reviewed under a number of civil reviewable provisions of the Competition Act, with abuse of dominance being among the most frequently used. While the mere exercise of IP rights is not, in itself, anticompetitive, the Competition Act could be engaged if certain behaviours stemming from IP ownership result in a substantial prevention or lessening of competition. Over the years, the Bureau has conducted a number of investigations into various pharmaceutical practices, starting with the public investigation in 2012 of a pharmaceutical company that swapped its prescription drug treatment of conjunctivitis that was nearing the end of its patent for a second generation formulation of the same drug that would be protected under a new patent for another 10 years, (a practice known as 'product switching' or 'product hopping')49. Soon after the Bureau began its investigation, the company resumed supply of its original drug and the Bureau discontinued its investigation in 2014.50

Since then, the Bureau has also looked into a number of other practices, including patent settlement agreements between originator and generic competitors that would delay generic entry (a practice known as 'pay for delay'), supplying a drug indicated for multiple conditions for free or near-free prices to patients and hospitals, offering increased rebates to public and private insurers following the market entry of the biosimilar and refusal by originator companies to supply the generic manufacturer with samples of the CRP, required to conduct bioequivalence testing, resulting in the delay of the biosimilar's market entry. The Bureau discontinued many of these investigations upon concluding that the required elements of an abuse of dominance were not met or due to a discontinuance of the conduct. The Bureau's published position statements have provided many useful insights into its analytical approach in this area, including a strongly worded public statement in 2020 in connection with its investigations into a refusal to provide CRPs. The Bureau indicated it would not tolerate such conduct and would be prepared to conduct further enforcement action seeking an order for financial penalties (violations of abuse of dominance provisions are subject to administrative monetary penalties of up to C$10 million for a first order, and C$15 million for a subsequent order).51

Finally, the Bureau has also addressed off-label usage of vaccines and therapies.52 In 2019, the Bureau initiated an investigation into a vaccine manufacturer's attempt to restrict the off-label use of its vaccine in a procurement contract for a provincial public immunisation programme, which would have restricted public health authorities' ability to reduce the dosage (and therefore supply) of the vaccine, or to use it in combination with a competitor product. While the vaccine manufacturer did not ultimately impose these restrictions, the Bureau stated its intention to take appropriate actions in the event a manufacturer attempts similar conduct in the future.53

Outlook and conclusions

As the world looks towards a post-covid-19 reality, and attention returns to longer-term industry dynamics and trends, the interface between IP and competition law will be increasingly important in shaping the evolution of the Canadian pharmaceutical industry as a whole. For instance, the United States recently introduced a policy to apply increased merger review in this sector in order to protect competition, specifically targeting drug product pricing, hospital consolidation and insurance, including the safe importation of drugs from Canada. It remains to be seen whether Canadians may expect similar measures. With a heightened focus on safeguarding and on-shoring Canadian manufacturing and R&D, the Canadian government continues to promote significant protections to pharmaceutical IP rights and healthy competition to ensure the development of, and Canadians' cost-effective access to, essential drug products. Canadian competition policy, meanwhile, continues to prioritise the pharmaceutical industry as a sector of key importance to the Canadian economy, and the Bureau maintains a highly visible role as an active and responsive enforcement agency that is constantly adapting to industry change.


1 Kamleh Nicola, Arlan Gates and Yana Ermak are partners, and Shira Sasson is an associate at Baker McKenzie.

2 Government of Canada's Pharmaceutical industry profile (last updated 9 April 2021),

3 'Health products' that are within Health Canada's mandate include drugs, biologics, medical devices and natural health products.

4 A DIN is a unique eight-digit identifier that denotes a specific active ingredient and strength, form, route of administration, and other drug identifiers. The DIN must be included on all product labelling.

5 FDR, Section C.08.004.1; see also Health Canada's Guidance Document: Data Protection Under C.08.004.1 of the Food and Drug Regulations (last updated 8 April 2021). An innovative drug is one that contains a medicinal ingredient not previously approved in Canada and is not a variation of a previously approved medicinal ingredient, such as a salt, ester, enantiomer, solvate or polymorph.

6 Patents are issued by the Canadian Intellectual Property Office (CIPO) and in accordance with Canada's Patent Act for a term of 20 years.

7 Patent Act, Subsections 113–125 (in force in 2017) and applicable CSP Regulations; see also Health Canada's Guidance Document: Certificates of Supplementary Protection (last updated 29 December 2020),, and Health Canada's Register of CSP and Applications,

8 Compound annual growth has remained positive at 5.1 per cent since 2015. Government of Canada's Pharmaceutical industry profile (last updated 9 April 2021), available online:

9 The Tribunal is a specialised, quasi-judicial body consisting of judicial and lay members, with the same powers as a superior court in charge of adjudicating civil reviewable matters.

10 The IPEGs are not binding on either the Tribunal or the Commissioner, but nonetheless give a useful perspective into the analytical approach the Bureau will take when assessing anticompetitive conduct involving IP.

13 Health Canada's 'Guidance for Industry: Priority Review of Drug Submissions' (last updated 18 December 2008),

14 Health Canada's 'Guidance Document: Notice of Compliance with Conditions' (NOC/c) (last updated 16 September 2016),

16 FDR, ss. C.08.010 & C.08.011; also see Health Canada's 'Special Access Programs: Request a Drug' (last updated 30 December 2020), available online:

17 Canada Gazette, 'Regulations Amending Certain Regulations Made Under the Food and Drugs Act (Sale of a New Drug for Emergency Treatment): SOR/2020-212' (28 September 2020),

19 Health Canada's 'Register of Certificates of Supplementary Protection and Applications' (last updated 24 June 2021),

20 FDR, Section C.08.004.1.

21 Pursuant to FDR, Section C.08.001.1, 'pharmaceutical equivalence' applies to a drug that contains the identical amount of the identical medicinal ingredient or ingredients. See also Health Canada's Policy: Interpretation of 'Identical Medicinal Ingredients'.

22 'Bioequivalence' is defined as a high degree of similarity in the bioavailabilities of two drug products, in this case, being a generic drug and a CRP. See e.g., Health Canada's 'Guidance Document: Conduct and Analysis of Comparative Bioavailability Studies' (last updated: 1 September 2018),

23 FDR, Subsections C.08.001.1 and C.08.002(1).

25 Patent Act, Sections 19 and 20.1.

26 Previously referred to as Biologics and Genetic Therapies Directorate.

27 Health Canada's Regulatory roadmap for biologic (Schedule D) drugs in Canada (last updated 21 June 2021),

28 Canadian Environmental Protection Act 1999; also see Government of Canada's New substances: Living organisms (last updated 18 March 2021),

29 FDR, Section C.04.015; also see Health Canada's Regulatory roadmap for biologic (Schedule D) drugs in Canada (last updated 21 June 2021),

32 PMNOC Regulations, Section 4.

33 Health Canada's Guidance Document: Patented Medicines (Notice of Compliance) Regulations (last updated 8 April 2021),

34 PMNOC Regulations, Section 5.

35 PMNOC Regulations, Section 6.

36 PMNOC Regulations, Section 7.

37 PMNOC Regulations, Section 7(1)(d).

38 A judge alone hears and determines PMNOC trials, which are conducted before the Federal Court of Canada. Jury trials are not available.

39 The court may also order any other remedy that is available under the Patent Act, or at law or in equity in respect of patent infringement.

40 PMNOC Regulations, Section 8.

41 Competition Bureau, 'Competition Bureau protects consumers from the potential harm of NuvoCare's weight loss claims' (13 May 2020),

42 The Federal Court of Appeal in Toronto Real Estate Board v. Commissioner of Competition, 2017 FCA 236 (TREB) affirmed that anticompetitive conditions placed on IP usage by the IP holder can constitute an abuse of dominance; the PMNOC Regulations were amended in 2017 to remove certain procedures that the Bureau would have otherwise considered in applying the IPEGs.

43 Competition Act, Section 91.

44 Competition Bureau's 'Statement regarding Teva's acquisition of Allergan's generic pharmaceuticals business' (18 April 2016), available online:

45 Competition Bureau's 'Statement regarding the acquisition by Elanco of Bayer Animal Health' (14 July 2020), available online:

46 Competition Bureau's 'Statement regarding the three-part inter-conditional transaction between GlaxoSmithKline plc and Novartis AG involving their consumer healthcare, vaccines and oncology businesses' (23 February 2015),

47 Competition Bureau, 'Competition Bureau joins multilateral working group on analysis of pharmaceutical mergers' (16 March 2021),

48 Government of Canada's Policy Statement on Foreign Investment Review and COVID-19 (18 April 2020),

49 'Product switching' is where a brand-name pharmaceutical company replaces a marketed drug product nearing the end of its patent with a new version of the drug product under a new patent, but with limited therapeutic advantage over the original drug product. This practice would delay the entry of a generic competitor.

50 Competition Bureau's 'Statement regarding the inquiry into alleged anti-competitive conduct by Alcon Canada Inc' (5 November 2015),

51 'Competition Bureau warns pharmaceutical industry that any further obstruction to the manufacture of generic alternatives will not be tolerated' (2 April 2020), news/2020/04/competition-bureau-warns-pharmaceutical-industry-that-any-further-obstruction-
to-the-manufacture-of-generic-alternatives-will-not-be-tolerated.html. Also see Competition Bureau's 'Statement Regarding Its Investigation into Alleged Practices of Celgene, Pfizer, Sanofi' (20 December 2018),

52 'Off-label' use refers to usage of a pharmaceutical product in a condition, dosage or population that was not specifically approved by Health Canada. Drugs tend to produce beneficial effects on an array of conditions beyond what was initially approved, and as such, health practitioners and public health authorities are allowed to study the safety and efficacy of these drugs in alternative scenarios, and to prescribe them accordingly.

53 Competition Bureau's 'Statement regarding off-label use of vaccines' (19 July 2019),

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