Issue link: http://clhia.uberflip.com/i/406567
20 The current model of using litigation of patents to allow access to generic drugs is a relatively costly approach that would benefit from fundamental reform. We understand that the Patent Act will be opened up for review over the medium-term and as part of this review we believe that the approach to issuing patents for brand prescription drugs should be reviewed and updated to reduce the need for generics to litigate in order to gain market access. In the interim, however, we recognize that the current system has some implicit disincentives for generic manufacturers to challenge patents which may be unnecessarily delaying the entry of new generics to market. For example, when a generic manufacturer is successful in its litigation (under regulations of the Patent Act) and is granted market authorization by Health Canada, the brand company can still sue the generic again on the same patent or patents under a separate legal action under the Patent Act. In addition, once a generic manufacturer has succeeded in its patent challenge, several other companies who did not incur any litigation costs are often also ready to enter the market, driving down the available market share for the patent challenger thus reducing their opportunity to recover legal costs and so reducing the incentive to challenge patents. Although the challenger is entitled to damages for being kept off the market during the patent challenge, the damage entitlement has been narrowly construed to prevent recovery of the challenger's actual losses. 12 In the U.S., this first mover disadvantage is addressed by providing a 180-day exclusivity period for the first generic company to successfully challenge a brand patent. This provides a six month period where the lead generic has exclusivity in the market and can recoup the costs of the legal challenge through market volume. If this were to be introduced in Canada the price of the generic would normally be regulated and therefore not subject to monopolistic pricing. 12 Tim Gilbert and Nathanial Lipkus, " The Social Value of the Pharmaceutical Patent Challenge : toward a better Canadian balance between innovation and access" GilbertsLaw.ca (March 2012)