As we reported, Canada has joined a new trilateral trade deal called the United States-Mexico-Canada Agreement (USMCA). The USMCA contains important new protections for biologic and other pharmaceutical innovation. Chief among them, Canada will introduce an extended ten-year period of data protection for biologics and patent-term restoration (PTR) for delays in the patent office.
The USMCA, which replaces the North American Free Trade Agreement (NAFTA), will come into force after it has been signed and ratified by the member states. It is anticipated that the USMCA will be signed before the end of 2018, but dates for its ratification and the NAFTA’s expiry have yet to be determined.
Extended data protection for biologics
Ten years of protection… Article 20.F.14 of the USMCA requires parties to provide new biologics with a minimum of ten years’ data protection from the date of first marketing authorisation. This period is greater than the eight years currently provided by Canada for biologics (together with all other pharmaceuticals), but less than the twelve years already provided for biologics by the U.S. under the Biologics Price Competition and Innovation Act.
…for new biologics. The USMCA obligations regarding extended data protection apply to new pharmaceutical products that are or contain biologics. The scope of this obligation is defined by the following:
- New pharmaceutical products are defined to be those that do not contain a chemical entity that has been previously approved in that party.
- The USMCA does not include a definition of “biologic” per se, but provides that each Party shall apply this Article to, at a minimum, a product that is produced using biotechnology processes and that is, or, alternatively, contains, a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein, or analogous product, for use in human beings for the prevention, treatment, or cure of a disease or condition.
- Parties are not required to apply this provision to biosimilars.
Coming into force. Pursuant to the transitional provision, Canada is not required to fully implement Article 20.F.14 until five years after the date that the USMCA comes into force.
PTR for all. Article 20.F.9 of the USMCA requires Canada to adopt a PTR system for time lost due to “unreasonable delays” in the issuance of a patent, at the request of the applicant. This new PTR system is not specific to pharmaceuticals, applying to all patents generally. PTR granted under this system will be additional to any certificate of supplementary protection (CSP) that may be available for pharmaceutical patents under existing Canadian law.
What is an “unreasonable delay”? The definition of “unreasonable delay” in the USMCA is non-exhaustive, but includes at least patent issuance after the later of: (1) more than five years from the filing date in the party country; or (2) more than three years after a request for examination. In determining the duration of a delay, periods of time may be excluded, e.g., if they are attributable to the patent applicant.
Coming into force. Pursuant to the transitional provision, Canada is not required to fully implement Article 20.F.9 until 4.5 years after the date that the USMCA comes into force. PTR applies to all patent applications filed after the date of entry into force of the USMCA, or the date two years after the signing of the USMCA, whichever is later for that party.
Other IP provisions. Chapter 20 of the USMCA contains other provisions relating to the protection of intellectual property, similar to pre-existing obligations under the NATFA and/or the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and/or that are already reflected in Canadian law.
Other provisions regarding pharmaceuticals and medical devices. In addition, Annex 12F and Chapter 29, Section B, contain articles related to the administration of the drug-regulatory system, including issues of transparency and procedural fairness.
Investor-state dispute-resolution system (ISDS). Notably, Canada has withdrawn from the ISDS under the USMCA. You can read our summary of the changes to the ISDS and transitional provisions here.
- Other NRFC publications on the USMCA:
- “NAFTA rebranded and updated: maintaining, protecting and preserving free trade” (Erin Brown: 2 October 2018)
- “Major changes for investor-state dispute settlement in new United States-Mexico-Canada Agreement” (Martin J. Valasek, Alison G. FitzGerald, & Jenna Anne de Jong: 2 October 2018)
- Complete text of the United States-Mexico-Canada Agreement, subject to legal review for accuracy, clarity, and consistency and subject to language authentication (Office of the United States Trade Representative); key chapters for pharmaceuticals: