Generic Prescription Drugs

Both in the United States and in Canada, generic drugs offer an alternative to high priced brand name medications. A generic drug is the bioequivalent of it's equivalent brand name drug. It is the same in terms of it's dosages, strength, safety, performance, quality, method of administration and intended use. In both countries, pharmaceutical companies can introduce generic forms of brand name medication onto the market once the patent held by the brand name drug expires, and their generic form receives approval from the required government bodies; the FDA in America, and Health Canada in Canada.

Generic drugs are generally sold at discounted prices compared to those of the brand name equivalents. In the U.S., it is estimated that generic drugs save American consumers between 8-10 billion dollars every year.

Pharmaceutical companies can apply for a generic drug's approval only after the patent for it's brand name equivalent expires.

Drug Patents

Patents are designed to encourage research and development, and innovation. A patent is intended to act as an incentive, the expectation being that a patent holder will reap rewards for innovation during a time period that it is protected from direct competition in the marketplace. A patent allows a company the exclusive right to manufacture, use or sell an invention for a set period of time. In the United States, patents are for a 20 year period. The time period for U.S. patents changed in 1995 as a result of the Uruguay Rounds Agreements Act. Prior to 1995, patents expired after 17 years. Drug patents issued after 1995 expire after 20 years. In Canada, patents have a 20 year life span. U.S. patents are issued by the Patent Trademark Office (PTO). In Canada, patents are issued by the Canadian Intellectual Property Office following the Canadian Drug Patent Act.

Most people recognize that drug patents are important. They are important in ensuring that drug companies have an incentive to research, develop and market safe, effective medications. It is fair that those companies spending billions of dollars developing new drug products have an opportunity to recoup those investments.

What many people don't agree about is an acceptable time period for the duration of a patent. They also protest a variety of additional rules and regulations that affect those interested in gaining approval for generic drugs. In both Canada and the U.S., developers of generic drugs feel they are unfairly restricted due to several regulations in their perspective countries.

In Canada, for example, the Canadian Generic Pharmaceutical Association is currently waging a battle against the ability of a brand name drug company to halt a generic drug's approval for 24 months simply for alleging, not proving, that the generic has violated it's patent. The Association alleges: "The delays caused by litigation under these special patent rules have already cost Canadians more than $1 billion in higher drug costs."
(CGPA Online Resources, 2004)

Similar challenges are faced by those seeking FDA approval for generic drugs in the U.S. As in Canada, it is alleged that brand name drug companies are both abusing the 30 month extension period allowed by the FDA, but also modifying only slightly and for little reason present brand name drugs so as to obtain a new, 20 year patent on the modified drug. In recent statements, President George Bush has resolved to close these loopholes in an effort to bring generic drugs to market faster. This move, in and of itself, indicates the extent to which lowering U.S. drug prices has become a politically expedient move.

The Solution?

Many believe that although brand name drug manufacturers must be provided with a period of exclusivity, that period should be only of a certain duration and should not be susceptible to unproven allegations brought forth by brand name manufacturers. How this issue plays out in the United States is of great interest to Canadians and other citizens worldwide. The reason for this is that U.S. pharmaceutical companies by far lead the pack in terms of new drug development. It is in no one's best interests to undermine the industries desire to research and develop potentially lifesaving medicines. However, some balance must be achieved so that American consumers are not forced to pay for the majority of this development.