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‘IN CIPRO WE TRUST’: BUT HOW DO WE FEEL

ABOUT OUR DRUG PATENT LAWS?

Harvard Law School

Peter Barton Hutt

May 17, 2002

LL.M./Food and Drug Law Paper

Submitted by: Daniela Bassan

ID #: 405 5335 50 58

TABLE OF CONTENTS










I. INTRODUCTION


Nothing weakens our faith in the sanctity of intellectual property like a little bioterror. After anthrax started killing Americans, the Bush administration put the arm on Bayer to provide Cipro, the best-known treatment, on the cheap, lest the company’s patent be abrogated. [1]

Allan Rock: The scariest thing about the [Canadian] Health Minister is that when he miscalculates...he miscalculates big. ...Mr. Rock claimed that Bayer, the maker of the patented anti-anthrax drug Cipro, couldn’t supply enough of the drug to meet the government’s requirements. So he decided to break the Patent Act and award a contract to generic drug maker Apotex to make a Cipro knockoff. [2]

In many ways, the terrorist attacks of September 11, 2001, crystallized national debate over drug patents—both in Canada and the United States. This became clear when, at the height of the anthrax attacks in October, NBC’s Tom Brokaw paid the following homage to the top anti-anthrax drug: “In Cipro we trust.” [3]

On the one hand, the public was eternally grateful for the research and development that led to the patented, life-saving CIPRO. On the other, the Canadian and United States governments insisted on obtaining national stockpiles of the drug at much-reduced prices. In fact, these conflicting attitudes toward CIPRO revealed a greater reality. Competing policy objectives—providing incentives for pharmaceutical innovation while ensuring timely access to affordable medicines—are the raison d’être of many drug patent regimes, including those in Canada and the United States. Legislators and regulators alike keep searching for the best balance between these conflicting goals.

This paper explores these issues through a comparative study of Canadian and United States drug patent regimes. Part II is an overview of the legislative and regulatory framework currently in place in both jurisdictions. In at least one significant respect, the regimes in Canada and the United States are unique, vis-à-vis the rest of the world. Pursuant to complex procedures, a drug patentee is entitled to an automatic injunction against a proposed generic competitor. Parts III and IV consider how these drug patent rules have played out in the case of CIPRO—both before and after September 11, again in Canada and the United States. The purpose of the CIPRO case study is twofold: (1) to show how legal incentives provided to drug manufacturers can be misused, leading to possible anticompetitive outcomes; and (2) to demonstrate how current laws may not adequately address the new, suddenly pressing objective of bioterrorism defense. Finally, Part V looks at pending legislation directed at readjusting the balance between pharmaceutical innovation and generic competition.

II. DRUG PATENT REGIMES

A. Pharmaceutical Market

A general overview of the pharmaceutical market is key to understanding drug patent laws in Canada and the United States.

The principal actors in the drug manufacturing business are originators and generic drug manufacturers. An originator (also known as a brand-name manufacturer or innovator) sells the original brand of a drug which is the subject of patent protection and the fruit of costly research and development (“originator drug”). Originator drug development can take an average of 15 years, from the earliest testing on the drug to final marketing approval. [4] Health and safety requirements are met by conducting original clinical testing on the patented drug. Originator drug patents include: (1) product patents that cover the active ingredient or compound in a drug; (2) process patents that cover a process for manufacturing a drug; (3) method-of-use patents that relate to a particular method of using a drug; and (4) formulation patents that cover both the active and inactive ingredients in a drug (e.g. a final dosage form tablet or capsule).

Once a drug patent expires, generic competition is available. A generic drug manufacturer sells a second or subsequent brand of a drug which is less expensive but therapeutically equivalent to the original brand (“generic drug”). [5] Generic drug development can take three to five years, from initial product development to final marketing approval. However, strategies about market opportunities may commence seven years before patent expiry. [6] Health and safety approval is based on tests showing that the generic drug is equivalent to the original brand of the drug.

In terms of general statistical data, a study by the Congressional Budget Office concluded that, in 1994, consumers in the United States saved between $8 to $10 billion by purchasing the generic versions of drugs at retail pharmacies. [7] In 1996, 43% of prescription drugs sold in the United States were generic drugs. [8] When one to ten generic manufacturers are competing with an off-patent drug, the average price of the generic drug is about 60% of the price of the original brand. [9] In 2000, pharmaceutical sales in the United States exceeded $138 billion, with generic drugs making up less than 10% of the total amount. [10] In the next four years, originator drugs with over $20 billion are scheduled to lose their patent protection. [11]

In Canada, in 1999, total pharmaceutical sales were about $6 billion. [12] Generic drugs made up about 40% of all prescriptions filled and about $800 million of the total sales. [13] Canadians save about $800 million annually by purchasing generic versions of originator drugs. [14] Since 1996, the share of prescriptions filled with generic drugs rose by 0.8% while the share of total dollar values declined by 0.8%. [15] Over the next four to nine years, originator drugs with sales over $800 million are scheduled to lose patent protection. [16]

B. United States

In order to “introduce or deliver for introduction into interstate commerce any new drug,” [17] a person is required to obtain premarketing approval from the Food and Drug Administration (FDA). [18] To obtain FDA approval, all new drugs must meet the health and safety requirements set out in the Federal Food, Drug, and Cosmetic Act. [19] As well, new drugs must satisfy unique patent requirements set out in the same statute. An overview of the legislative history of these provisions is set out below.

1. Federal Food, Drug, and Cosmetic Act

The Federal Food, Drug, and Cosmetic Act of 1938 [20] introduced a scheme of premarket review for new drugs. A new drug application (NDA) [21] had to be filed with the FDA. The NDA providing premarket notification of all original testing of the new drug, including safety testing. If the testing failed to demonstrate that the new drug was safe, the FDA could disapprove the product thereby preventing its marketing. In the absence of such disapproval by the FDA, an NDA automatically took effect. [22]

Pursuant to the Drug Amendments of 1962, [23] the premarket review of new drugs became more rigorous as follows: (1) a successful NDA required an affirmative act of approval by the FDA; (2) the testing of a new drug had to demonstrate not only the safety of the product but also its effectiveness ; [24] and (3) all NDAs that had come into effect between 1938 and 1962 had to be reviewed by the FDA to determine whether the new requirement of effectiveness was met. [25]

In implementing the 1962 amendments, the FDA adopted a number of policies. First, the FDA created the Drug Efficacy Study Implementation (DESI) program. [26] This program reviewed pre-1962, originator drugs to determine whether they were both safe and effective. Second, the FDA created an abbreviated approval process for certain generic drugs. Specifically, a manufacturer could obtain approval for a generic drug by showing it was equivalent to a DESI-reviewed drug (i.e. a safe and effective, pre-1962, originator drug). [27] By filing an abbreviated new drug application (ANDA), [28] a generic manufacturer did not have to conduct its own clinical tests for safety and effectiveness purposes. Rather, the generic manufacturer could conduct less costly investigations for bioequivalence [29] and bioavailability [30] purposes.

For post-1962 drugs, all manufacturers had to rely on original clinical tests demonstrating the safety and effectiveness of their products. [31] A manufacturer could conduct its own clinical tests and include the data in an NDA; alternatively, a manufacturer could rely on published reports of clinical investigations and include the data in a “paper NDA.” [32]

As a result of the foregoing, as of 1984, the Federal Food, Drug, and Cosmetic Act permitted the following new drug applications:

2. Hatch-Waxman Act

The Drug Price Competition and Patent Term Restoration Act of 1984 [33] —commonly referred to as the Hatch-Waxman Act [34] —sought to achieve two competing objectives: to encourage the patenting of drugs while also increasing generic competition. [35] On the one hand, Title I of the Act sought to increase the availability of lower-costing generic drugs by extending the ANDA procedure to post-1962 originator drugs. [36] On the other hand, Title II of the Act sought to promote innovation by extending patent terms for drugs, thereby making up for some of the monopoly time “lost” while the drug was subject to premarketing approval. [37]

Title I, which amended the Federal Food, Drug, and Cosmetic Act and the Patent Act, [38] serves as the focus of this paper. Broadly speaking, Title I created an intricate regime whereby the process for approving new drugs was “linked” to the enforcement of drug patent rights. The statutory and regulatory provisions in this “linkage regime” are discussed below.

A. ORANGE BOOK

To obtain FDA approval to sell a new drug, a person is still required to file either an NDA or ANDA. [39] An NDA is the most extensive option and is typically used by an originator. As a result of the Hatch-Waxman Act, an NDA must now satisfy, at the premarket stage, both drug law and patent law requirements.

As to drug law, an NDA must still demonstrate the safety and effectiveness of a drug based on detailed clinical investigations, including animal and human testing.

As to patent law, an NDA must list any patent that claims: (1) the new drug itself (e.g. a product patent); or (2) a method of using the new drug (i.e. a method-of-use patent). [40] If the NDA is approved, the FDA lists the approved drug and submitted patent(s) in a publication known as the “Orange Book.” [41] As well, if a patent is issued after the NDA is filed, the NDA applicant has 30 days to add the patent to the Orange Book. [42]

B. PATENT CERTIFICATION

A manufacturer seeking approval for a generic version of an originator drug may file an ANDA. [43] An ANDA is an expedited option and is typically used by a generic manufacturer. As a result of the Hatch-Waxman Act, an ANDA must also satisfy, at the premarket stage, both drug law and patent law requirements.

As to drug law, an ANDA show that the generic drug is bioequivalent to an originator drug, thereby meeting safety and effectiveness requirements.

As to patent law, an ANDA raises a number of patent issues. First, an exemption from patent infringement—known as the “Bolar exemption”—is carved out for otherwise infringing acts related to the development and submission of information in an ANDA. [44] Second, however, the actual filing of an ANDA with the FDA, before expiry of a relevant drug patent, constitutes an act of infringement (“ANDA infringement”). [45]

The prosecution and defense of an ANDA infringement are also governed by the Hatch-Waxman Act. With respect to each relevant patent listed in the Orange Book, an ANDA applicant must certify that the patent information does not bar FDA approval of the generic drug. Specifically, the ANDA applicant must certify one of the following:

(1) that patent information has not been filed (a “Paragraph I certification ”);

(2) that the patent has expired (a “Paragraph II certification ”);

(3) that the patent will expire on a specified date (a “Paragraph III certification ”); or

(4) that the patent is invalid or will not be infringed by the manufacture, use, or sale of the generic drug (a “Paragraph IV certification ”). [46]

As well, if a new patent is added to the Orange Book while an ANDA is pending, the ANDA applicant must amend its certification to address the newly listed patent. [47]

An ANDA containing a Paragraph I or Paragraph II certification may be approved immediately. [48] An ANDA containing a Paragraph III certification may be approved on the date of patent expiry. [49] For an ANDA containing a Paragraph IV certification, the approval date is determined by a Pandora’s box of procedures and remedies, as detailed below. [50]

An ANDA applicant must notify the originator of any Paragraph IV certification and provide a detailed statement of the factual and legal basis for asserting that the patent is not valid or will not be infringed by the generic drug. [51] Once notified, the originator has 45 days to commence an infringement action against the ANDA applicant. [52]

If an action is not commenced, the ANDA may be approved by the FDA immediately. If an action is commenced—which is usually the case—the patentee benefits from an automatic injunction of 30 months. [53] During this period, the ANDA cannot be approved by the FDA. [54]

During the 45-day window given to the originator, the ANDA applicant is prohibited from starting its own action to obtain a declaratory judgment with respect to the patent. [55] The ANDA applicant also has a limited ability to dispute whether a patent was properly listed in the Orange Book in the first place. In this regard, if an ANDA applicant questions the accuracy or relevance of the patent information in the Orange Book, the applicant may write to the FDA. [56] The FDA will then request that the NDA applicant confirm the patent information. [57] Unless the NDA applicant withdraws or amends its patent information in response to the FDA’s inquiries, the FDA will not make changes to the Orange Book. [58] The FDA does not independently assess the propriety of patents listed in the Orange Book. Rather, the FDA has “a longstanding policy not to get involved in patent disputes. It administers the Hatch-Waxman Amendments in a ministerial fashion simply following the intent of the parties that list patents.” [59]

C. 180-DAY EXCLUSIVITY

The Hatch-Waxman Act “also provides an incentive for generic drug companies to bear the cost of patent litigation that may arise when they challenge allegedly invalid patents or design products they contend are non-infringing.” [60] The first ANDA applicant to file a Paragraph IV certification is entitled to the exclusive right to market, for a period of 180 days, its generic drug (the “180-day exclusivity”). [61] The 180-day exclusivity is triggered by the earlier of:

(1) the date of the first commercial marketing of the generic drug by the ANDA applicant; [62] or

(2) the date of a court decision—interpreted to mean first, not final decision [63] —holding the patent in question to be invalid or not infringed. [64]

The FDA can approve a second ANDA (for the same generic drug) only after the 180-day exclusivity has ended. If the 180-day exclusivity is never triggered, no other ANDA can be approved.

C. Canada

In order to advertise and sell a “new drug” [65] in Canada, a drug manufacturer must obtain an approval, known as a Notice of Compliance, from the federal Minister of Health (the “Minister”). In order to obtain a Notice of Compliance, all new drugs must satisfy health and safety requirements set out in the Food and Drugs Act [66] and Food and Drug Regulations. [67] As well, new drugs must satisfy unique requirements under the Patented Medicines (Notice of Compliance) Regulations (the “Patented Medicines Regulations”). [68] An overview of the legislative history of these provisions is set out below.

1. Patent Act

In 1923, the Canadian Patent Act [69] created compulsory licensing for patented medicines. [70] Under the regime, a generic drug manufacturer could apply to the Commissioner of Patents for a license to use a patented medicine (contained in an originator drug) [71] in exchange for the payment of royalties to the patentee. The Commissioner of Patents was generally required to issue a compulsory license, unless there was a “good reason” to refuse it. Initially, the compulsory licensing provisions were underused because they prohibited the licensing of imported medicines. In 1969, this prohibition was lifted. [72] Between 1969 and 1987, a compulsory licensee could obtain specific rights to import, manufacture, use, or sell a patented medicine. [73] Most compulsory licenses were for the importation of bulk medicines, which could be subsequently mixed with inactive ingredients and made into final dosage form in Canada. [74] In order to compensate the patentee, a standard royalty was set at four percent of the final selling price of the drug. [75]

In 1987, the Patent Act was amended to create blackout periods against compulsory licenses. [76] From the date an originator drug (containing a patented medicine) was first approved, no compulsory license could be issued for seven years. This period was extended to ten years if the compulsory license sought to import a patented medicine. [77]

2. Food and Drugs Act

The original Food and Drugs Act was passed in 1953. [78] In terms of drug regulation, the Act contained an inspection program for all drug plants and prohibited drug sampling to the general public. [79] The regulation of drugs was within the mandate of the Department of Health and Welfare (now the Ministry of Health, also known as Health Canada). As a result of amendments to the Act in 1963, [80] a system of premarket approval was created for new drugs.

The amendments required a manufacturer to file a New Drug Submission (NDS) prior to the marketing of a new drug. The NDS—equivalent to an NDA in the United States—had to demonstrate (and must still demonstrate) that the new drug is safe and effective. [81] As to which drugs were subject to premarketing approval, a distinction developed between pre- and post-1962 drugs (as was also the case in the United States). [82] Generally speaking, drugs marketed before 1962 were designated as “Old Drugs” and not caught by the new regime. [83]

In administering the Food and Drugs Act, the regulatory authorities developed a practice of approving abbreviated submissions for generic drugs. [84] In 1995, the Food and Drug Regulations were formally amended to reflect this administrative practice. [85] As a result, by filing an Abbreviated New Drug Submission (ANDS)—equivalent to an ANDA in the United States—a manufacturer can obtain approval for a generic drug by demonstrating that it is bioequivalent to an originator drug. [86]

3. Patented Medicines Regulations

In the early 1990s, as a result of free trade negotiations with the United States and Mexico [87] as well as multilateral negotiations at the World Trade Organization, [88] Canada committed to revising its intellectual property laws. In 1993, the Patent Act Amendment Act eliminated the compulsory licensing of patented medicines. [89] The Patent Act Amendment Act also sought to ensure that generic drugs would be available as soon as a drug patent expired. [90] To achieve this objective, the Act created two exceptions to patent infringement:

(1) an exemption for activities reasonably related to the regulatory review of a generic drug, akin to the “Bolar exemption” in the United States (the “regulatory review exemption”); [91] and

(2) an exemption permitting the stockpiling of a generic drug so that it could enter the market immediately upon patent expiry (the “stockpiling exemption”). [92] This exemption was subsequently found to be incompatible with Canada’s obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”). [93]

In connection with these statutory exemptions, the Governor in Council was authorized to make regulations “necessary for preventing the infringement of a patent.” [94] On March 12, 1993, the Governor in Council did so—the Patented Medicines Regulations came into effect. [95]

The Patent Medicines Regulations were meant to balance the competing interests of originator and generic manufacturers (similar to the Hatch-Waxman balance). According to a Regulatory Impact Analysis Statement, this balance would “allow patentees to enjoy full patent protection while ensuring off-patented competitors will be able to enter the marketplace immediately upon the expiry of all patents pertaining to a medicine.” [96]

The Patented Medicines Regulations created a complex regime whereby the process for approving new drugs was “linked” to the enforcement of drug patent rights. [97] As detailed below, the Patented Medicines Regulations are structurally similar to, though functionally different from, Title I of the Hatch-Waxman Act.

A. PATENT REGISTER

As a result of the Patented Medicines Regulations, an NDS must now satisfy, at the premarket stage, both drug law and patent law requirements.

As to drug law, an NDS must still demonstrate that a drug is safe and effective based on original clinical tests. [98]

As to patent law, an originator who files an NDS may submit to the Minister a patent list for the new drug. [99] The patent list must set out any Canadian patent that contains: (1) a claim for the medicine itself (e.g. product patent); or (2) a claim for the use of the medicine (i.e. method-of-use patent). [100] If a patent is issued after the NDS is filed, the originator has 30 days to include it in a patent list. [101]

The Minister is required to maintain the patent information in a Patent Register, which is akin to the Orange Book in the United States. [102] In maintaining the register, the Minister is authorized to delete or refuse to add any information that does not comply with the Patented Medicines Regulations. [103] Thus, the Minister has the authority to independently review the Patent Register for improperly submitted patents. [104] By contrast, the FDA is without such authority in administering the Orange Book.

B. NOTICE OF ALLEGATION

An ANDS must also satisfy, at the premarket stage, both drug law and patent law requirements.

As to drug law, an ANDS must show that the generic drug is bioequivalent to a “Canadian reference product.” The reference product is usually an originator drug being sold in Canada. [105]

As to patent law, an ANDS raises a number of issues. First, the development and submission of information in an ANDS—before expiry of a relevant patent—are non-infringing activities. This is because of the “regulatory review” exemption under section 55.2 of the Patent Act. Second, under Canadian patent law, the mere filing of an ANDS with the Minister, before expiry of a relevant patent, does not give rise to a statutory cause of action for patent infringement.

Nonetheless, a manufacturer who files an ANDS “comparing” [106] a generic drug with an originator drug must address each relevant patent on the Register. [107] In addressing a patent, the generic manufacturer has two main options: (1) state that it accepts that the generic drug will not be approved until after patent expiry; or (2) “allege” that the patent does not prohibit the Minister from approving the generic drug. [108] Under option (2), the generic manufacturer must make one or more of the following “allegations”:

(1) that the originator was not entitled to file the patent;

(2) that the patent has expired;

(3) that the patent is invalid (“allegation of invalidity ”); or

(4) that no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using, or selling of the generic drug (“allegation of non-infringement ”). [109]

A generic manufacturer is required to provide a detailed statement of the legal and factual basis for any allegation and must serve the originator with a “notice of allegation.” [110] As well, if a new patent is added to the Patent Register while an ANDS is pending, the generic manufacturer must make a new allegation.

C. PROHIBITION PROCEEDING

Once notified, the originator has 45 days to decide whether to contest the allegation in a “Prohibition Proceeding.” [111] A Prohibition Proceeding is not a patent infringement suit. Rather, it is a judicial review application in which the originator seeks to prohibit the Minister from issuing a Notice of Compliance to the generic manufacturer until after patent expiry. [112] The record in a Prohibition Proceeding is based on affidavit evidence and cross-examination.

If a Prohibition Proceeding is not commenced within 45 days, the Minister can go ahead and issue a Notice of Compliance to the generic manufacturer. [113] If a Prohibition Proceeding is commenced, the originator is entitled to an automatic injunction of 24 months. [114] During this period, a Notice of Compliance cannot be issued to generic manufacturer. [115] In Apotex Inc. v. Merck Frosst Canada Inc. , [116] the Supreme Court of Canada described the automatic injunction as part of a “draconian regime.”

Because a Prohibition Proceeding is not a patent infringement suit, it does not finally determine issues of patent infringement or validity. Rather, a Prohibition Proceeding determines whether an allegation made by the generic manufacturer is “justified.” [117] An allegation is “justified” if, on the basis of assumed or proven facts, it would give rise to a legal conclusion that the patent is not infringed. [118]

The originator has the burden of proving that an allegation is not justified. [119] If a court finds an allegation is not justified, the Minister is prohibited from granting a Notice of Compliance to the generic manufacturer. [120] If the court finds an allegation is justified, the Prohibition Proceeding is dismissed.

If the Prohibition Proceeding is ultimately unsuccessful (i.e. finally dismissed, withdrawn, or discontinued), the generic manufacturer may recover damages from the originator. [121] The damages would compensate the generic manufacturer for losses incurred as a result of the delayed market entry of its drug. [122]

In addition, regardless of the ultimate disposition of the Prohibition Proceeding, a parallel patent action may be commenced with respect to the same originator drug. The result in the patent action (based on a trial record) will not necessarily follow the result in the Prohibition Proceeding (based on affidavit evidence). [123]

D. Summary

It follows from the foregoing that there are both differences and similarities between the Hatch-Waxman Act and the Patented Medicines Regulations. On the one hand, the overall structure of the two regimes is very similar: the process for approving new drugs is “linked” to the enforcement of drug patent rights. On the other hand, the two regimes have a number of different functions: most notably, the 180-day exclusivity is unique to the Hatch-Waxman Act while the “summary” Prohibition Proceeding is unique to the Patented Medicines Regulations. These similarities and differences are set out in Table I.
Table I: Comparison of Hatch-Waxman Act and Patented Medicines Regulations


Hatch-Waxman Act
Patented Medicines Regulations
Competing Objectives
increase availability of generic drugs
continue to promote pharmaceutical innovation
ensure timely access to generic drugs
ensure effective enforcement of drug patents
New Drug Filings
NDA (filed by originator with full clinical testing data)
ANDA (filed by generic manufacturer with bioequivalence data)
NDS (filed by originator with full clinical testing data)
ANDS (filed by generic manufacturer with bioequivalence data)
Patent Exemption
No infringement for development activities related to ANDA filing
No infringement for development activities related to ANDS filing
Patent Claims Covered
Claim to new drug itself
Claim to method of using new drug
Claim to medicine itself
Claim to use of medicine
Listing of Patents
FDA includes patents in Orange Book without independently assessing propriety of listings
Minister has duty to maintain Patent Register and ensure propriety of listings
Challenging Listed Patents
Paragraph IV certification as to validity or infringement of listed patent
Notice of Allegation as to validity or infringement of listed patent
Type of Litigation
Filing of ANDA prior to patent expiry gives rise to cause of action for patent infringement
Summary Prohibition Proceeding determines whether allegation is justified but does not finally determine patent rights
Incentive to List Patents
Automatic 30-month injunction against FDA approval
Automatic 24-month injunction against issuance of Notice of Compliance to generic manufacturer
Incentive to Challenge Listed Patents
First ANDA applicant to file Paragraph IV certification is eligible for 180-day exclusivity
No exclusivity period available though damages may be recovered by generic manufacturer

III. DEBATE OVER LEGAL INCENTIVES

The incentives to list and challenge patents (last two rows of Table I) are among the most controversial aspects of the Hatch-Waxman Act and Patented Medicines Regulations. This Part focuses on the nature and scope of these incentives and, more particularly, their apparent deficiencies.

The incentive to list patents (the “triggering incentive ”) relates to the automatic injunction under the Hatch-Waxman Act and Patented Medicines Regulations. This injunction is triggered when an originator’s patent is challenged by a generic manufacturer. However, only a patent that is listed in the Orange Book or Patent Register can trigger the injunction. An originator is therefore encouraged to have its patents listed.

The incentive to challenge listed patents (the “marketing incentive ”) relates to the 180-day exclusivity under the Hatch-Waxman Act. An ANDA applicant is encouraged to challenge a listed patent so as to possibly trigger, at the end of litigation, the 180-day exclusivity. This period of exclusivity provides the first ANDA applicant with a significant “head start” over any other ANDA applicants. [124]

Under the Patented Medicines Regulations, there is no comparable marketing incentive. However, a generic manufacturer may still be encouraged to challenge a listed patent so as to possibly recover, at the end of litigation, a damages award. The damages would compensate the generic manufacturer for being kept off the market (e.g. due to an invalid patent listed in the Patent Register).

In theory, the triggering incentive has an important objective: encouraging innovation through strong protection for drug patents. Likewise, the marketing incentive has a competing, yet equally important objective: encouraging the availability of lower-costing generic drugs. The triggering and marketing incentives are thus part of the “Hatch-Waxman balance.” [125] Similarly, competing interests underlie the Patented Medicines Regulations (despite the absence of a true marketing incentive). Patentees would benefit from the elimination of compulsory licenses while generic competitors would still appear as soon as possible.

Nonetheless, in practice, the triggering and marketing incentives may be used to “ ‘game’ the system.” [126] That is, the incentives may be used to defeat their intended objectives by “securing greater profits for [drug manufacturers] without providing a corresponding benefit to consumers.” [127] The extent to which this may occur is the focus of this Part—a comparative study of how the triggering and marketing incentives played out in one particular case: CIPRO.

Ciprofloxacin is a medicinal compound with antibacterial and antimicrobial properties. [128] Bayer AG (“Bayer”), a health care and chemicals group consisting of some 350 individual companies, owns patent rights to ciprofloxacin. [129] These patent rights extend to Canada and the United States where ciprofloxacin is sold under Bayer’s trade name CIPRO. Since 1993, CIPRO has been the top-selling antibiotic in the world. [130] Ciprofloxacin has also been the subject of protracted litigation under the Hatch-Waxman Act and Patented Medicines Regulations. The litigation shows that the triggering and marketing incentives may be prone to misuse.

A. CIPRO Litigation in Canada

Ciprofloxacin is the subject of Canadian Patents 1,218,067 (the “ ’067 Patent”) and 1,322,334 (the “ ’334 Patent”). The ’067 Patent, which was issued on February 17, 1987, claims: (1) the active ingredient or compound ciprofloxacin; and (2) ciprofloxacin when made by a particular process. [131] The ’334 Patent, which was issued on September 21, 1993, claims pharmaceutical compositions in which ciprofloxacin is the active ingredient. [132] Both patents are owned by Bayer and currently expire in 2004.

Bayer sells CIPRO pursuant to Notices of Compliance issued by the Minister. [133] Apotex Inc. (“Apotex”), a company that manufactures and sells generic drugs in Canada, has also sought a Notice of Compliance from the Minister for ciprofloxacin. [134]

As detailed below, Apotex challenged Bayer’s patents in five notices of allegations, each of which led to a Prohibition Proceeding by Bayer. The object of each proceeding was to prohibit the Minister from issuing a Notice of Compliance to Apotex until after patent expiry.

1. Prohibition Proceeding No. 1

In April 1993, shortly after the Patented Medicines Regulations came into force, patent lists were filed for Bayer’s CIPRO. The patent lists referred to the ’067 Patent. [135] Apotex served a notice of allegation alleging that no claim for the medicine ciprofloxacin or for the use of ciprofloxacin would be infringed by the making, constructing, using, or selling of Apotex’ generic ciprofloxacin tablets. [136] Specifically, Apotex alleged that, by using its own process for preparing ciprofloxacin, it would not use the processes claimed in the ’067 Patent or their obvious chemical equivalents. [137]

Bayer did not accept the notice of allegation and, in May 1993, commenced a Prohibition Proceeding. [138] This triggered the automatic injunction under the Patented Medicines Regulations.

In November 1995, the Federal Court of Canada, Trial Division, found in favor of Bayer:

[O]n the evidence adduced, ... while the Apotex process for preparing ciprofloxacin differs from the processes specifically described and claimed in the Bayer ’067 patent, those differences are not significant. The differences, whether in the starting compound or in the procedures followed, in my opinion, are obvious chemical equivalents of the Bayer processes within the meaning of that term in the product by process claims of the patent and within the meaning of that term in the Regulations . [139] [emphasis added]

On this basis, Apotex’ allegation was not justified. An Order was therefore granted prohibiting the Minister from issuing a Notice of Compliance to Apotex until after the expiry of the ’067 Patent.

2. Prohibition Proceeding No. 2

In October 1993, new patent lists were filed for Bayer’s CIPRO tablets. The lists referred to the newly issued ’334 Patent. [140] At that time, the ’334 Patent was set to expire in 2010. Since the ’067 Patent was set to expire in 2004, the new patent lists initially added some 6 years to Bayer’s monopoly protection in respect of CIPRO. [141]

A dispute subsequently arose as to whether: (1) the new patent could be addressed in the context of the first Prohibition Proceeding; or (2) the new patent should be addressed in a new notice of allegation which would give rise to a second Prohibition Proceeding, thereby re-triggering the automatic injunction. [142] The Court found that the latter route, “awkward though that may be in particular cases,” [143] was contemplated by the regulatory scheme.

Accordingly, in a second notice of allegation, Apotex addressed the ’334 Patent. Apotex alleged that the ’334 Patent was not within the scope of the Patented Medicines Regulations because its claims for a pharmaceutical “composition” (containing active and inactive ingredients) did not constitute a claim for the “medicine itself.” [144] In response, Bayer commenced a second Prohibition Proceeding.

The matter of construction raised by Apotex was ultimately resolved against it. The Court held that a pharmaceutical “composition” does constitute a “medicine” under the Patented Medicines Regulations. [145] On this basis, in November 1995, Apotex’ allegation was not justified. An Order was granted prohibiting the Minister from issuing a Notice of Compliance to Apotex until after the expiry of the ’334 Patent.

3. Prohibition Proceeding No. 3

In June 1995, Apotex served a third notice of allegation. Apotex alleged that the ’334 Patent was invalid because it disclosed no invention beyond that already claimed in the ’067 Patent. [146] Specifically, Apotex alleged that there was nothing inventive involved in mixing the compound ciprofloxacin (claimed in the ’067 Patent) with other ingredients to make the pharmaceutical compositions claimed in the ’334 Patent. [147]

In July 1995, Bayer responded by commencing a third Prohibition Proceeding. [148] This re-triggered the statutory injunction.

In July 1998, the Federal Court of Canada, Trial Division, found in favor of Apotex:

In conclusion, the statutory presumption of a patent’s validity applies “in the absence of any evidence to the contrary.” In this case, the limited evidence of the parties and Bayer’s acknowledgement [ [149] ] establish that the composition claims disclose no inventive ingenuity over and above that of the compound claims . This evidence, when assessed in the light of Fabwerke Hoechst,[ [150] ] is sufficient to rebut the presumption of validity in section 43 of the Patent Act, at least for the purpose of this summary proceedings [sic]. [151] [emphasis added]

Based on the foregoing, Apotex’ allegation of invalidity of the ’334 Patent was upheld . The third Prohibition Proceeding was therefore dismissed

4. Prohibition Proceedings Nos. 4 and 5

In addition, Bayer had sought patents in Germany, Spain, and Chile for a group of compounds, including ciprofloxacin, for processes for making the compounds, and for their use in pharmaceutical compositions. [152]

Apotex served a fourth and fifth notice of allegation alleging that Bayer had no entitlement to the grant of the ’067 and ’334 Patents and, as such, the patents were invalid. [153] Apotex relied on a provision of the Patent Act which prevents the grant of a patent to an inventor who has already applied in another country for a patent on the same invention. [154] The fourth and fifth notices of allegation relied on a Chilean patent issued to Bayer for a group of compounds including ciprofloxacin. [155] Apotex alleged that Bayer’s Canadian patents were for the “same invention” as a “previously issued” Chilean patent.

In January 1996, Bayer commenced a fourth and fifth Prohibition Proceeding. This again re-triggered the statutory injunction.

Ultimately, because of the result in the third Prohibition Proceeding, only the ’067 Patent was considered in the fourth and fifth Prohibition Proceedings. [156] The determinative issue was whether the ’067 and Chilean patents covered the “same invention.” In November 1998, the Trial Division found in Bayer’s favor. The Court of Appeal affirmed the decision:

[I]t is difficult to avoid the conclusion that the invention in the ’067 patent is for a group of compounds, including ciprofloxacin, made by [a particular process known as] the malonic ester synthesis process, whereas the invention in the Chilean patent is for a somewhat larger group of compounds, including ciprofloxacin, made by processes that do not include the malonic ester synthesis process.

...

[L]ooking at the whole of the specification, the invention in Canadian patent ’067 was not the same as that in the Chilean patent [and therefore the foreign patent bar does not apply]. [157] [emphasis added]

Based on the foregoing, Apotex’ allegations of invalidity were not justified. An Order was granted prohibiting the Minister from issuing a Notice of Compliance to Apotex until after the expiry of the ’067 Patent.

The five Prohibition Proceedings are summarized in Table II.
Table II: CIPRO Prohibition Proceedings

Prohibition Proceeding
Listed Patent
Notice of Allegation
Disposition
No. 1
’067 Patent
Allegation of non-infringing process
Allegation not justified
Prohibition Order granted
No. 2
’334 Patent
Allegation that patent claims outside scope of Regulations
Allegation not justified
Prohibition Order granted
No. 3
’334 Patent
Allegation that patent invalid based on lack of inventive ingenuity
Allegation justified
Prohibition Proceeding dismissed
Nos. 4 & 5
’067 Patent
’334 Patent
Allegation that patents invalid based on foreign patents
’334 Patent not considered
Allegation not justified
Prohibition Order granted

5. The Triggering Incentive Debate

The CIPRO Prohibition Proceedings confirm the strategic importance of listing patents in the Patent Register (and by analogy in the Orange Book).

First, there is a clear advantage to listing more rather than less patent information for an originator drug. This is because each additional listing in the Patent Register presents the opportunity to re-trigger the automatic injunction in litigation with a generic competitor. In the case of CIPRO, Bayer re-triggered the injunction some five times, albeit in response to five notices of allegations served by Apotex. [158]

Second, subject to certain filing and issuance deadlines, a new listing can be added to the Patent Register at any time, even after litigation has commenced in respect of the same drug. [159] The new listing can then be used to prolong the patent life of the same basic drug. This strategy, known as “patent evergreening,” is particularly problematic where the newly listed patent is weak on its face or is added to the Register on the eve of the prior patent’s expiry.

Third, a patent could be listed even though it fails to meet statutory or regulatory requirements (e.g. fails to claims a “medicine” under the Patented Medicines Regulations). Listing a patent in these circumstances—solely for the purpose of re-triggering the automatic injunction—is sometimes referred to as a “trip wire.” [160]

In the case of CIPRO, Bayer’s first patent was included in the Patent Register with an expiry date of 2004. A second patent was listed with an original expiry date of 2010. [161] This initially “evergreened” CIPRO’s patent life for another six years. However, a Prohibition Proceeding relating to the second patent was ultimately dismissed on the basis that Apotex’ allegation of invalidity was justified. Yet, the second patent had still re-triggered the automatic injunction because it was listed in the Patent Register.

The foregoing issues are equally applicable to the Orange Book. According to one commentator:

Orange Book listing elevates every patent as a potential source of delay to generic competition . As both innovator and generic drug manufacturers have learned, the Orange Book can be a strategic weapon, providing an advanced warning mechanism to the marketing department for possible tactical response, and giving the patentee/NDA holder almost automatic injunctive relief for even marginal infringement claims. ... By filing and refiling “improvement” patents[ [162] ] for the same basic drug product, they are able to create a minefield for generic applicants. Routinely cited by generic drug companies as examples of such evergreening are claims for disectable tablets and special coatings, new formulations, crystalline forms of the same drug, and variations on drug delivery technologies. [163] [footnotes omitted; emphasis added]

In fact, the risk of improper patent listings may be more acute under the Hatch-Waxman Act than under the Patented Medicines Regulations. Because the FDA has a policy of not becoming involved in patent disputes, almost any patent can be listed in the Orange Book. On this basis, one commentator has asserted that “NDA holders...are encouraged by FDA rules to ‘evergreen their patents.’ ” [164] In the same vein, as noted in Part II, an ANDA applicant has only a limited ability to challenge a wrongfully listed patent. Specifically, courts have held that there is no private cause of action under the Hatch-Waxman Act for the de-listing of a patent. [165] By contrast, under the Patented Medicines Regulations, the Minister has a duty to maintain the Patent Register and, in doing so, may delete or refuse to add improperly listed patents. [166] The exercise of this Ministerial duty has also been upheld by the courts. [167]

In addition, the Federal Trade Commission (FTC) in the United States has investigated complaints that improper listing strategies may be used by originators. These strategies include listing invalid or otherwise improper patents in the Orange Book, as well as listing new patents on the eve of prior patent expiry. The Chair of the FTC recently described the agency’s work in this area:

[FTC] investigations involve unilateral conduct by branded manufacturers that may be designed to forestall competition. For example, some branded manufacturers list additional patents in the FDA’s “Orange Book,” often shortly before their original patents expire, enabling them to file patent infringement suits against generic drug firms posed to enter the market. Under Hatch-Waxman, such litigation triggers an automatic 30-month stay on FDA approval of the generic drug. If the listings do not meet statutory and regulatory requirements, then their inclusion in the Orange Book may constitute unlawful restraints on competition . [168] [emphasis added]

In one FTC case, Biovail Corporation, a Canadian company, was charged with wrongfully listing a patent in the Orange Book so as to prevent competition from Andrx Pharmaceuticals, Inc. (“Andrx”). The drug in question was Biovail’s TIAZAC, which is used to treat hypertension and angina. [169] Andrx filed a Paragraph IV certification and the 30-month injunction was triggered by Biovail. Shortly before the injunction was set to expire, Biovail acquired a newly issued patent from a third party and listed it in the Orange Book. Andrx then had to file a new patent certification and the 30-month injunction was re-triggered by Biovail.

The FTC alleged that Biovail misled the FDA to believe that the new patent met the requirements under the Hatch-Waxman Act. In doing so, Biovail avoided de-listing from the Orange Book. In April 2002, the FTC announced an enforcement action against Biovail requiring, among other things, divestiture of Biovail’s illegally acquired patent and dismissal of the patent suit against Andrx.

The CIPRO litigation in Canada can be compared with the Biovail case, though there are notable differences. On the one hand, Bayer, unlike Biovail, did not acquire its second patent from a third party. Moreover, Bayer did not list its second patent on the eve of an injunction expiry date. On the other hand, Bayer, like Biovail, had the opportunity to benefit, in a more or less temporary fashion, from a “patent evergreening” strategy. This, due to the listing of new patent information, which re-triggered the automatic injunction.

B. CIPRO Litigation in the United States

The FDA has approved CIPRO for the treatment of over a dozen infections. [170] In 1999, CIPRO ranked eleventh among the most prescribed drugs in the U.S. and twentieth in total sales in the U.S. [171] In 1999 and 2000, Bayer sold over $1 billion of CIPRO in the United States. [172]

1. Patent Litigation

On June 2, 1987, the United States Patent and Trademark Office issued patent number 4,670,444 (the “ ’444 Patent”) to Bayer for the active ingredient ciprofloxacin. [173] The ’444 Patent also claims: (1) compositions containing ciprofloxacin; and (2) a process for making ciprofloxacin. The patent expires in December 2003. [174]

Prior to the issuance of the ’444 Patent, Bayer had filed an NDA for ciprofloxacin tablets. In October 1987, Bayer obtained FDA approval to market CIPRO. [175] The ’444 Patent was then listed in the Orange Book.

In October 1991, Barr Laboratories (“Barr”), a manufacturer of generic drugs in the United States, filed an ANDA for ciprofloxacin. [176] As the first ANDA applicant, Barr filed a Paragraph IV certification. Barr certified that the ’444 Patent did not prevent the FDA from approving the ANDA. [177] Specifically, Barr asserted that the ’444 Patent was invalid due to “obviousness-type double patenting” and inequitable conduct by Bayer in prosecuting the patent. [178] In December 1991, Barr notified Bayer of this patent certification. [179] In January 1992, Bayer commenced a patent action against Barr. [180]

By starting the patent suit, Bayer automatically triggered the 30-month injunction under the Hatch-Waxman Act. This meant the FDA could not approve Barr’s generic drug before July, 1994. Moreover, as the first ANDA applicant, Barr was eligible for 180 days of exclusive market access for its generic drug. The 180-day exclusivity which would be triggered by the earlier of: (1) the date on which Barr entered the market with its generic ciprofloxacin; or (2) the date on which a court first found the ’444 Patent to be invalid. [181]

In November 1992, Bayer and Barr agreed to extend the 30-month injunction until a “final judgment” was rendered in the patent litigation. [182] The parties agreed that a “final judgment” would arise only after all appeals were exhausted or all appeal deadlines expired. [183] Barr would also not manufacture, use, or sell ciprofloxacin in the United States until a “final judgment” was obtained. [184] By Order dated December 8, 1992, the Southern District of New York gave effect to the parties’ agreement. [185]

In June 1996, Bayer and Barr both lost motions for partial summary judgment in the patent litigation. [186] By that time, but for the parties’ agreement in 1992, the 30-month injunction would have expired.

In January 1997, Bayer and Barr agreed to settle the patent litigation (the “Patent Settlement”). [187] The Patent Settlement required that: (1) Barr recognize the validity and enforceability of the ’444 Patent; (2) Barr not manufacture or sell its generic drug until after expiry of the ’444 Patent; and (3) Bayer initially pay Barr some $24 million. The Patent Settlement also gave Bayer the option of either licensing Barr to sell a generic version of CIPRO or paying Barr an estimated $25 million annually until patent expiry. [188]

On January 16, 1997, the Southern District gave effect to a Consent Judgment between Bayer and Barr. [189] The Consent Judgment recognized the validity and enforceability of the ’444 Patent and the infringement of the patent by Barr. [190]

To date, Bayer has reportedly paid some $100 million to Barr under the terms of the Patent Settlement. [191] As well, because Barr’s generic version of CIPRO has not come to market, the 180-day exclusivity under the Hatch-Waxman Act has not been triggered. It is recalled that until the 180-day exclusivity is triggered and expires, no other ANDA can be approved by the FDA. Currently, four other generic drug manufacturers have filed ANDAs for ciprofloxacin and hold tentative approvals from the FDA. [192]

2. State Antitrust Litigation

The Patent Settlement between Bayer and Barr is currently the subject of some 30 lawsuits in the United States. A number of plaintiff classes, including individual consumers, third party payors, pharmacies, and retailers who have purchased CIPRO, allege that Bayer and Barr violated state antitrust laws through their conduct under the Hatch-Waxman Act. [193]

In one multi-district suit, In re Ciprofloxacin Hydrochloride Antitrust Litigation , [194] it is alleged that the Patent Settlement unlawfully restrained trade in the ciprofloxacin market and effectively eliminated any generic competition. On this basis, violations of state antitrust and consumer protection laws are alleged. The plaintiff purchasers assert that they were injured because, in the absence of the Patent Settlement, they would have had access to a generic version of CIPRO that was less expensive than Bayer’s originator drug. To support this claim, the plaintiffs allege that: (1) by the time the Patent Settlement was executed, Barr had received tentative FDA approval to sell its generic version of CIPRO; [195] (2) but for the Patent Settlement, Barr would have entered the market with its generic drug; and (3) the Patent Settlement avoided triggering the 180-day exclusivity so as to prevent third party generics from entering the market. Based on the foregoing, the plaintiffs seek to recover the amounts they allegedly overpaid for CIPRO due to the non-availability of a generic version. [196]

3. The Marketing Incentive Debate

The CIPRO litigation in the United States confirms that the marketing incentive (i.e. the 180-day exclusivity) may be used to defeat the Hatch-Waxman balance.

Deciding a jurisdictional question in In re Ciprofloxacin Hydrochloride Antitrust Litigation , Judge Trager of the Eastern District Court of New York commented on the marketing incentive:

It is also significant that, under the Hatch-Waxman Act, 180 days after Barr’s entry into the market, generic competitors like HMR and Rugby might have entered the market with generic versions of ciprofloxacin. The probable result of market entry by three generic competitors would be the reduction of profits yielded by sales of both generic and brand-name Cipro. In contrast, the Agreement signed by defendants was undoubtedly intended to maintain higher prices, and profits, during the term of the Agreement, thereby shifting the incentives for generic entry and eliminating the corresponding consumer benefits which were among the goals of Hatch-Waxman. [197]

The ability to combine the marketing incentive with monopoly power creates fertile ground for settlement agreements in the Hatch Waxman context. As one commentator noted:

[T]here is a significant temptation for an innovator company and a would-be generic competitor to use certain Hatch Waxman provisions to perpetuate rather than erode whatever market power the innovator has by virtue of its patent protection for the drug in question. This can be achieved by reaching a settlement or partial settlement of patent litigation that delays generic entry and allows the innovator and generic challenger to ‘share the wealth’—that is, to share what antitrust lawyers and economists like to call “rents,” or supracompetitive returns. [198]

Applying this analysis, Judge Trager wrote that Bayer “was willing to share tens of millions of dollars of ‘supracompetitive returns’ to end its patent litigation with Barr.” [199] The Court went on to note that the payments made by Bayer to Barr might be highly indicative of the “ ‘anticompetitive intent of the parties in entering the agreement and the rent-preserving effect of that agreement.’ ” [200] In a similar vein, the FTC has also investigation the Patent Settlement between Bayer and Barr but, to date, no enforcement action has been reported. [201]

The antitrust issues raised by the Patent Settlement are not unique to CIPRO. It is well known that the FTC has investigated other complaints related to patent settlements under the Hatch-Waxman Act. [202] In those complaints, the parties allegedly agreed to share monopoly profits for a patented drug rather than trigger the 180-day exclusivity and permit generic competition. The Chair of the FTC recently summarized the agency’s work in this area:

FTC investigations have examined claims that Hatch-Waxman’s provisions [relating to the 180-day exclusivity] have been manipulated to delay or deter generic entry. Some makers of brand-name and generic drugs have entered into agreements under which the generic entrant is essentially paid not to compete [and not to trigger the 180-day exclusivity]. ... Agreements of this type may unreasonably delay the entry of generic drug competition, potentially costing consumers hundreds of millions of dollars annually. [203]

One leading case investigated by the FTC involved originator Hoechst Marion Roussel (“Hoechst”) and generic manufacturer Andrx. [204] CARDIZEM CD, a drug used to treat hypertension and angina, was covered by a Hoechst patent listed in the Orange Book. Andrx filed a Paragraph IV certification and the 30-month injunction was triggered when Hoechst started a patent suit. The parties subsequently entered into an interim settlement agreement that applied while the litigation was pending.

The FTC alleged that, under the settlement, Hoechst paid Andrx some $80 million to refrain from marketing its generic drug. It was further alleged that Andrx, as the first ANDA applicant, agreed not to waive its entitlement to the 180-day exclusivity. In the result, the 180-day exclusivity was not triggered (because there was no commercial marketing of the generic drug) and, hence, the FDA could not approve any other ANDA. The FTC alleged that the agreement denied consumers access to lower-priced generic drugs. These allegations were ultimately resolved by consent order.

The Hoechst/Andrx settlement, like the Bayer/Barr settlement, has spawned state antitrust suits by consumers. [205] Plaintiffs’ legal theories in both contexts have been described as “virtually identical.” [206] It is commonly alleged that the drug manufacturers all acted with an “impure heart” by conducting their respective patent litigation as they did. [207] Nonetheless, there are factual distinctions between the cases that could ultimately weigh in favor of Bayer and Barr. First, the Bayer/Barr settlement was a final as opposed to interim settlement agreement. Second, the Bayer/Barr settlement recognized the validity and enforcement of Bayer’s patent as well as infringement by Barr.

C. Summary

Competing policy objectives underlie the Hatch-Waxman Act and Patented Medicines Regulations: encouraging innovation through strong patent protection, on the one hand, and encouraging access to lower-costing generic drugs, on the other. In attempting to balance these dual policies, the triggering and marketing incentives were created. However, the incentives in both jurisdictions may be used to defeat, rather than promote, their intended objectives. In this sense, a paradox of sorts is created, as shown in Table III.
Table III: The Hatch-Waxman/Patented Medicines Regulations Paradox


Intended Objectives
Unintended Effects
Triggering Incentive
(Hatch-Waxman Act and Patented Medicines Regulations)
Encourage innovation by providing incentive to list drug patents
Patent evergreening which extends monopoly on the same basic drug
Marketing Incentive
(Hatch-Waxman Act)
Encourage the availability of generic drugs by providing incentive to challenge listed drug patents
Profit sharing by originator and generic firms thereby preventing lower-costing drugs from entering the market

IV. DEBATE OVER POLICY OBJECTIVES

Thus far, the discussion has focused on the duals policies that gave rise to the Hatch-Waxman Act and Patented Medicines Regulations. However, in the wake of the September 11, a new, suddenly pressing duality implicates the pharmaceutical industry: how to maintain existing drug patent laws while also ensuring that adequate drug supplies are available to fight bioterrorist threats. The purpose of this Part is to examine the relationship between the pharmaceutical industry and bioterrorism defense, and its possible impact on the Hatch-Waxman Act and Patented Medicines Regulations. Once again, the focus is on CIPRO—the poster drug for the bioterrorism debate.

A. CIPRO and Anthrax: A Chronology of Events

Even before the attacks of September 11, 2001, the possibility of bioterrorism concerned both government and pharmaceutical representatives alike. In 1990, during the Persian Gulf war, the United States Army researched antibiotics out of concern that a biological attack—such as one involving the anthrax bacteria—might be launched by Iraq. [208] The Army conducted animal studies in which the effectiveness of CIPRO against anthrax was compared with penicillin and doxycycline, two older, off-patent antibiotics. [209] In 1999, the Department of Defense and Centers for Disease Control and Prevention renewed their interest in anthrax treatments. [210] In 2000, at the government’s urging, Bayer sought a label change for CIPRO so that the drug could be used to treat inhalation anthrax in humans. [211] The FDA approved the new label.

Soon after September 11, with the threat of bioterrorism unknowingly looming on the horizon, Bayer started monitoring the demand for CIPRO. [212] However, Bayer did not increase production of CIPRO at that time. [213]

1. United States Response: Phase I

In October, the threat of bioterrorism became a reality in the United States. A series of anthrax attacks occurred whereby mail, contaminated with the microbes that cause anthrax, was sent to media organizations and government offices in Florida and New York. On October 5, a Florida reporter died from inhalation anthrax. [214] On October 15, mail containing sufficient anthrax to kill thousands of people was discovered in the offices of Tom Daschle, Democrat of South Dakota, the Senate Majority Leader. [215] At the same time, an NBC employee was infected. [216]

As the attacks continued, CIPRO—the so-called “gold standard” [217] for anthrax treatment—became a household word. On NBC’s Nightly News, anchor Tom Brokaw held the anthrax drug up to the camera and saluted it with the words: “In Cipro we trust.” [218]

As the fear of anthrax spread, the demand for CIPRO soared at hospitals, wholesalers, and pharmacies nationwide. [219] On October 14, the Secretary of Human Health and Services, Tommy G. Thompson, announced that the United States government would increase its stockpile of anthrax drugs to be able to treat, if necessary, 12 million people for 60 days. [220] On October 16, Bayer responded that it would triple its production of CIPRO so as to produce 200 million pills over a three-month period. [221]

Senator Charles E. Schumer, Democrat of New York, immediately expressed concern over Bayer’s ability to supply CIPRO in sufficient quantities. On October 16, Schumer issued a press release titled “New Cipro Source Could Dramatically Increase Supply.” [222] Schumer argued that Thomspon ought to buy lower-costing, generic versions of CIPRO based on the following:

(1) The United States government could, under 28 U.S.C. § 1498, purchase ciprofloxacin for its own use by looking to suppliers other than Bayer. [223]

(2) The five generic drug manufacturers who had received tentative FDA approval to market ciprofloxacin should be finally approved by the FDA. [224]

(3) In order for Thomspon to reach a deal with the generic drug manufacturers, the latter would have to be indemnified in the event that Bayer successfully sued for patent infringement.

(4) The Patent Settlement between Bayer and Barr, which was being investigated by the FTC, might have illegally prevented generic competition in the ciprofloxacin market.

In a similar vein, Barr wrote to Thompson and offered to produce, within 60 days, a monthly supply of 30 to 40 million generic ciprofloxacin tablets. [225] Three other generic manufacturers—Par Pharmaceuticals, Ranbaxy Pharmaceuticals, and Teva Pharmaceuticals—offered to supply as many as 50 to 60 million pills per month. [226]

On October 17, Thompson rejected requests to break the CIPRO patent. On NBC’s Today Show, Thompson told anchor Matt Lauer: “Well, right now, Cipro has a patent, and we are looking at Senator Schumer’s suggestion. But I do not believe we have the legal authority to do so.” [227] Thompson told reporters that breaking the patent would be illegal. [228] Thompson also tried to deflect attention from the CIPRO patent by announcing that off-patent antibiotics doxycycline and penicillin would also be approved for treating inhalation anthrax. [229]

Senator Edward M. Kennedy, Democrat of Massachusetts, made a similar attempt to balance drug patent rights with public health needs. Kennedy met with the heads of pharmaceutical and biotechnology companies to discuss the production of drugs and vaccines to fight germ warfare and bioterrorism. [230] Top executives from the pharmaceutical industry also formed a “task force on emergency preparedness” to work with the government on bioterrorism defense. [231]

2. The All Canadian Deal

Meanwhile, a different approach was taken in Canada. There, police had investigated a number of incidents—which all turned out to be hoaxes—involving packages of suspicious white powder. [232] Even so, the Canadian government wanted to stockpile sufficient anti-anthrax drugs to treat, if necessary, 100,000 people. [233]

According to Health Canada, Bayer agreed to supply 800,000 tablets for the national stockpile but, when asked for an additional 900,000 pills, Bayer indicated it had no more product available. [234] However, Health Canada had previously found out that Apotex had 400 kg of bulk ciprofloxacin that could be made into generic tablets. [235] Armed with this information, on October 18, Allan Rock, then Minister of Health, turned to Apotex. Rock placed an order for generic ciprofloxacin worth $1 million, thereby bypassing the Patent Act. [236] Rock defended his actions as “necessary to protect Canadians.” [237]

For its part, the White House did not endorse the Canadian approach but, rather, announced that it was negotiating with Bayer and other firms to purchase anti-anthrax drugs. [238]

Bayer subsequently disputed Health Canada’s version of events, indicating that no request for additional quantities was made and no supply difficulties existed. [239] As well, Bayer charged that the government’s actions were illegal because, in a national emergency, the Canadian Patent Act requires that the Patent Commissioner be advised before patent rights can be overridden. [240] On October 20, Bayer further responded by donating 200,000 tablets for “front line” workers, namely, people in government offices and media outlets. [241] At the same time, Bayer started running full-page newspaper ads in the United States, affirming its commitment to fight terrorism. [242]

On October 22, following emergency meetings with Bayer, the Canadian government reversed its position and agreed to abide by Bayer’s patent. [243] The purchase price for the patented drug was $1.30 per tablet. [244] The government also avoided having to pay twice for the product when, two days later, Apotex agreed to absorb its production costs under the October 18 contract. [245] Apotex also agreed that if Bayer could not meet demand, Apotex’ tablets would be used. [246]

3. United States Response: Phase II

On October 23, after the Canadian deal was announced, Bayer offered to sell CIPRO to the United States government for $1.75 to $1.83 per tablet. [247] Apparently reversing his earlier position, Thompson rejected the offer and demanded a lower price. [248] In fact, as Thompson would later reveal, the government was prepared to break Bayer’s patent unless the price was dropped. [249] At the same time, Barr offered to supply the drug for less than $1 per tablet, provided it did not have to pay royalties to Bayer. [250]

On October 24, Bayer and Thompson reached an agreement. By the end of 2001, Bayer would provide 100 million CIPRO tablets at the reduced unit price of $0.95. [251] Another two million pills would be donated. [252] Minister of Health Allan Rock responded by telling Bayer that the “same terms and conditions must be made available to Canada.” [253] Senator Schumer reacted with continued concern over Bayer’s ability to supply the product. [254] As well, Bayer’s actions were quickly “upstaged” by competitors who offered to provide their own drugs free of charge if the FDA approved their use for anthrax. [255]

On October 29, CIPRO itself was upstaged—doxycycline was named by the Centers for Disease Control and Prevention as the “drug of choice” for treating the strain of anthrax in question. [256] Canada responded by stockpiling 47,000 doses of doxycycline; the United States contracted to purchase 1.2 million doses of the drug for $0.03 each. [257]

In the end, the anthrax attacks left five people dead in the United States. [258] An estimated 10,000 people received antibiotics, with CIPRO as the top prescribed drug. [259] No anthrax cases were reported in Canada. [260]

B. The Bioterrorism Debate

The CIPRO/anthrax dispute confirms that effective bioterrorism defense does not necessarily accord with existing drug patent rules in Canada and the United States.

1. United States

In the United States, the federal government has authority to use or manufacture a patented invention without consent of the patent owner, provided that the latter is compensated. The basis for doing so is twofold. First, a sovereign’s power of “eminent domain ” authorizes such a taking:

Pursuant to the right of eminent domain the government can take private property for public use without the approval of the property owner. ... In the United States it is Constitutionally recognized with the only major limitation being that the government must pay fair market value to the property owner. This power to take private property has been found applicable to intellectual property; therefore, the United States can unilaterally decide to appropriate a patented invention for the benefit of the public provided the patent owner is paid for her property . [261] [footnotes omitted; emphasis added]

Second, 28 U.S.C. § 1498(a) gives the United States Court of Federal Claims exclusive jurisdiction over patent infringement claims against the government. It also provides the following remedy for the patentee whose invention has been used by the government:

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture. ... [262]

Injunctive relief is not provided by § 1498. The federal law also provides government contractors with “an affirmative defense” to patent infringement. [263] Specifically, § 1498(a) states:

For purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States.

On this basis, if “a patented invention is used or manufactured for the government by a private party, that private party cannot be held liable for patent infringement.” [264] A generic drug manufacturer asked to produce ciprofloxacin for the government would presumably rely on this affirmative defense.

Notwithstanding § 1498(a), the Hatch-Waxman Act may prevent government use of a patented invention such as CIPRO.

Generally speaking, if a patent is listed in the Orange Book and is not challenged by an ANDA applicant, FDA approval of the ANDA must await patent expiry. If the listed patent is challenged by an ANDA applicant (in a Paragraph IV certification) and an infringement suit is started by the patentee (within 45 days), the 30-month injunction is triggered so as to prevent FDA approval of the ANDA.

In the case of CIPRO, Bayer’s listed patent does not expiry until the end of 2003. Five ANDA applications have received tentative FDA approval (for satisfying safety and effectiveness requirements) but are presently on patent-hold. Thus, the ANDA applications are not yet eligible for final FDA approval. And, without final FDA approval, no one (including a government contractor) can lawfully introduce the new drug into interstate commerce.

Theoretically speaking, had an ANDA applicant been asked to supply ciprofloxacin to the government, it could have filed a Paragraph IV certification alleging non-infringement of Bayer’s patent. This certification would be based on the affirmative defense set out in 28 U.S.C. § 1498(a). In these circumstances, Bayer could respond as follows:

(1) It could commence an infringement suit and thereby trigger the 30-month injunction against FDA approval. If successfully sued, the generic drug manufacturer would probably seek indemnification from the government. [265]

(2) Alternatively, Bayer could decide, within 45 days of receiving the certification, not to start a patent suit and the FDA could immediately approve the ANDA. Based on Bayer’s reaction to Health Canada’s actions, this option seems unlikely.

(3) Irrespective of option (1) or (2), Bayer could commence an action against the government for compensation. If so, the generic drug manufacturer would probably want to protect itself against indemnifying the government. [266]

It follows that, in the pharmaceutical context, the Hatch-Waxman Act may prevent effective recourse to § 1498. As one commentator wrote, regarding the CIPRO/anthrax dispute: “[T]he government was staring at a green light from a 1918 law [§ 1498] and a red light from a 1984 law [Hatch-Waxman Act].” [267]

2. Canada

Similar issues arise in the Canadian context.

Under section 19(1) of the Patent Act, the Commissioner of Patents “may, on application by the Government of Canada or the government of a province, authorize the use of a patented invention by that government.” A government application can be made “in cases of national emergency or extreme urgency or where the use for which the authorization is sought is a public non-commercial use.” [268] In addition, the patentee is entitled to “adequate remuneration in the circumstances, taking into account the economic value of the authorization.”

However, section 19 does not provide an affirmative defense for government contractors. By contrast, section 22(1) of the Defence Production Act provides:

The Minister may, on behalf of Her Majesty, contract with any person that Her Majesty will relieve that person from any claims, actions or proceedings for the payment of royalties for the use or infringement of any patent...by that person in...the performance of a defence contract. [269]

This immunity from patent infringement applies to a “defence contract” with the federal government. [270] The supply of generic drugs to counter a bioterrorist threat would arguably qualify as such a contract.

Notwithstanding the Defence Production Act, the Food and Drugs Act and Patented Medicines Regulations may prevent government use of a patented invention such as CIPRO.

Generally speaking, if a listing in the Patent Register is not contested by a generic manufacturer, a Notice of Compliance for the generic drug must await patent expiry. If a listing is challenged (in a Notice of Allegation) and a Prohibition Proceeding is commenced (within 45 days), the 24-month injunction is triggered against issuance of a Notice of Compliance.

In the case of CIPRO, Bayer’s patent does not expire until 2004. Apotex’ ANDS is currently on patent-hold by the Minister of Health. In addition, the Minister is prohibited by Orders of the Federal Court from issuing a Notice of Compliance to Apotex. Without a Notice of Compliance, no one (including a government contractor) can lawfully sell a new drug in Canada.

Theoretically speaking, had the government asked Apotex to supply ciprofloxacin, Apotex could have filed a Notice of Allegation stating that Bayer’s patent would not be infringed. This allegation would be based on section 22(1) of the Defence Production Act. In these circumstances, Bayer could respond as follows:

(1) Bayer could commence a Prohibition Proceeding and thereby trigger the 24-month injunction against the issuance of a Notice of Compliance. This might be expected if Bayer disputed that a “defence contract” existed.

(2) Alternatively, Bayer could decide, within 45 days of receiving the allegation, to not commence a Prohibition Proceeding. Even so, this would not automatically clear the way for generic entry. The Minister is currently prohibited by Orders of the Federal Court from issuing a Notice of Compliance Apotex. Unless the Orders were set aside, the Minister could not proceed with final approval of Apotex’ drug under the Food and Drugs Act.

It follows that, in the context of the CIPRO/anthrax dispute, the Patented Medicines Regulations and Food and Drugs Act could have prevented any recourse to the Defence Production Act.

V. THE FUTURE OF DRUG PATENT LAWS

As shown in Parts III and IV, drug patent laws in Canada and the United States are deficient in certain respects. First, legal incentives provided to both originators and generic drug manufacturers may be prone to misuse. These are the so-called “triggering” and “marketing” incentives. Second, the drug patent regimes do not contemplate a new, suddenly pressing objective, namely, bioterrorism defense. This Part considers proposals for reform and, particularly, a number of federal bills introduced in the United States.

A. United States

1. Drug Competition Act of 2001

On April 6, 2001, Senator Leahy, Democrat of Vermont and Chair of the Judiciary Committee, introduced a bill called the Drug Competition Act of 2001. [271] The bill responds to some of the antitrust issues under the Hatch-Waxman Act and, particularly, those related to the marketing incentive. [272] On October 18, in the midst of the CIPRO/anthrax dispute, the bill was unanimously approved by the Senate Judiciary Committee. [273]

The bill requires marketing agreements between originator and generic drug manufacturers, such as the Patent Settlement between Bayer and Barr, to be filed with federal authorities. Specifically, the FTC and Department of Justice must be notified of any agreement that “could have the effect of limiting the research, development, manufacture, marketing or selling of a generic drug product that could be approved by the FDA.” [274]

The purposes of doing so are to “enhance the effectiveness and efficiency of the enforcement of the antitrust law of the United States” and “deter pharmaceutical companies from engaging in anticompetitive actions.” [275]

The bill provides a maximum $20,000 fine for violation of its provisions. [276]

Senator Leahy commented on the connection between CIPRO and the Drug Competition Act of 2001: “If we had passed this legislation last year, generic alternatives to Cipro might have been on the market today.” [277]

2. Greater Access to Affordable Pharmaceuticals Act of 2001

On May 1, 2001, Senators Charles Schumer, Democrat of New York, and John McCain, Republican of Arizona, introduced a bipartisan bill called the Greater Access to Affordable Pharmaceuticals (GAAP) Act of 2001. [278] In a joint press release, the Senators state that “by easing the entry of generic alternatives to the marketplace, their legislation could save consumers $71 billion over ten years.” [279] The legislation proposes substantial amendments to the regime put in place by the Hatch-Waxman Act. In particular, the triggering and marketing incentives would be affected.

The purposes of the GAAP Act are twofold. First, the bill seeks “to increase competition, thereby helping all Americans...to have access to affordable medication.” [280] Second, the legislation seeks “to ensure fair marketplace practices and deter pharmaceutical companies (including generic companies) from engaging in anticompetitive action.” [281] The GAAP Act is clearly intended to readjust the Hatch-Waxman balance.

With regard to the triggering incentive (i.e. the automatic injunction available for listed patents), the following adjustments are proposed:

(1) The automatic 30-month injunction is eliminated. To obtain a preliminary injunction, an originator has to apply to the court in the ordinary course. [282]

(2) An originator has to list all of its relevant drug patents for which a “claim of patent infringement could reasonably be asserted.” [283] Upon doing so, the originator must certify to the FDA that the listing of patents is “complete and accurate.” [284]

(3) An ANDA applicant has a greater ability to challenge listed patents. An ANDA applicant has standing to sue for a declaratory judgment with respect to any listed patent. [285] Specifically, the suit would seek a declaration of invalidity or non-infringement of the patent.

(4) An ANDA applicant and an originator both have standing to commence a civil action to determine the “legal status” of any listed patent. [286] For the ANDA applicant, this appears to be a private cause of action for “de-listing” of a patent from the Orange Book. The action has one time restriction: the disputed patent has to be listed for at least one year after the ANDA is filed.

At a structural level, the elimination of the 30-month injunction is most significant and would have an immediate impact on the conduct of litigation under the Hatch-Waxman regime. One thing the bill does not do, however, is ascribe to the FDA any duty to independently review the Orange Book for improperly listed patents.

With regard to the marketing incentive (i.e. the 180-day period of market exclusivity), the proposed adjustments are:

(1) The first ANDA applicant to file a Paragraph IV certification may forfeit the 180-day exclusivity. If so, the next-to-file ANDA applicant will be entitled to the exclusivity period. Forfeiture will occur if the first ANDA applicant:

(a) fails to market its drug within 90 days after obtaining FDA approval;

(b) settles, or is defeated in, patent litigation;

(c) fails to obtain tentative FDA approval (for safety and effectiveness) within 30 months after filing the ANDA;

(d) fails to challenge a new patent within 60 days after being listed in the Orange Book; or

(e) is found by the Secretary of Human Health and Services, in consultation with the FTC, to have “engaged in anticompetitive or collusive conduct.” [287]

(2) The status of patent litigation also affects the 180-day exclusivity. To claim the exclusivity, the ANDA applicant must either: (a) be sued for patent infringement by the originator; or (b) bring its own action against the originator. [288]

(3) The “court decision” trigger is also affected. To trigger the 180-day exclusivity, a court decision (finding the listed patent invalid or not infringed) must be a “final decision...from which no appeal can or has been taken.” [289] Currently, a district court decision can trigger the exclusivity period. The proposed amendment therefore eliminates the period of uncertainty pending appeal of a district court decision. [290]

These amendments would work with the Drug Competition Act of 2001 requiring notification of marketing agreements between originators and generic drug manufacturers.

3. Affordable Prescription Drugs and Medical Inventions Act

On May 3, 2001, Representative Sherrod Brown, Democrat of Ohio, introduced a bill called the Affordable Prescription Drugs and Medical Inventions Act. [291] The bill was referred to House committees for an unspecified period of time. [292]

The bill, though introduced before September 11, addresses issues stirred by the CIPRO/anthrax dispute. The bill seeks to amend the Patent Act to “provide for compulsory licensing of certain patented inventions relating to health.” [293] The Secretary of Human Health and Services could authorize use of a patent without consent of the patentee provided that a “determination” was made to justify the action. [294] An eligible “determination” is a finding that use of the patent is “necessary to alleviate health or safety needs.” [295] In addition, a compulsory license would be available only where a license on “reasonable commercial terms” could not be obtained. [296] The patentee would also be entitled to “adequate remuneration for use of the patent.” [297]

The bill effectively proposes a “health” exception to patent protection. This issue is directly related to an ongoing debate under the TRIPS Agreement—namely, in what circumstances can patents be broken for “public health” reasons. [298] Recognizing the relevance of the international agreement, the bill proposes that regulations be adopted to ensure “consistency with TRIPS.” [299]

The TRIPS debate was most recently addressed at the Fourth World Trade Organization (WTO) Ministerial Conference, held from November 9-14 in Doha, Qatar. [300] India, Brazil, and a group of 60 African countries sought a “public health” exception to the patent rules in the TRIPS Agreement. [301] Under the exception, a nation could take measures to protect public health without restriction under the TRIPS Agreement. The exception would address epidemics such as AIDS, tuberculosis, and malaria. The CIPRO/anthrax dispute in Canada and the United States was also cited in support of this position. [302] The United States, Canada, Japan, and Switzerland opposed the broad exception on the basis that it would undermine the TRIPS Agreement and be prone to misuse in non-emergency situations. [303]

The Ministerial Conference ended with the signing of the “Declaration on the TRIPS agreement and public health.” [304] Although not recognizing a broad “public health” exception, the Declaration did affirm the right of a Member State to grant compulsory licenses and the freedom to determine what constitutes a national emergency. [305] These issues remain the subject of ongoing negotiations.

It follows that the United States position under the TRIPS Agreement will likely affect domestic support (or lack thereof) for Representative Brown’s bill.

B. Canada

In Canada, while legislation is not currently pending, proposals have been made to reform the Patented Medicines Regulations.

In 2001, the Canadian Drug Manufacturers Association (“CDMA”), which represents Canada’s generic drug industry, commissioned researchers at Queen’s University to prepare a study called Timely Access to Generic Drugs: Issues for Health Policy in Canada . [306] The study considered how long it takes to bring a generic drug to market in Canada with particular emphasis on legislative and regulatory factors that may delay timely entry. The study noted that, under the Patented Medicines Regulations, 55 Prohibition Proceedings were decided between March 1998 and March 2001. Of those, 45 cases found that the generic drug in question did not infringe a valid patent. Citing those statistics, along with the automatic 24-month injunction, the study found that Canada’s public health system “has to absorb drug costs unnecessarily while corporations and government dance around the [Patented Medicines] regulations.” [307] A number of policy options were also suggested to improve access to generic drugs and decrease health care costs. Among these was the removal of the Patented Medicines Regulations in their entirety. [308]

On May 17, 2001, Jim Keon, president of the CDMA, testified before the parliamentary Standing Committee on Industry, Science and Technology. [309] He urged the Canadian government to adopt legislation similar to the GAAP Act—namely, to eliminate the automatic injunction under the Patented Medicines Regulations. The elimination of the automatic injunction would, as in the United States, have a significant impact on the conduct of an originator’s suit. Indeed, the impact may be more acutely felt by Canadian originators. As the Federal Court of Appeal recently acknowledged, there is a general “reluctance to grant interlocutory injunctions in patent infringement actions.” [310]

VI. CONCLUSION

The bipartisan support for the GAAP Act and the Senate’s approval of the Drug Competition Act of 2001 suggest that important changes lie ahead for drug manufacturers. Theses changes respond to the transformation of the Hatch-Waxman balance into the Hatch-Waxman paradox . In particular, the proposed elimination of the automatic injunction would go a long way toward halting improper listing strategies. As for the marketing incentive, the possibility of forfeiture by an ANDA applicant would render collusion amongst manufacturers less likely. Moreover, reform in the United States is likely to gain political support north of the free trade border.

As well, in the wake of September 11, developments at the world trade level—regarding the TRIPS Agreement—will continue to affect national debate. As the CIPRO/anthrax dispute shows, the need to protect public health in the event of a serious bioterrorist attack may not be compatible with the fullest patent protection. Looking ahead, and with the lessons learned from CIPRO, perhaps we will feel better soon about our drug patent laws. In change we trust.


[1] Daniel Akst, It’s Time for Teamwork on New Drugs , N.Y. TIMES , November 4, 2001, § 3, at 4. The column continued:

Until recently, at least, bioterror didn’t strike every day, so the case of Cipro seems a special one. But, in fact, it is only the latest episode in a long-running melodrama of dysfunctional family life—the family ties in this case being the uneasy marriage of government and the pharmaceutical industry.

[2] Eric Reguly, Tobin, Collenette and Rock do the Monster Mash , GLOBE AND MAIL , October 30, 2001, at B13.

[3] NBC News Transcripts, Today Show (7:00 AM ET), Tommy Thompson discusses the anthrax problem , October 17, 2001.

[4] See Richard J. Findlay, Originator Drug Development , 54 FOOD & DRUG L.J . 227, 227 (1999). The author summarizes the various phases of originator drug development as follows:

[D]uring the early research and preclinical testing period, the originator performs pharmacological screening and tests on pharmacodynamics, phamoacokinetics, toxicokinetics, acute toxicity, subchronic toxicity, and genotoxicity prior to applying for investigational new drug (IND) status. During the clinical testing period, originators conduct tests for safety in Phase I, efficacy in Phase II, and for side effects and long-term use effects in Phase III (testing such things as chronic toxicity, carcinogenicity, reproductive toxicity, additional genotoxicity, and special toxicity) prior to submitting a new drug application (NDA) and receiving Food and Drug Administration (FDA) approval. After FDA approval, postmarketing testing continues in Phase IV for, inter alia , side effects, clinical education, and possible new indications.

The period of originator drug development is based on the following breakdown: Preclinical testing (30 to 57 months); Phase I (10 to 18 months); Phase II (21 to 35 months); Phase III (28 to 55 months); and FDA approval (6 to 114 months). Id.

[5] Therapeutic equivalence indicates that the two brands contain the same active or therapeutic ingredient though not necessarily the same inactive ingredients.

[6] Richard J. Findlay, Originator Drug Development , 54 FOOD & DRUG L.J . 227, 229 (1999). The author summarizes the various stages of generic drug development as follows:

The generic drug development process can take three to five years, with the abbreviated new drug application (ANDA) approval process being the greatest time variable. ... In a typical generic product development cycle, a generic company commits resources to target a product three to five years before the originator patent expires. Product development usually takes six to eighteen months, with bioequivalence testing taking another six to twelve months. ANDA approval takes approximately eighteen to thirty months... . [notes omitted]

In terms of its commercial commitment, a generic manufacturer is required to make or purchase the active ingredient in the drug, come up with a formulation for its drug, conduct product testing, and set product standards. Id. at 229.

[7] CONGRESSIONAL BUDGET OFFICE, HOW INCREASED COMPETITION FROM GENERIC DRUGS HAS AFFECTED PRICES AND RETURNS IN THE PHARMACEUTICAL INDUSTRY viii, 13 (1998).

[8] Id . at ix.

[9] Id . at xiii.

[10] Current Issues Impacting the Pharmaceutical Industry, Before the Health Subcomm. of the House Energy and Commerce Committee , 106th Cong. 4 (June 13, 2001) (statement of Bruce L. Downey, Chair, Barr Laboratories, Inc.).

[11] Competition in the Pharmaceutical Industry, Before the Senate Committee on Commerce, Science, and Transportation 1 (April 23, 2002) (statement of Timothy J. Muris, Chair, Federal Trade Commission).

[12] MALCOLM ANDERSON & KAREN PARENT, TIMELY ACCESS TO GENERIC DRUGS: ISSUES FOR HEALTH POLICY IN CANADA 10 (2001).

[13] Id .

[14] Canadian Drug Manufacturers Association, Industry Facts, at http://www.cdma-acfpp.org

/resourcecentre/industryfacts.shtml.

[15] MALCOLM ANDERSON & KAREN PARENT, TIMELY ACCESS TO GENERIC DRUGS: ISSUES FOR HEALTH POLICY IN CANADA 10 (2001).

16 Id . at 12.

[17] 21 U.S.C. § 355(a). A “new drug” is defined as: (1) any drug not generally recognized by experts “as safe for use under the conditions prescribed, recommended, or suggested in the labeling thereof”; or (2) any drug generally recognized as safe but not yet “used to a material extent or for a material time.” Federal Food, Drug, and Cosmetic Act of 1938, § 201(p)(1) (codified at 21 U.S.C. §321(p)(1)).

An originator drug and a generic version of an originator drug are both considered “new drugs” as defined by 21 U.S.C. § 321(p)(1). United States v. Generix Drug Corp., 460 U.S. 455 (1983). See also, in the Canadian context, Food and Drug Regulations, C.R.C., ch. 870, § C.08.001(a) (1978) (Can.).

[18] The FDA is authorized to regulate the production, distribution, and sale of drugs in the United States. 21 U.S.C. §§ 321-397.

[19] 21 U.S.C. §§ 301 et seq .

[20] Pub. L. No. 75-717, 52 Stat. 1040 (1938) (codified as amended at 21 U.S.C. §§ 301 et seq . (1994)). See generally PETER BARTON HUTT & RICHARD A. MERRILL, FOOD AND DRUG LAW 475-487 (2d ed. 1991) (summarizing the history of the new drug, premarket approval requirements under the Federal Food, Drug, and Cosmetic Act).

[21] The current requirements for an NDA are set out in 21 U.S.C. § 355(b)(1).

[22] Federal Food, Drug, and Cosmetic Act of 1938, Pub. L. No. 75-717, 52 Stat. 1040, § 505(a) (1938). See generally Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 272 (1985) (summarizing the statutory history of the new drug approval process).

[23] Pub. L. No. 87-781, 76 Stat. 780 (1962).

[24] Federal Food, Drug, and Cosmetic Act, Pub. L. No. 75-717, 52 Stat. 1040, § 505(b) (1938) (codified as amended at 21 U.S.C. § 355(b)). See Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 273 (1985); PETER BARTON HUTT & RICHARD A. MERRILL, FOOD AND DRUG LAW 477-478 (2d ed. 1991); H.R. NO . 98-857, Part I, at 16 (1984).

[25] Pub. L. No. 87-781, 76 Stat. 780 (1962). See Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 273-274 (1985); PETER BARTON HUTT & RICHARD A. MERRILL, FOOD AND DRUG LAW 478 (2d ed. 1991). The drugs that were the subject of these NDAs are referred to throughout as the “pre-1962, originator drugs.”

[26] The DESI program is described succinctly in Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 273 (1985):

Under this program, FDA contracted with the National Academy of Sciences (NAS), which established expert panels to review available evidence of effectiveness and provide recommendations to the agency. The NAS safety and effectiveness determinations under the DESI program were based on published scientific literature and other publicly available data.

See also PETER BARTON HUTT & RICHARD A. MERRILL, FOOD AND DRUG LAW 481 (2d ed. 1991); H.R. NO . 98-857, Part I, at 16 (1984). The DESI program was based on public data because unpublished data relating to safety and effectiveness was, and continues to be, treated by the FDA as confidential and proprietary to the NDA applicant. See Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 275 (1985).

[27] Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 275 (1985); H.R. NO . 98-857, Part I, at 16 (1984).

[28] 34 Fed. Reg. 2673 (1969); 25 Fed. Reg. 6574 (1970). The current requirements for an ANDA are set out in 21 U.S.C. § 355(j).

[29] A generic drug is bioequivalent to an originator drug if the rate and extent of absorption of the generic drug do not show a significant difference from the rate and extent of absorption of the originator drug when administered in specified quantities and conditions. 21 U.S.C. § 355(j)(8)(A); 21 C.F.R. § 320.1(e).

[30] Bioavailability refers to the rate and extent to which the active ingredient in a drug is absorbed and becomes available at the site of drug action. 21 U.S.C. § 355(j)(8)(A); 21 C.F.R. § 320.1(a).

[31] H.R. NO . 98-857, Part I, at 16 (1984).

[32] A paper “NDA” is typically filed by a generic drug manufacturer. A paper NDA has to meet all of the same requirements as an NDA. However, a paper NDA can do so by relying on published reports of clinical investigations conducted by third parties. These investigations must still show the safety and effectiveness of the drug under consideration. The paper NDA procedure was introduced by the FDA in 1978. See Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 277 (1985); PETER BARTON HUTT & RICHARD A. MERRILL, FOOD AND DRUG LAW 484 (2d ed. 1991).

In 1984, the FDA estimated that published reports, capable of satisfying paper NDA requirements, were not available for 85 percent of all post-1962 drugs. At the same time, there were approximately 150, post-1962 originator drugs that were no longer subject to patent protection but for which no generic version existed. H.R. NO . 98-857, Part I, at 16-17 (1984).

[33] Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified as amended at 21 U.S.C. §§ 355, 360cc (1994) and 35 U.S.C. §§ 156, 271(e), 282 (1994)).

[34] The Act was co-sponsored by Senator Orrin Hatch, Republican of Utah, and Representative Henry Waxman, Democrat of California.

[35] Reference is often made to Abbott Labs v. Young, 920 F.2d 984, 991 (D.C. Cir. 1990), cert. denied , 402 U.S. 819 (1991) where the two goals were described as follows: “to induce name-brand pharmaceutical firms to make the investments necessary to research and develop new drug products, while simultaneously enabling competitors to bring cheaper, generic copies of those drugs to market.”

[36] H.R. NO . 98-857, Part I, at 14 (1984). Title I also created exclusive marketing rights for certain new drugs approved by the FDA (“market exclusivity”). For NDAs approved after passage of the Hatch-Waxman Act, Title I created five-year and three-year market exclusivities. Five-year exclusivity is granted to an NDA that contains a New Chemical Entity (NCE). An NCE is a drug whose active ingredient has not been previously approved by the FDA. For five years after approval of the NCE, the FDA cannot accept an NDA or ANDA containing the same active ingredient. 21 U.S.C. § 355(j)(5)(D)(ii); 21 C.F.R. § 314.108. Three-year exclusivity is granted to an NDA or supplemental NDA containing new clinical data (but not an NCE). The new data, which generally pertains to a change in a previously approved drug, must be essential to FDA approval. For three years after approval of the new clinical data, the FDA cannot approve (though it may accept and review) an NDA or ANDA for the same drug. 21 U.S.C. § 355(j)(5)(D)(iii); 21 C.F.R. § 314.108. See generally Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 286-292 (1985); Elizabeth H. Dickinson, FDA’s Role in Making Exclusivity Determinations , 54 FOOD & DRUG L.J ., 195, 200-201 (1999).

Title I, relating to the abbreviated approval process for generic drugs, 21 U.S.C. § 355, has been judicially described as the “stick” portion of the Hatch-Waxman Act. Watson Pharm., Inc. and Danbury Pharmacal, Inc. v. Henney, Civil Action No. 00-3516, 2001 U.S. Dist. LEXIS 2477 (D.Md. Jan. 18, 2001).

[37] H.R. NO . 98-857, Part I, at 15 (1984). A detailed discussion of Title II, 35 U.S.C. § 156, is beyond the scope of this paper. Briefly stated, drug patents are eligible for a maximum five-year extension once FDA approval is obtained. However, once the patented drug is approved by the FDA, the remaining original patent term cannot be extended beyond 14 years. Other restrictions are: (1) only one patent can be extended for any given drug; (2) a patent can be extended only once; and (3) an extension is only available for the first approved commercial marketing or use of any given drug. Subject to the foregoing, the extension itself is calculated by adding one-half of the time spent on premarket testing to all of the time spent on premarket FDA approval. See generally Edward Hore, A Comparison of United States and Canadian Laws as They Affect Generic Pharmaceutical Market Entry , 55 FOOD & DRUG L.J . 373, 377-378 (2000); Ellen J. Flannery & Peter Barton Hutt, Balancing Competition and Patent Protection in the Drug Industry: The Drug Price Competition and Patent Terms Restoration Act of 1984 , 40 FOOD DRUG COSMETIC L.J . 269, 302-307 (1985); Terry Mahn, The Hatch-Waxman Act During Patent Prosecution and Beyond , 54 FOOD & DRUG L.J . 233, 246-247 (1999).

Title II, relating to patent term extensions, 35 U.S.C. § 156, has been judicially described as the “carrot” portion of the Hatch-Waxman Act. Pharmacal, Inc. v. Henney, Civil Action No. 00-3516, 2001 U.S. Dist. LEXIS 2477 (D.Md. Jan. 18, 2001).

[38] 35 U.S.C. §§ 1-376.

[39] The provisions pertaining to the filing and contents of NDAs are set out at 21 U.S.C. § 355(b). Those pertaining to ANDAs are set out at 21 U.S.C. § 355(j).

[40] 21 U.S.C. § 355(b)(1). Process patents are not eligible for listing.

[41] 21 U.S.C. §§ 355(b)(1), 355(j)(7)(A)(iii); 21 C.F.R. § 314.53(c)(2) (2001). The Orange Book is officially called the “Approved Drug Products with Therapeutic Equivalence Evaluations.”

[42] 21 C.F.R. § 314.94(a)(12)(vi).

[43] 21 U.S.C. § 355(j)(1). It is recalled that a “paper NDA” is also an option for manufacturers seeking approval of a generic drug.

[44] 35 U.S.C. § 271(e)(1). The provision states: “It shall not be an act of infringement to make, use, offer to sell, or sell...a patented invention...solely for purposes related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs....” This provision is referred to as the “Bolar exemption” for overruling the decision in Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858 (D.C. Cir. 1984), cert denied , 469 U.S. 856 (1984). The decision held that a generic manufacturer’s development activities (necessary to obtain FDA approval) infringed an extant drug patent. Specifically, the common law defense of “experimental use” was held not to apply to the activities in question. See generally Alfred B. Engelberg, Special Patent Provisions for Pharmaceuticals: Have They Outlived Their Usefulness? 39 IDEA 389 (1999) (detailing the history of the Bolar exemption both pre- and post-1984); Courtenay Brinckerhoff, Can the Safe Harbor of 35 U.S.C. § 271(e)(1) Shelter Pioneer Drug Manufacturers?, FOOD & DRUG L.J. 643 (1998) (detailing the nature and scope of the Bolar exemption in terms of the patents, activities, and persons caught by the exemption).

[45] 35 U.S.C. § 271(e)(2)(A). The provision states: “It shall be an act of infringement to submit an...[an ANDA]...for a drug claimed in a patent or the use of which is claimed in a patent...”

[46] 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV). In addition, with respect to a method-of-use patent, an ANDA applicant can state that it seeks generic approval for a use not covered by the patent. This is known as a “Section viii Statement.” Id . § 355(j)(2)(A)(viii).

[47] 21 C.F.R. § 314.94(a)(12)(A)(vii).

[48] 21 U.S.C. § 355(j)(5)(B)(i). The approval is conditional on all safety and effectiveness requirements also being met.

[49] 21 U.S.C. § 355(j)(5)(B)(ii).

50 The Court of Appeals for the District of Columbia has described the Paragraph IV certification process as “far from a model of legislative draftsmanship.” Mova Pharmaceutical Corp. v. Shalala, 140 F.3d 1060, 1069 (D.C. Cir. 1998). One commentator described the process as “the most complicated to administer, as it starts innovator drug companies, generic drug companies, and FDA down a long, sometimes tortuous, road to approval.” Elizabeth H. Dickinson, FDA’s Role in Making Exclusivity Determinations , 54 FOOD & DRUG L.J ., 195, 197 (1999).

51 21 U.S.C. § 355(j)(2)(B)(1); 21 C.F.R. § 314.95(c)(6) (2001). Generally speaking, the patents most often challenged by Paragraph IV certifications are formulation and method-of-use patents. Competition in the Pharmaceutical Industry, Before the Senate Committee on Commerce, Science, and Transportation 7 (April 23, 2002) (statement of Timothy J. Muris, Chair, Federal Trade Commission).

[52] 21 U.S.C. § 355(j)(5)(B)(iii).

53 21 U.S.C. § 355(j)(5)(B)(iii). At the end of the 30 months, if the patent litigation is still not resolved but the FDA has approved the ANDA, the generic manufacturer can start marketing its product. However, in most cases, it appears that a generic manufacturer would not do so, due to the potential liability for damages should the patentee ultimately prevail. See Elizabeth H. Dickinson, FDA’s Role in Making Exclusivity Determinations , 54 FOOD & DRUG L.J ., 195, 198 (1999).

54 The court may lengthen or shorten the 30-month injunction if “either party has failed to reasonably cooperate in expediting the action.” 21 U.S.C. § 355(j)(5)(B)(iii). The injunction also does not apply if, in less than 30 months, the patent expires or a court decides that the patent is invalid or not infringed. 21 U.S.C. § 355(j)(5)(B)(iii); 21 C.F.R. § 314.107(b)(1)(iv) (2001).

[55] 21 U.S.C. § 355(j)(5)(B)(iii). See also Declaratory Judgment Act, 28 U.S.C. § 2201.

[56] 21 C.F.R. § 314.53(f) (2001).

[57] Id .

[58] Id .

[59] American Bioscience Inc. v. Thompson, 269 F.3d 1077, 1084 (D.C. Cir. 2001) According to the FDA, it “does not have the expertise to review patent information.” 59 Fed. Reg. 50,338, 50,343 (Oct. 3, 1994).

[60] Competition in the Pharmaceutical Marketplace: Antitrust Implications of Patent Settlements, Before the Senate Committee on the Judiciary , 107th Cong. at (May 24, 2001) (statement of Molly Boast, Director, Bureau of Competition, Federal Trade Commission).

[61] 21 U.S.C. § 355(j)(5)(B)(iv). The 180-day exclusivity, described by one court as an “Edenic moment of freedom form the pressures of the marketplace,” has turned out to be one of most controversial provisions in the Hatch-Waxman Act. Mova Pharmaceutical Corp. v. Shalala, 140 F.3d 1070 at 1064 (D.C. Cir. 1998). Two key issues are worthy of note.

First, there has been significant debate surrounding the circumstances in which the 180-day period can be triggered. The FDA had taken the position that the first ANDA applicant, in order to be eligible for the 180-day exclusivity, must successfully defend a patent infringement action. In the FDA’s view, this requirement was necessary to avoid absurd results. For instance, the first ANDA applicant might never be sued by the patentee and, therefore, might never bear the costs of patent litigation. In such circumstances, according to the FDA, the granting of the 180-day exclusivity would be inconsistent with the rationale for creating the provision in the first place. However, the FDA’s position was rejected by the courts on the basis that the statutory language plainly does not require that the ANDA applicant win a patent suit. Mova Pharmaceutical Corp. v. Shalala, 140 F.3d 1070 at 1064 (D.C. Cir. 1998).

Second, the 180-day exclusivity has used in anticompetitive ways. The Federal Trade Commission has investigated a number of cases in which originators and generic drug manufacturers have “colluded” to use the exclusivity period to their mutual benefit. See infra Part III.B.3.

[62] 21 U.S.C. § 355(j)(5)(B)(iv)(I).

[63] The FDA interprets the term “court” in 21 U.S.C. §§ 355(j)(5)(B)(iii) and 355(j)(B)(iv) to mean “the first court that renders a decision finding the patent at issue invalid, unenforceable, or not infringed. When it is the district court that renders such a decision, FDA may approve the ANDA as of the date the district court enters its decision.” Food and Drug Administration, Office of Generic Drugs, Center for Drug Evaluation and Research, Guidance for Industry, Court Decisions, ANDA Approvals, and 180-Day Exclusivity Under the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act, 65 Fed. Reg. 16, 922-23 (2000).

[64] 21 U.S.C. § 355(j)(5)(B)(iv)(II).

[65] A “new drug” is defined, in part, as: “a drug that contains or consists of a substance, whether as an active or inactive ingredient, carrier, coating, excipient, menstruun or other component, that has not been sold as a drug in Canada for sufficient time and in sufficient quantity to establish in Canada the safety and effectiveness of that substance for use as a drug.” Food and Drug Regulations, C.R.C., ch. 870, § C.08.001(a) (1978) (Can).

[66] R.S.C., ch. F-27 (1985) (Can.).

[67] C.R.C., ch. 870, §§ C.08.001-C.08.009 (1978) (Can.).

[68] SOR/93-133 (1993) (Can.), as amended SOR/98-166 (1998) (Can.) and SOR/99-139 (1999) (Can.).

69 S.C., ch. 23, § 17 (1923) (Can.). Section 17 of the Patent Act (Can.) then provided: “In the case of any patent for an invention intended for or capable of being used for the preparation or production of food or medicine, the Commissioner shall, unless he sees good reason to the contrary, grant to any person applying for the same, a licence limited to the use of the invention... .”

[70] See generally Sheldon Burshtein, Sublicense or Supply Agreement? , 54 FOOD & DRUG L.J . 73, 74-76 (1999) (detailing the history of Canadian patent laws applicable to medicines); Edward Hore, A Comparison of United States and Canadian Laws as They Affect Generic Pharmaceutical Market Entry , 55 FOOD & DRUG L.J . 373, 381-187 (2000) (providing an overview of Canadian law regarding generic drug approvals).

In a submission to the World Trade Organization, the Government of Canada described the impact of compulsory licensing as follows:

By providing competition for patented medicines during the term of protection, the compulsory licensing system had become an important policy tool for cost containment in Canada’s public health care system during this period. It had been estimated that, during its currency, compulsory licensing saved Canadian consumers of prescription medicines and the third parties who might have paid for them many millions of dollars each year in health care costs by opening the market to competitively priced medicines during the period of patent protection. [notes omitted]

WTO Dispute Panel Report on EC Complaint, Canada-Patent Protection of Pharmaceutical Products, WT/DS114/R, at 35 (March 17, 2000).

[71] The terms “medicine” and “drug” have specific meanings in the Canadian regulatory and statutory context. A “drug” is the subject of a Notice of Compliance issued by the Minister under the Food and Drugs Act. A Notice of Compliance is issued only if the “drug” (e.g. formulated tablet, capsule, etc.) is shown to be safe and effective. A “medicine” is the subject of a patent, which may include compound claims, pharmaceutical composition claims, process claims, etc. A single patented “medicine” could be developed into several “drugs,” each of which would be the subject of a different Notice of Compliance. Hoffmann-La Roche Ltd. v. Canada (Minister of National Health & Welfare) (1995), 62 C.P.R. (3d) 58, 70 (F.C.T.D.), aff’d , (1995) 69 C.P.R. (3d) 25 (note) (F.C.A.); Novopharm Limited v. Canada (Minister of National Health and Welfare) (1998), 78 C.P.R. (3d) 54, ¶ 21 (F.C.T.D.).

Similarly, under United States law, a “drug” has contextual meanings: (1) a drug that is claimed by a patent refers to an active ingredient or compound; and (2) a drug that is claimed by an NDA or ANDA refers to a finished dosage form product (e.g. formulated tablet, capsule, etc.). Terry Mahn, The Hatch-Waxman Act During Patent Prosecution and Beyond , 54 FOOD & DRUG L.J . 233, 252 (1999); 21 C.F.R. § 314.3(b).

[72] S.C., ch. 49 (1968-69) (Can.).

[73] Section 41(4) of the Patent Act (Can.) then provided:

Where, in the case of any patent for an invention intended or capable of being used for medicine or for the preparation or production of medicine, an application is made by any person for a licence to do one or more of the following... :

the Commissioner shall grant to the applicant a licence to do the things specified in the application except such, if any, of those things in respect of which he sees good reason not to grant such a licence... . [emphasis added]

[74] See Sheldon Burshtein, Sublicense or Supply Agreement? , 54 FOOD & DRUG L.J . 73, 74 (1999).

[75] HARRY C. EASTMAN, REPORT OF THE COMMISSION OF INQUIRY ON THE PHARMACEUTICAL INDUSTRY 19-20 (1985). In the later years of the regime, royalties were sometimes six percent of the final selling price or 15 percent of the bulk selling price of the medicine. See Sheldon Burshtein, Sublicense or Supply Agreement? , 54 FOOD & DRUG L.J . 73, 74 (1999).

76 S.C., ch. 41 (1987) (Can.). The 1987 amendments were based on the recommendations of a Royal Commission established by the federal government to report on the pharmaceutical industry in Canada. HARRY C. EASTMAN, REPORT OF THE COMMISSION OF INQUIRY ON THE PHARMACEUTICAL INDUSTRY 19 (1985).

[77] R.S.C., ch. P-4, §§ 39-39.26 (1985) (Can.) (now repealed). In addition, the Patented Medicines Prices Review Board (PMRB) was created to regulate the price of originator drugs in Canada. R.S.C., ch. P-4, §§ 79-100 (1985) (Can.), as amended. The PMRB limits the introductory prices of originator drugs as well as price increases for originator drugs that are already on the market. HEALTH CANADA, HEALTH CARE POLICY DIVISION, DRUG COSTS IN CANADA, PART III: DRUG PRICES (1997).

[78] HARRY C. EASTMAN, REPORT OF THE COMMISSION OF INQUIRY ON THE PHARMACEUTICAL INDUSTRY 28 (1985).

[79] Id. at 28.

[80] Id . at 28-29.

[81] Id . at 28-29. Section C.08.002(2) of the Food and Drug Regulations (Can.) sets out the required contents of an NDS. In particular, an NDS must contain “detailed reports of the tests made to establish the safety of the new drug for the purpose and under the conditions of use recommended” as well as “substantial evidence of the clinical effectiveness of the new drug for the purpose and under the conditions of use recommended.” Food and Drug Regulations, C.R.C., ch. 870, §§ C.08.002(2)(g), C.08.002(2)(h) (1978) (Can.).

[82] HARRY C. EASTMAN, REPORT OF THE COMMISSION OF INQUIRY ON THE PHARMACEUTICAL INDUSTRY 30 (1985).

[83] Id .

[84] Edward Hore, A Comparison of United States and Canadian Laws as They Affect Generic Pharmaceutical Market Entry , 55 FOOD & DRUG L.J . 373, 383 (2000).

[85] Id .

[86] Section C.02.002.1(2) of the Food and Drug Regulations (Can.) sets out the required contents of an ANDS. In particular, an ANDS must show that the generic drug is the “pharmaceutical equivalent of” and “bioequivalent with” a “Canadian reference product” (e.g. originator drug already approved for sale in Canada). Food and Drug Regulations, C.R.C., ch. 870, § C.08.002.1(2) (1978) (Can.).

[87] Canada, the United States, and Mexico finished negotiating the North American Free Trade Agreement (NAFTA) on December 17, 1992. NAFTA came into effect on January 1, 1994. S.C., ch. 15 (1993) (Can.). Article 1709 of NAFTA provides that “patents shall be available and patent rights enjoyable without discrimination as to the field of technology.”

[88] In December, 1991, as part of the Uruguay Round of world trade negotiations, the draft text of the Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) was released. The TRIPS Agreement, which came into effect in Canada and the United States on January 1, 1996, limits the circumstances in which compulsory licenses may be issued by Member States. Article 31 of the TRIPS Agreement provides that compulsory licenses can only be issued where certain conditions are met, including: (1) a prior attempt is made to obtain a voluntary license from the patentee; and (2) adequate remuneration is provided to the patentee. More flexibility is available in the case of compulsory licenses to remedy anti-competitive behavior or to deal with a national emergency. TRIPS Agreement, April 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND vol. 31, 33 I.L.M. 81 (1994).

[89] Patent Act Amendment Act, 1992, S.C., ch. 2 (1993) (Can.). Compulsory licenses granted before December 20, 1991 were grandfathered. The Patent Act Amendment Act “was drafted in order to protect innovator pharmaceutical companies’ distribution and sales rights to patented drugs and represents a reversal of government policy adopted by Parliament in 1923.” Apotex Inc. v. Canada, [1994] 1 F.C. 742 at 754 (C.A.), appeal dismissed , [1994] 3 S.C.R. 1100.

[90] In a submission to the World Trade Organization, the Government of Canada described this objective as follows:

One such objective [of the Patent Act Amendment Act] was to find another policy tool to address cost containment in the health care system, to the extent permitted under Canada’s new obligations. This objective had arisen out of the concern that expenditures on therapeutic drugs had been rising steadily for several years, and had been becoming very significant. In 1975, the annual cost had been $1.1 billion, but by 1992-93 it had risen to $8.6 billion. Consequently, the Government had determined that, while providing the level of patent protection contemplated by the international treaties, it should also enact measures to provide balance in the post-expiry market, as contemplated by Articles 7 and 30 of the TRIPS Agreement, to address the concern about the costs to the health care system that such enhanced protection would entail. [notes omitted]

WTO Dispute Panel Report on EC Complaint, Canada-Patent Protection of Pharmaceutical Products, WT/DS114/R, at 36 (March 17, 2000).

[91] Patent Act, R.S.C., ch. P-4, § 55.2(1) (1985). The provision states: “It is not an infringement of a patent for any person to make, construct, use or sell the patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada , a province or a country other than Canada that regulates the manufacture, construction, use or sale of any product.” [emphasis added]

[92] Patent Act, R.S.C., ch. P-4, § 55.2(2) (1985) (now repealed). This provision previously stated: “It is not an infringement of a patent for any person who makes, constructs, uses or sells a patented invention in accordance with subsection [55.2](1) to make, construct or use the invention, during the applicable period provided for by the regulations, for the manufacture and storage of articles intended for sale after the date on which the term of the patent expires.”

[93] On November 11, 1998, the European Communities and their Member States requested that a Dispute Panel be established by the World Trade Organization to determine whether Canada’s “Bolar exemption” and “stockpiling exemption” were consistent with the TRIPS Agreement. In a Report dated March 17, 2000, the Panel concluded that the “Bolar exemption” was compatible with the TRIPS Agreement but that the “stockpiling exemption” was not. WTO Dispute Panel Report on EC Complaint, Canada-Patent Protection of Pharmaceutical Products, WT/DS114/R, at 146 et seq . (March 17, 2000).

[94] Patent Act, R.S.C., ch. P-4, § 55.2(4) (1985).

[95] SOR/93-133 (1993) (Can.), as amended SOR/98-166 (1998) (Can.) and SOR/99-139 (1999) (Can.).

[96] SOR/93-133, Canada Gazette Part II, Vol. 127. No. 6, March 12, 1993, at 1388. The Regulatory Impact Analysis Statement is appended to the Patented Medicines Regulations but id not officially part of the Regulations.

[97] This “linkage” regime, and the difficulties engendered by it, were described by the Federal Court of Appeal in Merck Frosst v. Canada (Minister of National Health and Welfare) (1994), 55 C.P.R. (3d) 302, 304:

In this appeal, this court is again called upon to struggle with the difficult task of interpreting the newly adopted Patented Medicines (Notice of Compliance) Regulations , SOR/93-133. In large measure, the difficulty is due to the fact that those regulations, whose clear intention is to facilitate the protection of private commercial patent rights, have been grafted onto a regulatory scheme, the Food and Drug Regulations , C.R.C. 1978, c. 870, am amended, whose sole purpose is the protection of public health and safety. The union is not a happy one.

[98] Food and Drug Regulations, C.R.C., ch. 870, § C.08.002(2) (1978) (Can.).

[99] Patented Medicines Regulations, SOR/93-133, § 4(1) (1993) (Can.). The Regulations refer to the originator as the “first person.” Id . § 4(1).

[100] Id . § 4(2)(b). Only the owner or exclusive licensee of the patent can submit patent information to the Minister. Otherwise, the person must have the consent of the patent owner to list the patent. Id . § 4(2)(c).

[101] Id . § 4(4). The patent application must also have a filing date that is earlier than the filing date of the NDS.

[102] Id . § 3(1).

[103] Id . § 3(4).

[104] In Novopharm Limited v. Canada (Minister of National Health and Welfare) (1998), 78 C.P.R. (3d) 54, ¶ 19 (F.C.T.D.), the Minister’s duty was described as follows:

The Minister’s duty is to keep the Register and to administer the Regulations. It is not a duty which sits lightly with a Minister whose primary function is the protection of public health and safety since these Regulations have nothing to do with that subject and everything to do with the regulation of the conflictual relationships between brand name and generic drug manufacturers. The duty is, however, cast upon him by the Regulations and he must carry it out fairly and even-handedly. That may involve drawing the attention of persons who submit documents to what the Minister conceives of as defects or errors in those documents; it most certainly does not involve the Minister taking upon himself the task of making corrections or modifications in such documents or of interpreting them so as to make them conform with what the Minister conceives of as being the law.

[105] The definition of “Canadian reference product” includes a “drug in respect of which a notice of compliance is issued...and which is marketed in Canada by the innovator of the drug.” Food and Drug Regulations, C.R.C., ch. 870, § C.08.001.1(a) (1978) (Can.).

[106] A “comparison” between a generic drug and an originator drug is made in order to establish that the former is bioequivalent to the latter.

[107] Patented Medicines Regulations, SOR/93-133, § 5(1) (1993) (Can.). The Regulations refer to the generic manufacturer as the “second person.”

[108] Id . §§ 5(1)(a)-(b).

[109] Id . § 5(1)(b).

[110] Id . § 5(3)(a)-(c).

[111] Id . § 6(1).

[112] It is recalled that a new drug (whether generic or originator) is approved for sale by the Minister upon issuance of a document known as a Notice of Compliance.

[113] The issuance of a Notice of Compliance at this point would occur only if all requirements of safety and effectiveness were also met.

[114] The automatic injunction was originally for 30 months but was shortened to 24 months following amendments to the Patented Medicines Regulations (Can.) on March 12, 1998.

[115] The court can shorten or lengthen the 24-month injunction if the originator or generic manufacturer, respectively, has “failed...to reasonably cooperate in expediting” the Prohibition Proceeding. Patented Medicines Regulations, SOR/93-133, § 7 (1993) (Can.). The 24-month injunction does not apply if, in less than 24 months, the patent expires or the Prohibition Proceeding is dismissed, withdrawn, or discontinued. Id . § 7(4). The injunction also does not apply if a court declares the patent is not valid or not infringed. Id . § 7(2)(b). However, a finding of non-infringement or invalidity could not be made in a Prohibition Proceeding which is a judicial review application. The finding would have to made in a separate action (e.g. infringement suit) respect to the same patent.

[116] (1998), 80 C.P.R. (3d) 383, 384 (S.C.C.).

[117] Patented Medicines Regulations, SOR/93-133, § 6(2) (1993) (Can.).

[118] Merck Frosst Canada Inc. v. Canada (1994), 55 C.P.R. (3d) 302, 319 (F.C.A.).

[119] Id . In discharging this burden, the originator is entitled to rely on the statutory presumption of a patent’s validity under Patent Act, R.S.C., ch. P-4, § 43 (1985) (Can.) To rebut the presumption, the generic manufacturer has the burden of adducing evidence to support its allegation of invalidity or non-infringement. Bayer Inc. v. Canada (Minister of National Health and Welfare) (2000), 6 C.P.R. (4th ) 285, 287-288 (F.C.A.).

[120] Patented Medicines Regulations, SOR/93-133, § 6(2) (1993) (Can.).

[121] Id . § 8. The damages provision was improved by the amendments to the Patented Medicines Regulations on March 12, 1998. To date, actions have been commenced under the provision but no award of damages has yet been granted.

[122] On the one hand, the damages provision creates an incentive for the originator to eliminate liability on its part. On the other hand, an incentive is created for the generic manufacturer to proceed with litigation that may result in a damages award. Pfizer Canada Inc. v. Apotex Inc. (2001), 11 C.P.R. (4th ) 245, ¶ 24 (F.C.A.).

[123] See Hoffman-La Roche Ltd. v. Canada (Minister of National Health and Welfare), [1999] CarswellNat 779, ¶ 8 (F.C.T.D.):

[T]he jurisprudence has held that a proceeding under the Patented Medicines (Notice of Compliance) Regulations is not a final determination of a patentee’s rights; it clearly contemplates that a decision in a patent action may lead to a decision that undercuts or supplants a decision given with respect to the justification or lack thereof, of a Notice of Allegation .... [emphasis added]

[124] Thomas B. Leary, Commissioner Federal Trade Commission, Antitrust Issues in the Settlement of Pharmaceutical Patent Disputes, Part II, Speech at the American Bar Association Antitrust Healthcare Program at 2 (May 17, 2001).

[125] Competition in the Pharmaceutical Industry, Before the Senate Committee on Commerce, Science, and Transportation 2 (April 23, 2002) (statement of Timothy J. Muris, Chair, Federal Trade Commission).

[126] Id . at 1.

[127] Id .

[128] Bayer AG v. Apotex Inc. (2001), 14 C.P.R. (4th ) 263, ¶ 5 (F.C.A.).

[129] See generally http://www.bayer.com for information on Bayer’s global operations and corporate structure.

[130] In re Ciprofloxacin Hydrochloride Antitrust Litigation, 166 F. Supp. 2d 740 at 743 (E.D.N.Y. 2001); Press Release, Prescription Access Litigation, Unlawful Conspiracy Restricted Production of Cipro, Consumers Charge in Suit Filed Against Bayer Corporation (October 24, 2001).

[131] Bayer Inc. v. Canada (Minister of National Health and Welfare) (1998), 82 C.P.R. (3d) 359, ¶ 3, 18 (F.C.T.D.).

[132] Id . ¶ 3, 17.

[133] Bayer AG v. Apotex Inc. (1998), 84 C.P.R. (3d) 23, ¶ 9 (F.C.T.D.). Bayer Inc. is the Canadian arm of Bayer and a licensee under the ’067 and ’334 Patents.

[134] Id. ¶ 5-6, 9. Apotex is a privately held company that employs about 4,000 people. It is currently involved in some 90 lawsuits under the Patented Medicines Regulations. Bernard Simon, Private Sector; The Good, the Bad and the Generic , N.Y TIMES , October 28, 2001, § 3, at 2.

[135] A patent list was filed for each of the different dosage strengths of ciprofloxacin tablets sold by Bayer: 250 mg; 500 mg; and 750 mg. Bayer AG v. Canada (Minister of National Health and Welfare) (1996), 65 C.P.R. (3d) 203, 205 (F.C.T.D.). The patent lists were filed by Miles Canada Inc., then Bayer’s licensee under the ’067 Patent. Id . at 205.

[136] Id. at 205.

[137] Id. at 216.

[138] Id. at 205.

[139] Id. at 215-216.

140 Bayer AG v. Canada (Minister of National Health and Welfare) (1995), 60 C.P.R. (3d) 129, ¶ 6 (F.C.A.). Once again, a patent list was filed for each of the different dosage strengths of ciprofloxacin tablets sold by Bayer: 250 mg, 500 mg, and 750 mg. The patent lists were filed by Bayer’s licensee under the ’334 Patent, Miles Canada Inc. Bayer AG v. Canada (Minister of National Health and Welfare) (1995), 65 C.P.R. (3d) 200, 201 (F.C.T.D.).

[141] Seeinfra note 148 regarding the expiry date of the ’334 Patent.

142 Bayer AG v. Canada (Minister of National Health and Welfare) (1995), 60 C.P.R. (3d) 129, ¶ 10-15 (C.A.).

[143] Id . ¶ 11.

[144] Bayer AG v. Canada (Minister of National Health and Welfare) (1995), 65 C.P.R. (3d) 200, 201 (F.C.T.D.). There as no dispute that a compound or active ingredient constituted a “medicine.” Peter R. Wilcox & Daphne C. Ripley, The Patented Medicines (Notice of Compliance) Regulations , 16 CAN. INTELL. PROP. REV . 429, 430-431 (2000).

[145] This matter was settled in a separate proceeding under the Patented Medicines Regulations. Hoffman-La Roche Ltd. v. Canada (Minister of National Health and Welfare) (1995) 62 C.P.R. (3d) 58 (F.C.T.D.), aff’d , (1995), 67 C.P.R. (3d) 25 (F.C.A.).

[146] Bayer Inc. v. Canada (Minister of National Health and Welfare) (1998), 82 C.P.R. (3d) 359, ¶ 2 (F.C.T.D.).

[147] Id . ¶ 19.

[148] At the time the third Prohibition Proceeding was commenced, the ’334 Patent was set to expire in 2010. A few weeks after the proceeding was commenced, Bayer filed with the Canadian Patent Office a Dedication to the Public dated October 9, 1995. Under its terms, Bayer dedicated the ’334 Patent to the public domain, effective upon expiry of the previously issued ’067 Patent. Thus, both patents now expire in 2004. The Dedication answered any concerns of double patenting as between the two patents. Bayer Inc. v. Canada (Minister of National Health and Welfare) (1998), 82 C.P.R. (3d) 359, ¶ 18 (F.C.T.D.).

[149] The ’067 Patent issued from a “parent” application while the ’334 Patent issued from a division of that parent application. Bayer acknowledged that the there was no new inventiveness in the ’334 Patent, other than that pertaining to the compound itself. Bayer took the position that the patent was nonetheless a valid divisional application by reason of the Canadian Patent Office practice at the time. Bayer Inc. v. Canada (Minister of National Health and Welfare) (1998), 82 C.P.R. (3d) 359, ¶ 22, 31-33 (F.C.T.D.).

[150] See Canada (Commissioner of Patents) v. Fabwerke Hoechst Aktiengesellschaft Vormals Meister Lucius & Bruning, [1964] S.C.R. 49 (rejecting pharmaceutical composition claims in a divisional application where they did not reveal any inventive ingenuity over the compound claims in a parent application).

[151] Bayer Inc. v. Canada (Minister of National Health and Welfare) (1998), 82 C.P.R. (3d) 359, ¶ 36 (F.C.T.D.), aff’d , (2000) 6 C.P.R. (4th ) 285 (F.C.A.).

[152] Bayer AG v. Apotex Inc. (2001), 14 C.P.R. (4th ) 263, ¶ 5 (F.C.A.).

[153] Bayer AG v. Apotex Inc. (1998), 84 C.P.R. (3d) 23, ¶ 2 (F.C.T.D.).

[154] R.S.C., ch. P-4 (1985) (Can.). This provision is referred to as the “foreign patent bar.” A similar provision in United States patent law is found at 35 U.S.C. § 102(d).

[155] Bayer AG v. Apotex Inc. (1998), 84 C.P.R. (3d) 23, ¶ 24 (F.C.T.D.). The fifth notice of allegation also relied on a Spanish patent and a German patent application. At first instance, the Court decided, as a preliminary matter, that the fifth notice of allegation was an abuse of process under the Patented Medicines Regulations. Specifically, the Court found that the fifth allegation was not “separate” and “distinct” from the fourth notice of allegation. On this basis, the merits of the fifth notice of allegation were not considered. Id. ¶ 28-33. However, on appeal, this issue was not decided. Instead, the Court of Appeal made no distinction between the fourth and fifth notices of allegation. Both allegations were disposed of on the merits. Bayer AG v. Apotex Inc. (2001), 14 C.P.R. (4th ) 263, ¶ 4 (F.C.A.).

[156] The fourth and fifth Prohibition Proceedings were heard together at first instance and on appeal. By the time the proceedings made their way to the Court of Appeal, the third Prohibition Proceeding had been decided. As such, it was no longer necessary in the fourth and fifth proceedings to deal with the ’334 Patent. Bayer AG v. Apotex Inc. (2001), 14 C.P.R. (4th ) 263 (F.C.A.)

[157] Id . ¶ 13.

[158] There is no prohibition against serving multiple notices of allegation, provided that each allegation is “separate and distinct.” Moreover, when a new patent appears on the Patent Register, a new notice of allegation is required and cannot be dealt with in the context of an earlier Prohibition Proceeding.

[159] See supra Part II.C.3.

[160] Terry Mahn, The Hatch-Waxman Act During Patent Prosecution and Beyond , 54 FOOD & DRUG L.J . 233, 251 (1999).

[161] See supra note 148.

[162] An “improvement” patent relates to an alleged invention other than the active ingredient or compound in the originator drug.

[163] Terry Mahn, The Hatch-Waxman Act During Patent Prosecution and Beyond , 54 FOOD & DRUG L.J . 233, 250 (1999), cited with approval in , Andrx Pharmaceuticals, Inc. v. Biovail Corporation, 276 F.3d 1368, 1378, note 6 (Fed. Cir. 2002).

[164] Terry Mahn, The Hatch-Waxman Act During Patent Prosecution and Beyond , 54 FOOD & DRUG L.J . 233, 250 (1999).

[165] Andrx Pharmaceuticals, Inc. v. Biovail Corporation, 276 F.3d 1368, 1378 (Fed. Cir. 2002); Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d 1323, 1333 (Fed. Cir. 2001).

[166] See supra Part II.C.3. Terry Mahn, The Hatch-Waxman Act During Patent Prosecution and Beyond , 54 FOOD & DRUG L.J . 233, note 47 (1999).

[167] See Merck Frosst Canada & Co. v. Minister of Health (2001), 12 C.P.R. (4th ) 383 (F.C.A.) (upholding Minister’s decision to not list a metabolite patent, namely, a patent claiming a metabolized form of a medicine); Bristol-Myers Squibb Canada Inc. v. Canada (Attorney General) (2001), 11 C.P.R. (4th ) 539 (F.C.A.) (upholding Minister’s decision to remove a patent for not meeting the timing requirements under the Patented Medicines Regulations).

[168] Timothy J. Muris, Chair Federal Trade Commission, Competition and Intellectual Property Policy: The Way Ahead, Speech at the American Bar Association Antitrust Section Fall Forum (November 15, 2001), at 5, at http://www.ftc.gov/speeaches/muris/intellectual.htm (describing recent FTC activities involving pharmaceuticals and the Hatch-Waxman Act).

[169] Competition in the Pharmaceutical Industry, Before the Senate Committee on Commerce, Science, and Transportation 5-6 (April 23, 2002) (statement of Timothy J. Muris, Chair, Federal Trade Commission) (setting out the details of the Biovail investigation).

[170] Mark Curriden, Lawsuits Say Firms Inflated Anthrax Drug Price , DALLAS MORNING NEWS , March 17, 2002, at H1.

[171] Press Release, Prescription Access Litigation, Unlawful Conspiracy Restricted Production of Cipro, Consumers Charge in Suit Filed Against Bayer Corporation (October 24, 2001). The ranking is based on the number of new prescriptions written for CIPRO. Id. Physicians have written more than 100 million prescriptions for CIPRO. Mark Curriden, Lawsuits Say Firms Inflated Anthrax Drug Price , DALLAS MORNING NEWS , March 17, 2002, at H1.

[172] In re Ciprofloxacin at 743; Melody Petersen and Robert Lear, Anthrax Fears Send Demand for a Drug Far Beyond Output , N.Y. TIMES , October 16, 2001, at A1.

[173] In re Ciprofloxacin Hydrochloride Antitrust Litigation, 166 F. Supp.2d 740, 743 (E.D.N.Y. 2001); Altman v. Bayer Corporation, 125 F. Supp. 2d 666, 668 (S.D.N.Y. 2000).

[174] Two related patents were previously issued to Bayer for ciprofloxacin: Patent Nos. 4,544,658 (expiry October 1, 2002) and 4,556,658 (expiry December 3, 2002). Due to concerns over double patenting, Bayer filed a terminal disclaimer under 35 U.S.C. § 253, disclaiming any part of the ’444 Patent extending beyond the expiry of the 4,544,658 Patent. Id . at 197.

[175] In re Ciprofloxacin, 166 F. Supp.2d at 743; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 668. Bayer operates in the United States through its American subsidiary, Bayer Corporation.

[176] In re Ciprofloxacin, 166 F. Supp.2d at 744; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 668. Barr is a publicly traded company based in Pomona, N.Y. The chief executive of Apotex owns a 25 percent interest in Barr. Bernard Simon, Private Sector; The Good, the Bad and the Generic , N.Y TIMES , October 28, 2001, § 3, at 2.

[177] In re Ciprofloxacin, 166 F. Supp.2d at 744; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 668.

[178] Bayer AG v. Barr Laboratories Inc., 798 F. Supp. 196, 197 (S.D.N.Y. 1992). The doctrine prevents a second patent (or any part thereof) from extending the term of an earlier patent through the issuance of obvious claims. Id .

[179] In re Ciprofloxacin, 166 F. Supp.2d at 744; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 668.

[180] In re Ciprofloxacin, 166 F. Supp.2d at 744; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 668.

[181] See generally In re Ciprofloxacin, 166 F. Supp.2d at 743-744; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 668-669.

[182] In re Ciprofloxacin, 166 F. Supp.2d at 744; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 668.

[183] In re Ciprofloxacin, 166 F. Supp.2d at 744; Altman v. Bayer Corporation, 125 F.Supp. 2d 666 at 668.

184 In re Ciprofloxacin, 166 F. Supp.2d at 744; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 669.

[185] Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 669.

[186] In re Ciprofloxacin, 166 F. Supp.2d at 745.

[187] The Rugby Group Inc. (“Rugby”), a manufacturer and distributor of generic drugs, and Rugby’s former parent corporation, Hoescht Marion Roussel, Inc. (“HMR”), were also parties to the Patent Settlement. Like Barr, HMR/Rugby had filed an ANDA for ciprofloxacin. Rugby is currently owned by Watson Pharmaceuticals. In re Ciprofloxacin, 166 F. Supp.2d at 745; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 669; Lawrence B. Ebert, Where Have You Gone, Richard K. Lyon? , INTELL. PROP. TODAY , December, 2001, at 20.

[188] The payment provisions in the Patent Settlement also applied to HMR/Rugby. In re Ciprofloxacin, 166 F. Supp.2d at 745; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 669. See also Kenith Bradsher & Melody Petersen, Offers of Free and Discounted Medicine May Help Industry Prevent New Regulations , N.Y. TIMES , October 27, 2001, at B8 (reporting that Bayer has paid Barr between $32 and $40 million annually under the Patent Settlement).

[189] In re Ciprofloxacin, 166 F. Supp.2d at 745; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 669.

[190] In re Ciprofloxacin, 166 F. Supp.2d at 745; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 669.

[191] In re Ciprofloxacin, 166 F. Supp.2d at 745; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 669; Lawrence B. Ebert, Where Have You Gone, Richard K. Lyon? , INTELL. PROP. TODAY , December, 2001, at 20.

[192] See infra note 224.

[193] In re Ciprofloxacin, 166 F. Supp.2d at 745, note 11; Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 668; Press Release, Prescription Access Litigation, Unlawful Conspiracy Restricted Production of Cipro, Consumers Charge in Suit Filed Against Bayer Corporation (October 24, 2001).

[194] In re Ciprofloxacin Hydrochloride Antitrust Litigation, 166 F. Supp.2d 740, 743 (E.D.N.Y. 2001).

[195] According to the defendants, Barr had never received FDA approval to market a generic version of CIPRO. In re Ciprofloxacin, 166 F. Supp.2d at 744, note 5. This position conflicts with reports in the press that tentative FDA approval has been granted to Barr for its generic version of CIPRO. Kenith Bradsher, Industry Seeks U.S. Contracts to Develop Antibiotics , N.Y. TIMES , October 31, 2001, at B10.

[196] See generally In re Ciprofloxacin, 166 F. Supp.2d at 748-752. See also Altman v. Bayer Corporation, 125 F. Supp.2d 666 at 673-675.

[197] In re Ciprofloxacin, 166 F. Supp.2d at 750, note 9. The defendants sought unsuccessfully to move the suit to federal court. The court held that the resolution of the state-law claims did not necessarily depend on a question of federal patent law. Id .

[198] David A. Balto, Pharmaceutical Patent Settlements: The Antitrust Risks , 55 FOOD & DRUG L. J . 321, 326 (2000), cited with approval in , In re Ciprofloxacin, 166 F. Supp.2d at 750.

[199] In re Ciprofloxacin, 166 F. Supp.2d at 750.

[200] Id.

[201] Melody Petersen & Robert Pear, Production of Cipro Is Being Tripled, German Company Says , N.Y. TIMES , October 17, 2001, at B7.

[202] See, e.g ., In re Abbott Lab. and Geneva Pharm. Inc., No. C-3945, at http://www.ftc.gov/os/2000 /05/c3945complaint.htm (filed May 22, 2000; settled July, 2000); In re Schering-Plough Corp. and Am. Home Prod. Corp., No. 9297, at http://www.ftc.gov/os/2000/04/scheringpart3cmp.pdf (filed Mar. 30, 2001). See generally Competition in the Pharmaceutical Marketplace: Antitrust Implications of Patent Settlements, Before the Senate Committee on the Judiciary , 107th Cong. (May 24, 2001) (statement of Molly Boast, Director, Bureau of Competition, Federal Trade Commission) (discussing FTC investigations related to the marketing incentive); Before the Subcommittee on Commerce, Trade and Consumer Protection of the House Energy and Commerce Committee , 107th Cong. 3 (Nov. 7, 2001) (statement of Timothy J. Muris, Chair, Federal Trade Commission) (discussing FTC investigations related to the marketing incentive).

[203] In connection with these investigations, the FTC has identified certain “settlement provisions” that may be anticompetitive in the context of the Hatch-Waxman Act. These provisions have been described as follows:

Provisions that provide for “reverse” payments . “Reverse” payments (i.e. payments from the patent holder to the alleged infringer) may merit antitrust scrutiny, since they may represent an anticompetitive division of monopoly profits.

Provisions that restrict the generic’s ability to enter with non-infringing products . Such provisions can extend the boundaries of the patent monopoly without providing any additional public discourse or incentive to innovate, and therefore have the potential to run afoul of the principles of antitrust law.

Provisions that restrict the generic’s ability to assign or waive its 180-day marketing exclusivity rights . Because a second ANDA filer may not enter the market until the first filer’s 180-day period of marketing exclusivity has expired, restrictions on assignment or waiver of the exclusivity period can function as a bottleneck, potentially delaying subsequent generic entry for an extended period. [emphasis in original]

Competition in the Pharmaceutical Industry, Before the Senate Committee on Commerce, Science, and Transportation 1 (April 23, 2002) (statement of Timothy J. Muris, Chair, Federal Trade Commission).

[204] In re Hoechst Marion Roussel, Inc. and Andrx Corp., No. 9293, at http://www.ftc.gov/os/2000/03/hoechstandrxcomplaint.htm (filed Mar. 16, 2000; settled May 11, 2001).

[205] In re Cardizem CD Antitrust Litigation, 90 F. Supp.2d 819 (E.D. Mich. 1999) (alleging that state antitrust law and common law principles of unjust enrichment were violated by the Hoechst/Andrx settlement); Aetna U.S. Healthcare, Inc. v. Hoechst Aktiengesellschaft, 54 F. Supp. 2d 1042 (D. Kan. 1999) (alleging that the Hoechst/Andrx settlement constituted unfair competition in violation of state laws).

[206] Altman v. Bayer Corporation, 125 F. Supp.2d 666, 674-675 (S.D.N.Y. 2000).

[207] Id .

208 Edmund L. Andrews, Bayer is Taken Aback by the Frenzy to Get its Drug , N.Y. TIMES , October 26, 2001, at B8.

[209] Id. The studies showed that the three drugs were about equally effective.

[210] Id.

[211] Id. Inhalation anthrax (affecting the lungs) is a more serious condition than cutaneous anthrax (affecting the skin).

212 Lody Petersen & Robert Pear, Anthrax Fears Send Demand for a Drug Far Beyond Output , N.Y. TIMES , October 16, 2001, A1; Elisabeth Bumiller, Public Health or Public Relations , N.Y. TIMES , October 21, 2001, § 4, at 4.

[213] Lody Petersen & Robert Pear, Anthrax Fears Send Demand for a Drug Far Beyond Output , N.Y. TIMES , October 16, 2001, A1.

[214] Matt Fleischer-Black, Little Pill Big Problem , IP WORLDWIDE , December 2001, at 31.

[215] Mark Curriden, Lawsuits Say Firms Inflated Anthrax Drug Price , DALLAS MORNING NEWS , March 17, 2002, at H1.

[216] Matt Fleischer-Black, Little Pill Big Problem , IP WORLDWIDE , December 2001, at 31.

217 Id .

218 Matt Fleischer-Black, Little Pill Big Problem , IP WORLDWIDE , December 2001, at 31. The news show aired on October 15, 2001. Matt Fleischer-Black, Little Pill Big Problem , IP Worldwide, December 2001, at 31.

[219] MeLody Petersen & Robert Pear, Anthrax Fears Send Demand for a Drug Far Beyond Output , N.Y. TIMES , October 16, 2001, A1.

[220] Melody Petersen & Robert Pear, Production of Cipro is Being Tripled, German Company Says , N.Y. TIMES , October 17, 2001, at B7. The stockpile is based on the recommendation that a person exposed to anthrax take ciprofloxacin for five days and then switch to a less potent antibiotic for 55 days. Keith Bradsheer, Bayer Agrees to Charge Government a Lower Price for Anthrax Medicine , N.Y. TIMES , October 25, 2001, at B8.

[221] Melody Petersen & Robert Pear, Production of Cipro is Being Tripled, German Company Says , N.Y. TIMES , October 17, 2001, at B7.

[222] Press Release, Charles Schumer, Schumer: New Cipro Source Could Dramatically Increase Supply (October 16, 2001).

223 See also Edmund L. Andrews, Demand for Cipro May Be a Break for Bayer, and a Headache , N.Y. TIMES , October 18, 2001, at B8.

224 The New York Times reported that the five generic drug manufacturers include Barr, Mylan Pharmaceuticals of Pittsburgh, Par Pharmaceutical of Spring Valley, N.Y, and Teva Pharmaceuticals with American headquarters in Wales, Pa. Melody Petersen & Robert Pear, U.S. Acts to Increase Supply of Drugs to Counter Anthrax , N.Y. TIMES , October 18, 2001, at A1; Elisabeth Bumiller, Administration Won’t Allow Generic Versions of Drug , N.Y. TIMES , October 18, 2001, at B8.

225 Melody Petersen & Robert Pear, U.S. Acts to Increase Supply of Drugs to Counter Anthrax , N.Y. TIMES , October 18, 2001, at A1.

226 Press Release, Charles Schumer, Schumer: New Cipro Source Could Dramatically Increase Supply (October 16, 2001).

227 NBC News Transcripts, Today Show (7:00 AM ET), Tommy Thompson discusses the anthrax problem , October 17, 2001.

[228] Elisabeth Bumiller, Administration Won’t Allow Generic Versions of Drug , N.Y. TIMES , October 18, 2001, at B8.

229 Melody Petersen & Robert Pear, U.S. Acts to Increase Supply of Drugs to Counter Anthrax , N.Y. TIMES , October 18, 2001, at A1.

[230] Id.

231 Andrew Pollack, Drug Makers Wrestle with World’s New Rules , N.Y. TIMES , October 21, 2001, at 90. The pharmaceutical industry favors defense contract work whereby the government would pay pharmaceutical firms to develop bioterrorism drugs. Kenith Bradsher, Industry Seeks U.S. Contracts to Develop Antibiotics , N.Y. TIMES , October 31, 2001, at B10.

232 Amy Harmon & Robert Pear, Canada Overrides Patent for Cipro to Treat Anthrax , N.Y. TIMES , October 19, 2001, at A1.

[233] Krista Foss, Patent War Looming Over Drug for Anthrax , GLOBE AND MAIL , October 19, 2001, at A1.

234 Brian Laghi, Cipro Deal Gets Rock off Hook , GLOBE AND MAIL , October 25, 2001, at A1.

[235] Id.

[236] Amy Harmon & Robert Pear, Canada Overrides Patent for Cipro to Treat Anthrax , N.Y. TIMES , October 19, 2001, at A1; Krista Foss, Patent War Looming Over Drug for Anthrax , GLOBE AND MAIL , October 19, 2001, at A1.

[237] Krista Foss, Patent War Looming Over Drug for Anthrax , GLOBE AND MAIL , October 19, 2001, at A1.

[238] Edmund L. Andrews, Drug Maker Seems Uncertain in Response to Cipro Frenzy , N.Y. TIMES , October 19, 2001, at A1.

[239] Brian Laghi, Cipro Deal Gets Rock off Hook , GLOBE AND MAIL , October 25, 2001, at A1.

[240] Krista Foss, Patent War Looming Over Drug for Anthrax , GLOBE AND MAIL , October 19, 2001, at A1. See also Patent Act, R.S.C., ch. P-4, § 19 (1985) (Can.).

Many politicians and commentators joined in Bayer’s outcry while others lauded Health Canada’s decision. For instance, in Ottawa, the leader of the right-of-center Canadian Alliance, Stockwell Day, referred to Allan Rock’s actions as an “illegal drug deal.” The leader of the Conservative Party, Joe Clark, suggested that Rock might be charged for violating the patent law. In the United States, Senator Schumer urged the White House to follow Health Canada’s decision. Brian Laghi, Rock Accuses Bayer of ‘shell game’; Health Minister Says Drug Maker Misled Over Its Capacity to Fill Order for Cipro, GLOBE AND MAIL , October 24, 2001, at A4; David Olive, It’s Sad Sight to See Ottawa Ready to Give in to Bayer on Drug , TORONTO STAR , October 23, 2001, at E02.

[241] Edmund L. Andrews, Drug Maker Seems Uncertain in Response to Cipro Frenzy , N.Y. TIMES , October 19, 2001, at A1.

[242] Id.

[243] Robert Fife & Michael Friscolanti, Anthrax Drug Deal Lands Rock in Hot Water , NATIONAL POST , October 20, 2001, at A1; Brian Laghi, Cipro Deal Gets Rock off Hook , GLOBE AND MAIL , October 25, 2001, at A1.

244 Keith Bradsher & Edmund L. Andrews, U.S. Says Bayer Will Cut Cost of Its Anthrax Drug , N.Y. TIMES , October 24, 2001, at B7. Notwithstanding the agreement with Bayer, Allan Rock accused the company of playing a “shell game” with its worldwide supplies of CIPRO. Brian Laghi, Rock Accuses Bayer of ‘shell game’; Health Minister Says Drug Maker Misled Over Its Capacity to Fill Order for Cipro, GLOBE AND MAIL , October 24, 2001, at A4.

245 Brian Laghi, Rock Accuses Bayer of ‘shell game’; Health Minister Says Drug Maker Misled Over Its Capacity to Fill Order for Cipro, GLOBE AND MAIL , October 24, 2001, at A4. Apotex indicated it had already produced the originally requested generic tablets. Bernard Simon, The Good, The Bad and the Generic , N.Y. TIMES , October 28, 2001, § 3, at 2.

[246] Brian Laghi, Rock Accuses Bayer of ‘shell game’; Health Minister Says Drug Maker Misled Over Its Capacity to Fill Order for Cipro, GLOBE AND MAIL , October 24, 2001, at A4.

[247] Keith Bradsher & Edmund L. Andrews, U.S. Says Bayer Will Cut Cost of Its Anthrax Drug , N.Y. TIMES , October 24, 2001, at B7. Bayer normally charges the United States government $1.83 per CIPRO tablet. In the United States, the wholesale price is $4.67 per tablet; the retail price from $5 to $7 per pill. Keith Bradsher, Bayer Agrees to Charge Government a Lower Price for Anthrax Medicine , N.Y. TIMES, October 25, 2001, at B8.

[248] Keith Bradsher & Edmund L. Andrews, U.S. Says Bayer Will Cut Cost of Its Anthrax Drug , N.Y. TIMES , October 24, 2001, at B7.

[249] Richard W. Stevenson, Reconciling the Demands of War and the Market , N.Y. TIMES , October 28, 2001, § 1B, at 10.

[250] Keith Bradsher & Edmund L. Andrews, U.S. Says Bayer Will Cut Cost of Its Anthrax Drug , N.Y. TIMES , October 24, 2001, at B7.

[251] Kenith Bradsher, Bayer Agrees to Charge Government a Lower Price for Anthrax Medicine , N.Y. TIMES , October 25, 2001, at B8.

[252] The U.S. government was also given the option of ordering an additional 100 million tablets at $0.85 and a further 100 million pills at $0.75 each. Kenith Bradsher, Bayer Agrees to Charge Government a Lower Price for Anthrax Medicine , N.Y. TIMES , October 25, 2001, at B8.

[253] Id. Bayer ultimately agreed to offer its tablets to the Canadian government at the same reduced price. Brian Laghi, Cipro Deal Gets Rock off Hook , GLOBE AND MAIL , October 25, 2001, at A1.

[254] Kenith Bradsher, Bayer Agrees to Charge Government a Lower Price for Anthrax Medicine , N.Y. TIMES , October 25, 2001, at B8.

[255] For instance, Johnson & Johnson offered to donate up to 100 million tablets of its drug LEVAQUIN, subject to FDA approval. Bristol-Myers Squibb offered to donate its TEQUIN drug to anyone exposed to anthrax, again subject to FDA approval. A similar offer was made by GlaxoSmithKline in respect of two older medicines. Kenith Bradsher, Bayer Halves Price for Cipro, But Rivals Offer Drugs Free , N.Y. TIMES , October 25, 2001, at A1.

[256] Off-patent doxycycline is more common, less expensive, and has fewer side effects. Shawn Mcarthy, Ottawa adds doxycycline to stockpile of anti-anthrax drugs , GLOBE AND MAIL , October 31, 2001, at A4.

[257] Shawn McCarthy, Ottawa adds doxycycline to stockpile of anti-anthrax drugs , GLOBE AND MAIL , October 31, 2001, at A4; Matt Fleischer-Black, Little Pill Big Problem , IP WORLDWIDE , December 2001, at 31.

[258] Mark Curriden, Lawsuits Say Firms Inflated Anthrax Drug Price , DALLAS MORNING NEWS , March 17, 2002, at H1.

[259] Id.

[260] Heather Scoffield, Anthrax Worries Prompted Drug Order , GLOBE AND MAIL , October 21, 2001, at A7.

[261] Andrew Beckerman-Rodau, Patent Law – Balancing Profit Maximization and Public Access to Technology , 21 (2001), http://www.law.suffolk.edu/arodau.

[262] 28 U.S.C. § 1498(a) (1988 & Supp. V. 1993). In McCreary v. United States, 35 Fed. Cl. 533, 546 (1996), the Court compared a private infringement suit with unauthorized government use of a patented invention:

[A] suit under § 1498 is analogous to a patent infringement action between private parties... . Strictly speaking, however, patent infringement is actionable between private parties pursuant to 35 U.S.C. § 281. On the other hand, so-called “patent infringement” by the United States is an uncompensated taking of private property under the Fifth Amendment. U.S. Const. amend. V. (“nor shall private property be taken for public use, without just compensation”)...
See also Andrew Beckerman-Rodau, Patent Law – Balancing Profit Maximization and Public Access to Technology , 21 (2001), http://www.law.suffolk.edu/arodau.

263 Crater Corporation v. Lucent Technologies Inc., 255 F.3d 1361, 1364 (Fed. Cir. 2001) (finding that a private party’s work on a patented device, which was for a classified government project, was exempt from liability for infringement).

[264] Id .

265 Press Release, Charles Schumer, Schumer: New Cipro Source Could Dramatically Increase Supply (October 16, 2001) (arguing that indemnification ought to be provided to the generic manufacturer).

266 Id . (arguing that the generic manufacturer should not have to indemnify the government).

267 Matt Fleischer-Black, Little Pill Big Problem , IP WORLDWIDE , December 2001, at 30.

268 Patent Act, R.S.C., ch. P-4, § 19.1(2) (1985) (Can.) In all other cases, the government must establish that: (a) it has made efforts to obtain from the patentee, on reasonable commercial terms and conditions, the authority to use the patented invention; and (b) its efforts have not been successful within a reasonable period. Id. § 19.1(1).

269 Defence Production Act, R.S.C. ch. D-1, § 22(1) (1985) (Can.). “Royalties” are defined to include claims for damages for patent infringement. Id. § 2.

270 Id. § 2. A “defence contract” is defined as:

271 S. 754, 107th Congress (2001).

[ ]

272 The legislation makes the following Congressional findings, id. § 2:

273 Amy Harmon & Robert Pear, Canada Overrides Patent for Cipro to Treat Anthrax , N.Y. TIMES , October 19, 2001, at A1.

274 S. 754, § 5(2).

275 Id. § 3(2).

276 Id. § 7(a).

277 Amy Harmon & Robert Pear, Canada Overrides Patent for Cipro to Treat Anthrax , N.Y. TIMES , October 19, 2001, at A1.

[278] S. 812, 107th Congress (2001).

[279] Press Release, United States Senators John McCain and Charles Schumer, McCain, Schumer Unveil Initiative to Save Consumers $71 Billion on Prescription Drugs (May 1, 2002).

[280] S. 812 § 2(b)(1).

[281] Id. § 2(b)(2).

[282] See generally Don W. Martens & Paul N. Conover, Preliminary Injunctions in U.S. Patent Cases , J. WORLD INTELL. PROP . 331 (1999) (concluding that between 1993 and 1999 the Federal Circuit has taken a moderate approach to granting preliminary relief in patent cases).

[283] S. 812 § 7(5).

[284] Id.

[285] Id. § 6(a)(2). See also 28 U.S.C. § 2201.

[286] S. 812 § 6(2).

[287] Id. § 3(a)(3).

[288] Id.

[289] Id.

[290] At present, an ANDA applicant has to decide whether or not to follow a favorable district court decision by entering the market pending appeal. If so, and the decision is overturned on appeal, the ANDA applicant is exposed to damages for the interim period. On the other hand, if the ANDA applicant does not enter the market, and the favorable decision is upheld on appeal, the exclusivity period will have already started to run. See generally Press Release, United States Senators Charles E. Schumer and John McCain, Greater Access to Affordable Pharmaceuticals (GAAP) Act (May 1, 2002).

[291] H.R. 1708, 107th Cong. (2001).

[292] Id.

[293] Id.

[294] Id. § 2(a).

[295] Id. § 2(a). Other eligible “determinations” include the following: (1) the patentee has “engaged in anti-competitive behavior;” (2) a second patent, which involves an “important technical advance” cannot be exploited without infringing an earlier patent; and (3) the invention is needed for “research purposes that would benefit public health.” Id.

[296] Id.

[297] Id.

[298] A detailed account of this important debate is outside the scope of this paper. For an introduction to the literature in this area, see Sara M. Ford, Compulsory Licensing Provisions Under the TRIPS Agreement: Balancing Pills and Patents , 15 AM. U. INT’L L. REV . 941 (2000).

[299] H.R. 1708.

[300] The Ministerial Conference is the WTO’s top decision-making body. The Marrakesh Agreement Establishing the WTO requires the Ministerial Conference to meet at least once every two years. See supra note 88.

[301] Donald McNeil, Patents or Poverty , N.Y. TIMES , November 5, 2001, at A6.

[302] As the New York Times reported:

One of the most startling shifts in American attitudes since Sept. 11 has been toward pharmaceutical patents. The United States and other Western nations have adamantly supported the rights of drug companies, which contend that they need years of exclusive rights to recoup vast research and development outlays. That has led to years of passionate debates in nations like Brazil and South Africa, where patented drugs are seen as just too expensive for most victims facing AIDS and other life-threatening illnesses.

Yet this week, as the number of anthrax attacks mounted, the White House abruptly warned Bayer that it might declare an emergency override of the company’s Cipro patent unless it lowered its prices. Bayer, which charges pharmacies more than $4 a tablet, reached an agreement today with the government on a price of just under $1 each.

That move came right after Bayer agreed to give the Canadian government a similarly low price to keep Canada from buying supplies from a generic manufacturer.

To people who have quietly sided for years with poorer countries that fought to escape the high prices allowed by patents, both moves seem cynical.

Alan Cowell & Edmund L. Andrews, European Converts to Laissez Faire See the Rush to Intervene as Heresy , N.Y. TIMES , October 25, 2001, at C1.

[303] Joseph Kahn, A Trade Agenda Tempts Murphy’s Law , N.Y. TIMES , November 9, 2001, at C1.

[304] WTO Ministerial Conference, Declaration on the TRIPS agreement (November 14, 2001).

305 Id .

306 MALCOLM ANDERSON & KAREN PARENT, TIMELY ACCESS TO GENERIC DRUGS: ISSUES FOR HEALTH POLICY IN CANADA (2001).

[307] Id . at 22.

[308] Id . at 42.

309 Press Release, Canadian Drug Manufacturers Association, Liberals Urged to Follow U.S. Lead with Bill S-17 Amendments to Stop Abuse of Patent Act Regulations, http://www.cdma-acfpp.org/news/news.asp=20010517.

[310] Apotex Inc. v. Canada (Attorney General) (2000), 71 C.P.R. (3d) 166 (F.C.A.). See generally, regarding preliminary injunctions in patent cases, Syntex Inc. v. Novopharm Ltd. (1991), 36 C.P.R. (3d) 129 (F.C.A.); Eli Lilly and Co. v. Novopharm Ltd. (1996), 69 C.P.R. (3d) 455 (F.C.A.); Apotex Inc. v. Wellcome Foundation (1998), 82 C.P.R. (3d) 429 (F.C.A.).