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The Trouble with the TPP, Day 9: Limits on Medical Devices and Pharma Data Collection

Michael Geist Law RSS Feed - Thu, 2016/01/14 - 10:15

The link between health care and the TPP’s intellectual property chapter is easy to spot, but there are other chapters with implications for the issue. The Trouble with the TPP series today considers Chapter 8, which covers Technical Barriers to Trade (TBT). The chapter contains some surprising restrictions on the ability for national regulators to require the disclosure of certain information as part of the regulatory review process for pharmaceutical products and medical devices (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection).

The Canadian government summary of the TBT chapter does not disclose that there are data collection restrictions. In fact, the only reference to the issue states that the chapter “improves regulatory transparency in the areas of cosmetics, medical devices, and pharmaceutical products.” Yet the chapter does far more than address regulatory transparency. For example, Annex 8-C 7bis requires each party to makes its determination on whether to grant marketing authorization for a specific pharmaceutical product on the basis on factors such as clinical data, manufacturing quality, and labelling information. However, it also states that:

no Party shall require sale or related financial data concerning the marketing of the product as part of such a determination. Further, each Party shall endeavour not to require pricing data as part of the determination

Annex 8-E for the approval of marketing of medical devices is similar:

no Party shall require sale, pricing, or related financial data concerning the marketing of the product as part of such a determination

As KEI notes in its presentation to the U.S. International Trade Commission:

It is certainly desirable to require drug and device makers to provide information about product prices, revenues, and a variety of related financial data, including the outlays on R&D and marketing of products. These are the very topics that the State of California and other state governments are seeking to obtain from drug companies, but it is much easier to mandate such disclosures at the federal level.

Much of the pricing and sales data for drugs is now controlled by IMS, the company that holds a near global monopoly on the most detailed information on sales revenue and pricing of drugs. Other “related financial data concerning the marketing of the product” might include data on R&D outlays, a topic shredded in unhelpful secrecy and subject to too much controversy, when the facts exist and could be shared. From the text, it is not that clear how far the ban on requiring financial data extends, and to which activities of a regulatory agency or another government body would be constrained by these provisions.

It is not clear why the Canadian government has agreement to these limitations nor why the summary documents do not reference them. This information could assist regulators in making better decisions on medical devices and pharmaceutical products, yet the TPP will inexplicably block them from doing so.

The post The Trouble with the TPP, Day 9: Limits on Medical Devices and Pharma Data Collection appeared first on Michael Geist.

The Trouble with the TPP, Day 8: Locking In Biologics Protection

Michael Geist Law RSS Feed - Wed, 2016/01/13 - 11:36

As the TPP negotiations reached their conclusion in Atlanta last October, one outstanding issue stood above all others: protection for biologics. While not well understood by the public, at issue was billions of dollars and access to cutting edge medicines. The Trouble with the TPP series examines the outcome of the biologics issue and argues that even with less protection than the U.S. advocated, the TPP’s requirements still represent a significant problem for global health (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions).

Biological drugs are pharmaceuticals involving complex molecules or mixtures of molecules that are made of biological sources manufactured within a living system. They differ from conventional drugs that are manufactured by combining chemical ingredients. Building on greater knowledge of genetics and cell processes, the area represents a major growth area for the pharmaceutical industry. With the complexity comes cost, however, with biological drugs far more expensive than conventional ones. Much like the generic pharmaceutical industry creates cheaper, generic versions of chemical drugs, companies have begun to create “biosimilars” as cheaper versions of biological drugs, relying on data from clinical trials to formulate the alternative. Pharmaceutical companies have therefore sought protection for the clinical data.

As a relatively new area with billions at stake, countries have adopted a wide range of approaches to the issue of data protection. The U.S. currently offers 12 years of data protection (which it wanted emulated within the TPP), though President Obama has seemingly recognized the mistake of offering such long protection (the term was part of the negotiation over health care reform) and recently sought to reduce the term to seven years, which would have yielded billions in health care savings. Other countries have taken different approaches: Australia and New Zealand offer five years of protection, Japan and Canada eight years, and some TPP countries such as Mexico, Peru, Vietnam, Malaysia and Brunei have no protection at all.

The optimal term of protection remains a contentious issue. The Federal Trade Commission released a study in 2009 that raised doubts about the need for any biologics-specific protection, citing the protections offered by patents and the high costs of entry as evidence that biosimilar competition would be limited.  Moreover, it noted that there were already sufficient market incentives to support biologic competition and innovation.

The TPP compromise remains contentious, as Article 18.52 provides for at least eight years of protection or five years of protection plus other measures to provide comparable outcome in the market. The ongoing dispute over what this provision means is the source of some of the opposition to the TPP in the United States (particularly since Australia maintains its current approach is compliant with the TPP). Canada currently meets the eight year standard, so no further legislative changes would be required.

Yet even the compromise represents a problem. As the FTC concluded, it is far from clear that any protection is needed given market incentives and the protections that may be granted through patents. Moreover, President Obama’s second thoughts on the term of protection in the U.S. points to both the enormous costs that come with each year of additional protection and the prospect that countries may wish to reduce protections in the future. The TPP locks-in protection, however, making it difficult for any TPP country to later amend its rules. That binding policy, which comes at a still early stage of new technological development, may create long term health costs to the detriment of patients, innovation, and marketplace competition.

The post The Trouble with the TPP, Day 8: Locking In Biologics Protection appeared first on Michael Geist.

Do privacy studies help? A Retrospective look at Canvas Fingerprinting

Freedom to Tinker - Tue, 2016/01/12 - 13:04
It seems like every month we hear of some new online privacy violation in the news, on topics such as fingerprinting or web tracking. Many of these news stories highlight academic research. What we don’t see is whether these studies and the subsequent news stories have any impact on privacy. Our 2014 canvas fingerprinting measurement […]

The Trouble with the TPP, Day 7: Patent Term Extensions

Michael Geist Law RSS Feed - Tue, 2016/01/12 - 10:54

The Trouble with the TPP series now shifts to patent law reforms and the likely costs to the health care system (prior posts include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry). The TPP patent provision changes are very significant since they lock Canada into extending the term of patent protection, which will ultimately increase health care costs. Moreover, global organizations such Doctors Without Borders has warned that the agreement will raise the price of medicines for millions of people, particularly in the developing world.

The Conservative government tried to downplay the impact of patent law changes in the TPP, arguing that the agreement is consistent with current law or is “in line with outcomes secured in the Canada – EU Comprehensive Trade and Economic Agreement (CETA)”. The reference to CETA, which comes from the government’s TPP IP summary, represents a neat of sleight of hand.

The CETA changes, which the government admitted would result in increased health care costs, are not part of current Canadian law. They are not part of any bill that has been introduced before the House of Commons. In fact, given the long delays in proceeding with any implementation of CETA (indeed, the growing sense that Europe may reject the agreement in its current form), the CETA patent provisions are best described as aspirational. The inclusion of CETA-style patent provisions in TPP should be viewed on their own as ratification of the TPP could easily come before CETA ever makes its way before the House of Commons. Should that happen, the TPP will be responsible for increased health care costs arising from the extension of patent protection for pharmaceuticals.

The TPP requires several significant changes to Canadian patent law. Article 18.48 creates a requirement for a patent term adjustment for delays due to marketing approvals (described as unreasonable curtailment). The Canadian government believes that CETA’s two year patent restoration provision will meet the TPP requirement. The effect of the TPP is therefore to lock in CETA’s patent restoration extension even if CETA is never ratified or implemented. According to one study, the impact of these provisions in CETA could lead to increased drug costs of between $850 million and $1.6 billion annually.

In fact, the TPP expands the extension requirements even beyond those found in CETA. Article 18.46 requires a patent term adjustment due to patent office delays. The section provides that “an unreasonable delay at least shall include a delay in the issuance of a patent of more than five years from the date of filing of the application in the territory of the Party, or three years after a request for examination of the application has been made, whichever is later.” No similar extension is found under current Canadian law nor within CETA.

As one of my recent technology law column noted (Toronto Star version, homepage version), the escalation in patent protections is set to occur just as drug prices hit all-time highs in Canada and pharmaceutical investment in research and development sinks to decade-long lows. Those results come from a recent report released by the Patent Medicines Panel Review Board (PMPRB), an independent body charged by the government to track patent medicines pricing and spending alongside investment in research and development by pharmaceutical companies.

The report indicates that Canadians pay more for patented drugs than consumers in France, the U.K., Italy, Sweden, and Switzerland (only the U.S. and Germany pay more among the countries tracked by the PMPRB). The PMPRB says that this represents a change over time:



In 2005, Canadian prices were, on average, approximately equal to or below corresponding prices in all comparators other than Italy. By 2014, Canadian prices were decidedly above prices in the United Kingdom, France and Italy, and somewhat higher than prices in Sweden and Switzerland.



Moreover, over the past 12 years, Canadian expenditures on drugs has outpaced all other comparator countries, including the U.S., with 184.4 per cent growth in total drug expenditures.

Not only have Canadian expenditures on drugs been high, but the ratio of sales to research and development in Canada by pharmaceutical companies has fallen to record lows. In the 1980s, the industry lobbied for patent reforms that provided new rights and longer protections. In return, it promised to increase spending on research and development in Canada so that it would rise to 10 per cent of total sales by 1996. 

The report indicates that the ratio is now at only 4.4 per cent, the lowest recorded since 1988 (the peak rate was 11.7 per cent in 1995).

Canada is a significant laggard when it comes to pharmaceutical research. Despite ranking as one of the 10 most important markets and paying some of the world’s highest prices, the ratio of sales to research in other comparator countries is triple the Canadian rate. In other words, in countries such as the UK and France, drug prices are lower and research expenditures are far higher.

The confluence of high prices, low investment in research and development, and ever-increasing demands for further patent protections has caused the PMPRB to question the effectiveness of the Canadian system. It notes with regard to CETA:

Its implementation will require amendments to the Patent Act to provide pharmaceutical patentees with up to two years of additional market exclusivity. Such a change would come at a time of high drug prices and record low R&D, causing some to question the effectiveness of the PMPRB and whether a policy balance conceived over 25 years ago continues to serve its intended purpose.



The concern over Canadian pharmaceutical policy is long overdue as the evidence leaves little doubt that catering to the demands of the largely foreign-based companies have yielded few benefits. Canadians pay significantly more for pharmaceutical drugs than consumers in many other developed countries and the promised increased investment in research and development has not materialized. Yet despite the costly state of affairs, the government is set to reward the industry with even stronger protections through the TPP that will result in an extension of the higher prices.

The post The Trouble with the TPP, Day 7: Patent Term Extensions appeared first on Michael Geist.

The Battle Over the Future of Broadband in Canada: Mayors Tory & Watson v. Nenshi

Michael Geist Law RSS Feed - Tue, 2016/01/12 - 10:41

Cities across the country have long emphasized the importance to the local economy of creating innovation hubs. There are different roads toward that goal, however, as shown by competing submissions from the mayors of Toronto and Calgary in a high-stakes battle over the future of broadband Internet services. Toronto mayor John Tory and Ottawa Mayor Jim Watson sided with large telecom companies, while Calgary mayor Naheed Nenshi emphasized the importance of open networks and more robust competition.

My weekly technology law column (Toronto Star version, homepage version) notes that the submissions stem from a crucial ruling issued by Canada’s telecom regulator in July. Hoping to foster a more competitive market and having used various “open access” policy measures to give independent Internet providers a chance to compete in the Internet services market, the Canadian Radio-television and Telecommunications Commission (CRTC) decided to extend those rules to fast fibre connection services.

The upshot of the ruling was that companies such as Bell would be required to share their infrastructure with other carriers on a wholesale basis. The companies would enjoy a profit on those wholesale connections, but the increased competition would facilitate better services, pricing, and consumer choice. Indeed, the policy approach is similar to the one used for slower DSL broadband connections that has been instrumental in creating a small but active independent ISP community that serves hundreds of thousands of Canadians.

Months later, Bell filed a cabinet appeal over the decision, asking the new Liberal government to overrule the CRTC. Industry Canada recently posted the comments from interested stakeholders and in the process revealed a fascinating split on the issue.

On one side, Bell garnered support from large business groups and technology companies such as Cisco and Blackberry. Those companies have strong business relationships and were unsurprisingly willing to support Bell’s position. On the other side, consumer groups, independent Internet providers, some cable providers, and the Canadian Federation of Independent Business lined up in support of the CRTC decision, emphasizing the benefits of a more competitive market.

While the corporate divide was to be expected (most corporate submissions supporting Bell used similar language and some even copied Bell executives), the more interesting difference arose from submissions from several large Canadian cities.

Toronto and Ottawa both submitted brief letters expressing support for Bell’s position. The two-page letters both cite planned Bell investments in the cities and express fear that the CRTC ruling might delay company plans. Tory, a former Rogers executive, says that Bell deserves to be treated fairly, but does not explain how the implementation of a policy designed to create more competition for his constituents represents unfair treatment.

By contrast, Calgary submitted a 28 page document supporting the CRTC ruling and explaining why increased competition was good for the city and consumers. Addressing issues seemingly ignored by Toronto and Ottawa, Nenshi noted that without some form of network access for competitors, there would invariably be challenges to grant all providers the necessary municipal infrastructure to construct their networks. Given limited capacity of municipal right of ways, the market might be limited to a few large competitors.

Moreover, Calgary focused on the need for cities to build their own network infrastructure to complement the services offered by the telecom giants. It noted the public interest benefits that arise from building municipal networks, which offer the chance for more competition and ensure that cities are not held hostage by large companies threatening to delay or withdraw network investments.

Calgary also reminded the government that companies like Bell have long enjoyed benefits from public funding, protection from competition, and access to municipal infrastructure. While the new fibre connections do not rely on legacy infrastructure, their powerful market positions are directly linked to those earlier privileged positions.

The federal government decision on the appeal may be months away, but the competing submissions paint dramatically different pictures of how Canadian cities are addressing the critical need for affordable high-speed Internet services.

It suggests that Toronto and Ottawa are seemingly content to wait for the large telecom companies to install new networks and have no problem with the higher consumer and business costs that reduced competition would bring. Calgary, meanwhile, is actively building competitive networks, monitoring municipal developments around the world, and promoting a more open, competitive environment. All the mayors claim their cities are working to become leading hubs of innovation, yet only one seems to be doing much about it.

The post The Battle Over the Future of Broadband in Canada: Mayors Tory & Watson v. Nenshi appeared first on Michael Geist.

Why Mayors John Tory and Jim Watson Are Against Competition for Access to Affordable Fast Broadband

Michael Geist Law RSS Feed - Tue, 2016/01/12 - 10:29

Appeared in the Toronto Star on January 11, 2015 as Why Mayor John Tory is Against Competition for Access to Affordable Fast Broadband

Cities across the country have long emphasized the importance to the local economy of creating innovation hubs. There are different roads toward that goal, however, as shown by competing submissions from the mayors of Toronto and Calgary in a high-stakes battle over the future of broadband Internet services. Toronto mayor John Tory (joined by Ottawa Mayor Jim Watson) sided with large telecom companies, while Calgary mayor Naheed Nenshi emphasized the importance of open networks and more robust competition.

The submissions stem from a crucial ruling issued by Canada’s telecom regulator in July. Hoping to foster a more competitive market and having used various “open access” policy measures to give independent Internet providers a chance to compete in the Internet services market, the Canadian Radio-television and Telecommunications Commission (CRTC) decided to extend those rules to fast fibre connection services.

The upshot of the ruling was that companies such as Bell would be required to share their infrastructure with other carriers on a wholesale basis. The companies would enjoy a profit on those wholesale connections, but the increased competition would facilitate better services, pricing, and consumer choice. Indeed, the policy approach is similar to the one used for slower DSL broadband connections that has been instrumental in creating a small but active independent ISP community that serves hundreds of thousands of Canadians.

Months later, Bell filed a cabinet appeal over the decision, asking the new Liberal government to overrule the CRTC. Industry Canada recently posted the comments from interested stakeholders and in the process revealed a fascinating split on the issue.

On one side, Bell garnered support from large business groups and technology companies such as Cisco and Blackberry. Those companies have strong business relationships and were unsurprisingly willing to support Bell’s position. On the other side, consumer groups, independent Internet providers, some cable providers, and the Canadian Federation of Independent Business lined up in support of the CRTC decision, emphasizing the benefits of a more competitive market.

While the corporate divide was to be expected (most corporate submissions supporting Bell used similar language and some even copied Bell executives), the more interesting difference arose from submissions from several large Canadian cities.

Toronto and Ottawa both submitted brief letters expressing support for Bell’s position. The two-page letters both cite planned Bell investments in the cities and express fear that the CRTC ruling might delay company plans. Tory, a former Rogers executive, says that Bell deserves to be treated fairly, but does not explain how the implementation of a policy designed to create more competition for his constituents represents unfair treatment.

By contrast, Calgary submitted a 28 page document supporting the CRTC ruling and explaining why increased competition was good for the city and consumers. Addressing issues seemingly ignored by Toronto and Ottawa, Nenshi noted that without some form of network access for competitors, there would invariably be challenges to grant all providers the necessary municipal infrastructure to construct their networks. Given limited capacity of municipal right of ways, the market might be limited to a few large competitors.

Moreover, Calgary focused on the need for cities to build their own network infrastructure to complement the services offered by the telecom giants. It noted the public interest benefits that arise from building municipal networks, which offer the chance for more competition and ensure that cities are not held hostage by large companies threatening to delay or withdraw network investments.

Calgary also reminded the government that companies like Bell have long enjoyed benefits from public funding, protection from competition, and access to municipal infrastructure. While the new fibre connections do not rely on legacy infrastructure, their powerful market positions are directly linked to those earlier privileged positions.

The federal government decision on the appeal may be months away, but the competing submissions paint dramatically different pictures of how Canadian cities are addressing the critical need for affordable high-speed Internet services.

It suggests that Toronto and Ottawa are seemingly content to wait for the large telecom companies to install new networks and have no problem with the higher consumer and business costs that reduced competition would bring. Calgary, meanwhile, is actively building competitive networks, monitoring municipal developments around the world, and promoting a more open, competitive environment. All the mayors claim their cities are working to become leading hubs of innovation, yet only one seems to be doing much about it.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Why Mayors John Tory and Jim Watson Are Against Competition for Access to Affordable Fast Broadband appeared first on Michael Geist.

Canada’s Pharma Failure: Why High Drug Prices Are About to Soar Higher

Michael Geist Law RSS Feed - Tue, 2016/01/12 - 10:28

Appeared in the Toronto Star on December 21, 2015 as Why Canada’s High Drug Prices Are About to Soar Higher

Patent protections for the pharmaceutical companies have been among the most controversial aspects of recent high profile trade agreements such as the Canada – EU Trade Agreement (CETA) and the Trans Pacific Partnership (TPP). For example, CETA would require Canada to extend the term of protection for patents through a patent term restoration rule, which the Conservative government acknowledged would add billions to provincial health care costs. The TPP would reinforce those reforms, requiring changes even if CETA falls through.

The escalation in patent protections is set to occur just as drug prices hit all-time highs in Canada and pharmaceutical investment in research and development sinks to decade-long lows. Those results come from a recent report released by the Patent Medicines Panel Review Board (PMPRB), an independent body charged by the government to track patent medicines pricing and spending alongside investment in research and development by pharmaceutical companies.

The report indicates that Canadians pay more for patented drugs than consumers in France, the U.K., Italy, Sweden, and Switzerland (only the U.S. and Germany pay more among the countries tracked by the PMPRB). The PMPRB says that this represents a change over time:



In 2005, Canadian prices were, on average, approximately equal to or below corresponding prices in all comparators other than Italy. By 2014, Canadian prices were decidedly above prices in the United Kingdom, France and Italy, and somewhat higher than prices in Sweden and Switzerland.



Moreover, over the past 12 years, Canadian expenditures on drugs has outpaced all other comparator countries, including the U.S., with 184.4 per cent growth in total drug expenditures.

Not only have Canadian expenditures on drugs been high, but the ratio of sales to research and development in Canada by pharmaceutical companies has fallen to record lows.  In the 1980s, the industry lobbied for patent reforms that provided new rights and longer protections. In return, it promised to increase spending on research and development in Canada so that it would rise to 10 per cent of total sales by 1996. 

The report indicates that the ratio is now at only 4.4 per cent, the lowest recorded since 1988 (the peak rate was 11.7 per cent in 1995).

Indeed, Canada is a significant laggard when it comes to pharmaceutical research. Despite ranking as one of the 10 most important markets and paying some of the world’s highest prices, the ratio of sales to research in other comparator countries is triple the Canadian rate. In other words, in countries such as the UK and France, drug prices are lower and research expenditures are far higher.

The confluence of high prices, low investment in research and development, and ever-increasing demands for further patent protections has caused the PMPRB to question the effectiveness of the Canadian system. It notes with regard to CETA:

Its implementation will require amendments to the Patent Act to provide pharmaceutical patentees with up to two years of additional market exclusivity. Such a change would come at a time of high drug prices and record low R&D, causing some to question the effectiveness of the PMPRB and whether a policy balance conceived over 25 years ago continues to serve its intended purpose.



The concern over Canadian pharmaceutical policy is long overdue as the evidence leaves little doubt that catering to the demands of the largely foreign-based companies have yielded few benefits.

Canadians pay significantly more for pharmaceutical drugs than consumers in many other developed countries and the promised increased investment in research and development has not materialized. Yet despite the costly state of affairs, the government is set to reward the industry with even stronger protections that will result in an extension of the higher prices.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Canada’s Pharma Failure: Why High Drug Prices Are About to Soar Higher appeared first on Michael Geist.

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