Updated on 20 February 2013
Eli Lilly CEO Dr John Lechleiter warns that Canadian court's patent rulings will lead to job cuts
Singapore: Dr John Lechleiter, CEO, Eli Lilly and Co, US, has cautioned that the recent Canadian court rulings favoring generic drug producers will lead to driving jobs out of the country. He said that earlier court rulings, which struck down Canadian patents on three of the company's top drugs, have cost the firm more than $1 billion in revenue and forced it to axe about 280 jobs since 2006, leaving it with about 500 staff in Canada.
Lilly had launched a challenge under the North American free-trade agreement during last December, demanding $100 million compensation, after the Federal Court of Appeal tossed out its 1996 Canadian patent for its attention-deficit hyperactivity disorder drug Strattera. Lilly also lost patent cases over Evista, an osteoporosis drug, and Zyprexa, for schizophrenia. It has asked the Supreme Court of Canada to review the Zyprexa decision but the court declined to hear a challenge even of the Strattera decision. About 15 drug patents held by other pharmaceutical companies have also been invalidated in the same way, Dr Lechleiter said.
Dr Lechleiter said that it is unfair for Canadian judges to strike down drug patents (which the firm has called the "promise doctrine") for failing to include sufficient testing results in the original applications, filed years ago. He also pointed out that judges are demanding more proof that the proposed drugs will work than is required in most other developed countries, thus violating various international treaties, including NAFTA. However, several patent law experts and individuals from the generics industry say that Lilly is exaggerating the 'promise doctrine' issue.
Dr Lechleiter, who said Lilly spent $50 million on R&D in Canada in 2011, blamed most of his firm's job cuts on Canada's courts. He said the rulings create "a real chill" for innovation at both big and small biotech companies in Canada. And if Canada demands that companies wait until they have more conclusive results from human clinical trials, which are disclosed, before seeking patents, competitors could jump ahead of them, he said.
Mr Jim Keon, president, Canadian Generic Pharmaceutical Association, said that brand-name pharmaceutical companies such as Lilly enjoy stronger intellectual property protection here than in most other countries: He added, "The reality is they didn't meet the requirements. To say that in any way that their patent protection in Canada is in any way inadequate, I just cannot accept."