Healthcare Policy

Healthcare Policy 14(3) February 2019 : 10-18.doi:10.12927/hcpol.2019.25796
Discussion and Debate

Increase in Drug Spending in Canada Due to Extension of Data Protection for Biologics: A Descriptive Study

Joel Lexchin

Abstract

Introduction: Biologics are currently protected from competition by eight years of data protection. The renegotiated North American Free Trade Agreement (NAFTA) increases data protection from 8 to 10 years. This study investigates the effect of such an extension on drug spending in Canada.

Methods: A list of currently available biologics eligible for data protection along with their 2017 sales was compiled. Two years were added to the current expiration date of data protection to see if it exceeded patent protection, and any theoretical change in spending due to delayed competition was calculated. The number of biologics approved after January 1, 1995, that have competition and the time until competition started was analyzed. Theoretical competition due to increased data protection for biologics where data protection has already expired was examined.

Results: Depending on how much of the market is captured by biologic competitors and how strong the patents are, lost savings from data protection extension could range from $0 to $305.8 million. One biologic competitor currently on the market could theoretically have been affected by an increase in data protection. Increased data protection would have had minor effects on products that have already lost data protection.

Discussion: The potential impact on drug expenditures of a two-year extension in data protection is highly variable. Possible increases in spending on biologics strengthen the rationale for a national pharmacare plan where monopsony buying power would help to control drug prices overall and offset increased spending on biologics.

 

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