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c a n a d i a n g e n e r i c p h a r m a c e u t i c a l a s s o c i at i o n
Generic manufacturers
invest three to six
years and an estimated
four million dollars to
bring a new generic
drug to market.
This booklet describes the process
approving all prescription drugs sold in
to bring a generic drug to market and
Canada. A generic manufacturer must
demonstrates the generic pharmaceutical
also prove that the active pharmaceutical
industry’s commitment to producing high
ingredients in the medicine are as
quality and effective drugs that benefit
pure, dissolve at the same rate and are
the Canadian health-care system, the
absorbed in the same manner as the
economy and the public at large. The
original brand-name product. A generic
development process consists of six
drug works the same way as a brand-
separate stages, which include a complex
name drug. The key difference is the
research and development process that
lower price.
requires sophisticated scientific and
advanced manufacturing technologies.
The generic pharmaceutical industry
In addition, generic drugs must undergo
employs more than 14,000 Canadians in
rigorous government review and approval.
high quality research and development
and manufacturing operations. For
Generic drugs offer the same quality,
more than 50 years, Canada’s generic
purity, effectiveness and safety as higher-
pharmaceutical industry has played a
priced brand-name drugs. The active
critical role in the country’s health-care
pharmaceutical ingredients in generic
system and its economy by providing
drugs must meet the same standards
safe, effective, and proven alternatives to
set by the federal Therapeutic Products
more expensive brand-name prescription
Directorate, which is responsible for
medicines.
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five key considerations when deciding to develop a new generic drug
MARKET SIZE - The single most important consideration is
SPECIALIZATION AND PRODUCT PORTFOLIO - A
the size of the market and the number of competing manu-
manufacturer will review their drug specialization and portfolio
facturers. What percentage of the market is captured by the
in order to identify any benefits from economies of scale in their
brand-name drug? What growth opportunities are there in this
production. If a manufacturer specializes in drugs of a certain
category of drug? Will there be generic competitors marketing
therapeutic class or dosage forms (e.g. injectables, ointments,
the same drug?
creams) the new drug might complement their production
processes. Alternatively, a manufacturer might want to expand
DEVELOPMENT & APPROVAL COSTS - An assessment
their overall product portfolio to become a more attractive
is made of the total cost associated with introducing a new
single source supplier to their customers.
generic drug. These costs include research and development
resources, product testing, legal and litigation fees, and
LEGAL CHALLENGES - Bringing a generic drug to market
federal and provincial approval requirements. All of the costs
typically includes litigation with respect to one or more patents
are measured against the market size and opportunities for
associated with the brand-name drug, which can be a costly
growth.
and time consuming process. Contrary to popular belief, not all
patents have merit or value. Brand-name companies routinely
TIMING - Time is a key consideration. How long will it take to
use strategic patenting and litigation to prolong their market
develop the drug? How long will it take to obtain Health Canada
monopolies and delay generic market entry.
approval? How long to obtain a provincial drug plan listing?
These timing considerations are measured against market
demand forecasts, changing demographics and the projected
date that a generic product can legally enter the market.
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securing active pharmaceutical ingredient(s)…
RESEARCH & DEVELOPMENT
securing active
Securing
pharmaceutical
Active
Formulation
ingredient
(s)…
Pharmaceutical
FEDERAL APPROVALS
Testing,
Manufacturing
and Production
Bioequivalency
and Clinical
Trials
Legal
Challenges
and Costs
PROVINCIAL LISTING
Provincial
Drug Plan
Listing
Ingredient(s)
●● The active pharmaceutical ingredient (API) is sourced from international
suppliers or produced internally.
●● The manufacturer conducts an assessment of any legal issues affecting the
availability and use of the API in the Canadian market.
●● The API must be tested for its quality and consistency prior to
formulation.
●● The supplier’s production facilities need to be assessed for quality control
and manufacturing practices.
From 6 months to
one year, with
the estimated
cost of $250,000.
●● The supplier’s ability to guarantee a stable supply of the API is critical to the
success of developing a generic drug.
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formulation…
RESEARCH & DEVELOPMENT
Securing
Active
Pharmaceutical
Ingredient(s)
formulation...
Formulation
PROVINCIAL LISTING
FEDERAL APPROVALS
Testing,
Manufacturing
and Production
Bioequivalency
and Clinical
Trials
Legal
Challenges
and Costs
Provincial
Drug Plan
Listing
●●
The brand-name product is reverse engineered to determine the composition of its
active pharmaceutical ingredients and non-active ingredients.
●●
Data is collected and reviewed. The product monograph of the brand-name drug
is analyzed.
From 9 months to
●●
Development of various formulations of the active and the non-active ingredients.
one year, with
●●
Various formulations are laboratory tested against the brand-name drug.
the estimated
●●
Development of a quality control matrix for formulation to be integrated into the
manufacturing process.
cost of $1,000,000.
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testing, manufacturing and production…
RESEARCH & DEVELOPMENT
Securing
Active
Pharmaceutical
Ingredient(s)
Formulation
PROVINCIAL LISTING
FEDERAL APPROVALS
testing,
Testing,
manufacturing
Manufacturing
and
…
andproduction
Production
Bioequivalency
and Clinical
Trials
Legal
Challenges
and Costs
Provincial
Drug Plan
Listing
●●
The generic drug formulations are further tested in the manufacturing setting.
●●
Complexity of drug manufacturing process determined.
●●
Manufacturing equipment designed and/or purchased for a dedicated production
line.
●●
Production quality control matrix developed and tested in full manufacturing setting
prior to federal approval.
one year, with
●●
Packaging production is designed and quality control matrix developed to ensure
consistency in product output.
cost of $250,000.
From 6 months to
the estimated
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bioequivalency and clinical trials…
RESEARCH & DEVELOPMENT
Securing
Active
Pharmaceutical
Ingredient(s)
Formulation
Testing,
Manufacturing
and Production
bioequivalency
Bioequivalency
and Clinical
trials...
Trials
and clinical
●●
Standard bioequivalency studies undertaken to measure the rate and extent of
absorption of the generic drug. The results of the studies are compared to the
same characteristics in the brand-name drug.
●●
The manufacturer files a submission with Health Canada, which contains data that
compares the generic drug to the brand-name product.
●●
Submissions must contain sufficient data for Health Canada to assess the
effectiveness of the generic drug to the brand-name drug. The submissions include
the evidence of tests conducted to measure the potency, purity and stability of the
new drug.
●●
PROVINCIAL LISTING
FEDERAL APPROVALS
Legal
Challenges
and Costs
Provincial
Drug Plan
Listing
From 3 to 6 months,
with the estimated
cost of $1,000,000.
Health Canada cannot approve a generic drug until any relevant legal issues are
addressed.
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legal challenges and costs…
RESEARCH & DEVELOPMENT
Securing
Active
Pharmaceutical
Ingredient(s)
Formulation
Testing,
Manufacturing
and Production
Bioequivalency
and Clinical
Trials
●●
Generic manufacturers are required, under the Patented Medicines (Notice of
Compliance) Regulations, to serve a Notice of Allegation on the brand-name
manufacturer that claims the generic product will not infringe any relevant patents.
●●
The brand-name manufacturer may apply to the court for an order prohibiting
Health Canada from approving the generic drug. Using this “automatic stay” the
brand-name manufacturer can prevent a generic product from entering the market
for up to 24 months simply by alleging patent infringement.
●●
PROVINCIAL LISTING
FEDERAL APPROVALS
This “automatic stay” is unique to the pharmaceutical industry in Canada, and has
been called “draconian” by the Supreme Court of Canada.
legal challenges
Legal
and
costs...
Challenges
and Costs
Provincial
Drug Plan
Listing
Up to two years,
with the estimated
cost of $2,000,000.
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legal challenges and costs…
RESEARCH & DEVELOPMENT
Securing
Active
Pharmaceutical
Ingredient(s)
Formulation
Testing,
Manufacturing
and Production
Bioequivalency
and Clinical
Trials
●●
Health Canada cannot issue its approval to the generic - a “Notice of Compliance”
(NOC) - until two years have elapsed or the court application has been dismissed.
●●
Being granted market authorization by Health Canada is not the end of potential
legal issues for the generic manufacturer. Generic products are launched at
considerable risk in Canada.
●●
PROVINCIAL LISTING
FEDERAL APPROVALS
The brand-name manufacturer has the ability to initiate a separate lawsuit on the
same patents under the Patent Act. The generic might succeed in litigation under
the Regulations, market the drug, and then be sued by the brand-name company
for patent infringement. This significantly increases legal costs and uncertainty for
generic manufacturers.
legal challenges
Legal
and
costs...
Challenges
and Costs
Provincial
Drug Plan
Listing
Unknown. Potential
risk exposure linked
to market value of
brand-name drug.
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provincial drug plan listing…
RESEARCH & DEVELOPMENT
Securing
Active
Pharmaceutical
Ingredient(s)
Formulation
Testing,
Manufacturing
and Production
Bioequivalency
and Clinical
Trials
●●
Once the generic drug has received Health Canada approval, it can be sold
anywhere in Canada.
●●
To be reimbursed under the provincial drug programs and obtain significant sales
volumes, the generic drug must be listed on provincial drug benefit plans.
●●
PROVINCIAL LISTING
FEDERAL APPROVALS
The generic drug manufacturer must submit a separate application to each province
and await response. It can take up to one full year to have the new generic drug
listed in all the provinces.
Legal
Challenges
and Costs
provincial
Provincial
Drug Plan
listing...
Listing
drug plan
From 3 months to
one year, with the
estimated cost
of $250,000 - $500,000.
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summary of total cost of time and money…
RESEARCH & DEVELOPMENT
Securing
Active
Pharmaceutical
Ingredient(s)
Formulation
PROVINCIAL LISTING
FEDERAL APPROVALS
Testing,
Manufacturing
and Production
Bioequivalency
Studies
●●
When a generic manufacturer decides to produce and market a new generic drug,
it typically requires up to six years to bring the new product to market.
●●
At each stage of the development the generic manufacturer invests heavily in
research, development and human resources.
●●
It can take up to six years on the market before a generic manufacturer is able
to recover any of its R&D and capital investments, let alone earn a return on the
investment.
●●
Generic manufacturers currently face a great deal of uncertainty, which poses a
significant challenge in making sound business decisions. This uncertainty could also
impact the timely availability of cost-saving generic drugs for taxpayers, employers
and patients in the future.
Legal
Challenges
and Costs
Provincial
Drug Plan
Listing
Generic manufacturers
invest three to six years
and an estimated four
million dollars to bring a
new generic drug
to market.
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