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This has to do with something called intellectual property rights (IPRs). Usually when talk turns to IPRs people think about patents. But there’s also something called data protection.

The data that’s being protected is information about the effectiveness and safety of drugs that comes out of the clinical trials that brand-name drug companies do when they want approval to market a new drug.

Generic drugs essential to pharmacare

The data is the private property of the brand-name companies and can’t be used by anyone else, including generic companies, for a period of time.

It would be very costly for generic companies to do the original testing all over again, and it would also be unethical because the results of the trials are already known. So generic companies use the data once it’s no longer protected.

Data protection is not a sexy topic, but it’s important in determining how quickly some low-cost generics can reach the market. The presence of generics keeps public drug plans affordable and will be essential for any pharmacare plan.

Right now, seven out of every 10 prescriptions are filled with generic drugs, but paying for generics only uses up 21 cents out of every dollar that is spent on prescription drugs in Canada. A generic prescription is about one-third the price of a brand-name one.

Patents already mean that brand-name drugs are on the Canadian market for more than 12 years without any competition. When patents run out, generic drugs can be sold, but sometimes patents expire before the data protection period is up. Until the data protection period ends, there can’t be any generics. What’s more, unlike patents, data protection can’t be challenged in the courts.