Supreme Court OKs production of cheaper, generic Viagra

OTTAWA -- Canada's market for generic erectile dysfunction drugs was thrown open for business Thursday after the Supreme Court of Canada invalidated the Viagra patent held by the pharmaceutical giant Pfizer.

Hours after Teva Canada, the Canadian drug company, won its appeal before the high court, it posted notice of its own generic version on its website -- the first commercial challenge to Pfizer's 14-year Viagra monopoly.

The Supreme Court, in an unanimous 7-0 ruling, annulled Pfizer's Viagra patent, saying it tried to "game" the Canadian system. The high court sided with Teva Canada's challenge of the legitimacy of the patent, paving the way for cheaper, generic versions.

The decision has big implications for users of erectile dysfunction drugs and the pharmaceutical industry because it allows companies to create generic versions that are usually cheaper for consumers.

Teva Canada had no immediate comment, but its website featured a notice entitled, "Introducing Novo-Sildenafil," a product it described as was "a generic alternative to Viagra."

The notice contained few other details, except to say the company's products are available by prescription and that patients and customers are encouraged to discuss their options with health care practitioners.

"Canadian consumers will be saving money on it. There will probably be other generics involved soon enough," said Richard Gold, an intellectual property expert at Montreal's McGill University.

The ruling wipes out Pfizer's market dominance with Viagra. Its patent was scheduled to expire in 2014.

Pfizer said it was disappointed with the ruling.

"Pfizer expects to face generic competition in Canada shortly," the company said in a statement issued by its New York office. "Pfizer will continue to vigorously defend against challenges to its intellectual property."

The case also has broad commercial implications for patent law.

The Patent Act gives a company a 16-year monopoly on a product if it can prove it is a new invention. In return, the company must show publicly in its application how it created its product, so others can copy it later.

"Pfizer gained a benefit from the act -- exclusive monopoly rights -- while withholding disclosure in spite of its disclosure obligations under the act," Justice Louis LeBel wrote on behalf of the court.

"As a matter of policy and sound statutory interpretation, patentees cannot be allowed to 'game' the system in this way. This, in my view, is the key issue in this appeal.

"Pfizer had the information needed to disclose the useful compound and chose not to release it."

This case turned on whether Pfizer deliberately thwarted Teva's ability to copy the key chemical compound of the drug.

Teva challenged the validity of the Pfizer patent, claiming it did not meet the law's disclosure requirements.

In its original patent application, Pfizer listed a staggering number of chemical compounds, but didn't specify which one actually worked -- sildenafil.

Pfizer obtained the patent in 1998 after applying four years earlier. It was first challenged by the generic drug maker in 2007.

Teva originally questioned Pfizer's patent in Federal Court and the Federal Court of Appeal, but lost at both levels.

The ruling sends a strong message to future patent applicants that "gaming" the system will no longer work, said Gold.

"This is particularly important in the pharmaceutical industry where both brand name and generic companies play games, wasting court resources and putting money into litigation rather than into actual research."

Gold said in recent years several large companies have shut down their research and development branches in the Canadian pharmaceutical industry.

"This is a good day for Canadian patent law, for Canadian courts and for Canadians," he said. "With this clear signal, the court has put the focus of the patent system back on innovation and away from game playing and strategy that only harms Canadians."

In its statement, Pfizer said the patent process spurs innovation.

"Patents provide a vital incentive for biopharmaceutical companies to invest in new and life-saving medicines that benefit millions of patients worldwide. At Pfizer, we apply science and our global resources to improve health and well-being at every stage of life."