12 The Pharmaceutical Industry in The Great White
North and Land of the Rising Sun: A Comparison ofRegulatory Data Protection in Canada and Japan
Vishva V. Ramlall (*)

Regulatory data protection (RDP) is gaining prominence as a category of intellectual property (IP) rights
due to its significant economic implications. RDP is entrenched in key international IP agreements, however,countries have not consistently implemented it. While both Canada and Japan provide for RDP, the effectivenessand the level of protection vary considerably. This research serves a prospective role by analyzing the impact ofimpending developments resulting from mounting pressures to increase RDP from domestic and foreign stimuli
in these two countries.
The Canadian approach, supported by a high level domestic appellate court, is to restrictively interpret theNorth American Free Trade Agreement’s RDP provisions, which provide more specificity than those of the
WTO’s Trade-related Aspects of Intellectual Property Rights Agreement. This approach is consistent with thebalance which Canadian courts and government continually seek to achieve in health-related areas of IP. Thisbalance has generated a strong generic sector and condemnation from the innovative sector.
Japan, under the guise of a complex post-marketing approval re-examination period, provides for strong
RDP and market exclusivity. The inertia of the Japanese innovative sector, coupled with the commitment at thepolitical level, has resulted in a mandated study of the current RDP provisions with a view to increase protection.
The existing balance of power between the Japanese innovative and generic sectors, and prevailing attitudes
suggest that the proposed increase is a fait accompli.

1. Introduction

often-neglected category of IP;

The pharmaceutical industry pits two rivalling
sector against each other: (1) the innovator orbrand name sector; and (2) the generic sector.
Apart from the lucrative profits at stake, is the
myriad of complex policy questions, running the
gamut of ethics, human rights, health care, politics,
social issues, as well as business and propriety
rights. Unlike many technology-related industries
where intellectual property (hereinafter “IP”)
rights alone are key, a complex regulatory
infrastructureis
also
imposedonthepharmaceutical industry. The industry is not wellunderstood, in part because of the complexity ofdrug regulation and that many aspects remain
shrouded in secrecy from the public.
Research into the pharmaceutical industry’s IP
issues has tended to focus on patents and to alesser extent trademarks. The important role ofother categories of IP protection to the industry is
increasingly being recognized and brought to thefore by leading scholars including Peter Drahos andJohn Braithwaite. (*1) Trevor Cook’s, thewell-respected U.K. IP solicitor, special report on
regulatory data protection (hereinafter “RDP”),
highlighted the growing importance of thisAs testing directed to securing regulatory
approvals in such sectors becomes ever more
expensive [Footnote omitted] and approvals moredifficult to secure, the test data itself has become
a valuable asset the protection of which iscapable of conferring exclusivity reminiscent of
more traditional intellectual property rights suchas patents. (*2)
I was motivated to conduct research on RDP
because it is emerging as a hot issue on theinternational front and it has significant economic
implications.
RDP also provides a unique
opportunity to study the inter-relationship between
IP rights and the regulatory infrastructure. Most
importantly, there is a relative paucity of literaturefor key jurisdictions including Canada and Japan.
Various experts, including Trevor Cook, haveacknowledged the need for intensive analysis ofthese key jurisdictions. (*3) This paper aims to fill
those gaps.
On the surface, the geography of the RDP
regimes of the Great White North and Land of the
Rising Sun are remarkably different. The level ofprotection and effectiveness of the Canadian and(*) B.A., LL.B., J.D., BCL(Oxon)(*1) Drahos and Braithwaite at 6.
(*2) Cook at 1.
(*3) Cook at 105.

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Japanese regimes vary considerably. However,under the surface, both regimes have many similargeological features, which makes for an interesting
comparison. Unfortunately, most North Americanand Asian researchers rarely have the opportunity
to conduct primary research on RDP in bothregions. Fortunately, the Japanese Institute ofIntellectual Property generously made this possible
by inviting me to conduct this research.
The growing international harmonization of IP
systems and competition between innovative
companies and generics, has led to both regimes
facing stimuli either domestically and/orinternationally to give stronger RDP to innovative
companies.
The Canadian regime is highly
criticised for providing inadequate protection
domestically by the innovative sector, andinternationally as seen in recent United States
Trade Representative (USTR) Annual Special 301
Reports. In contrast, the Japanese regime, thoughconvoluted, is quite favourable to innovators. As aresult of pressure from its innovative sector and adifferent philosophy towards IP protection, theJapanese government is now actively studying theirregime with a view to extending the current RDP
term.
I begin by outlining the case both for andagainst RDP. After that, I examine the impact of key
international agreements such as the WTO TRIPS
Agreement and the North American Free Trade
Agreement, and provide a synopsis of the complex
regulatory process. The majority of the paper
critically evaluates the RDP regimes in Canada andJapan, and the implications for both the innovativeand generic sectors as well as society at large.
The complexities of both regimes are firstdemystified.
Subsequently, the domestic andinternational stimuli which challenge them areplaced in context with a view to discerning the
optimum mix. The concluding sections for bothcountries speculate on the shape of things to come.

2. The Case for Regulatory Data
Protection
According to the classic innovator view of RDP,
subsequent applicants (typically they are generics,
but could include other innovative competitors)
should be precluded from relying either directly or
indirectly on the data submitted to the regulator for
approval of the innovator’s reference product.
Given the costs involved in generating such data, it
is generally uneconomic for subsequent applicantsto generate their own data. As such, a de facto
right favouring the first applicant is conferred

either as “exclusivity for a limited period, or more
rarely in practice, no more than a right toremuneration during such period.” (*4)
According to IP experts including Trevor Cook,
Carlos Correa and Michael Blakeney, this view isbeing justified on the basis of equity and healthpolicy. A recent study by the international
federation representing innovative companies
indicates that RDP has significant economic
implications ranging in the hundreds of millions ofdollars. (*5) This finding was confirmed by myinterviews with Canadian and Japanese innovative
companies and their associations. Innovative
companies need RDP to recover their return on
investment.
It is an important incentive tosupport the R&D needed to develop drugs for
tomorrow’s diseases. Without RDP, generics willbe ‘free riding’ on the backs of innovative
companies’ labour. According to Randall Marusyk,
Chair of the Legal and Litigation Department of aleading Canadian pharmaceutical patent firm,“Innovative companies should not have to simply
hand over their proprietary data to generics.” (*6)
With RDP, generics also benefit because ultimately
there are more products available for them tomarket. RDP is most valuable where there may
be no patent protection, or weak patent protection
as with ‘second generation’ patents. Such situations
give credence to innovative companies’ opposition
to a growing view that RDP should not extend
beyond the period of patent protection.

3. The Case Against Regulatory Data
Protection
Generics, developing countries, and many
non-governmental organizations (NGOs) champion
the case against RDP. In his extensive work on
RDP for the South Centre, Carlos Correa discussed
the public interest in promoting competition andpreventing RDP from becoming the means ofblocking the timely entrance of generics to
off-patent drugs. (*7) The social cost to thedeveloping world of delaying generics could bequite severe. RDP also increases the social,
ethical, and economic costs of repetitive animal andhuman testing.

4. Regulatory Data Protection at theInternational Level(a) TRIPS
Canada and Japan are parties to key
international agreements, which inextricably shape
their domestic policy. Article 39.3 of the World(*4) Cook at 2.
(*5) IFPMA Review (Revised).
(*6) Interview with Randall Marusyk.
(*7) Correa at 6.

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Trade Organization’s Agreement on Trade-related
Aspects of Intellectual Property Rights (TRIPS) (*8)
was the first, and remains the most important,provision in a multilateral instrument dealing with
RDP. During the controversial negotiations, many
developing countries took the position that RDP
was not an IP category and thus did not belong in
the agreement. In contrast, RDP proponents
including the Swiss argued that, “[it] embodies thecentral idea underlying IPR protection, namely thatof the preservation of the exclusive commercial useof information created by investment of time,
human and financial resources.” (*9)
The literal interpretation of the expression‘undisclosed information’, which is contained in thetitle to Section 7 of TRIPS, is misleading. What is
protected is not undisclosed information, but rather“information disclosed selectively and underprecise conditions.” (*10) The term was used to avoid
referring to an expression linked to any particularlegal system. However, TRIPS leaves much unsaid
about RDP.
Not surprisingly, RDP varies
considerably among WTO Members.
It iscontroversial whether these permutations are
consistent with the letter and spirit of TRIPS. For
example, there is considerable divergence on themeaning of ‘new chemical entity’.
Is it anabsolute (worldwide) or relative (local) standard?
Does it cover ‘second indication’ pharmaceuticalpatents? Perhaps, the most difficult issue iswhether government use of data submitted by an
innovative company to determine bioequivalence ofa generic is a ‘commercial use’. If the commercial
threshold is not met, the determination whether
such use is unfair is unnecessary. According toDaniel Gervais’s authoritative TRIPS drafting
history and analysis,“This question was
mentioned repeatedly during the negotiation.” (*11)
Those favouring a narrowly circumscribed RDP
right, including Carlos Correa, argue that this typeof government use is not commercial. (*12) The U.S.
and other countries with strong innovative sectors
argue to the contrary.
Another recurring issue is whether RDP
confers exclusivity.
Contrary to popular

misconception, RDP is not a sui generis system, butrather is a category of IP pursuant to TRIPS Article
1.2. Using other categories of IP as an example,
Carlos Correa demonstrates that it cannot be
inferred that RDP requires exclusive rights. In
addition, TRIPS is silent as to the period ofprotection, if any. Nonetheless, many countries
such as the U.S. clearly confer a period of
exclusivity. Jayashree Watal, former TRIPS
negotiator for India, summed it up best, “In the end
in the TRIPS text there is no clear obligation not torely on the test data for the second or subsequent
applicants nor a fixed duration of market
exclusivity…This is a clear contrast to thecorresponding provisions in NAFTA.” (*13)(b) NAFTA
The North American Free Trade Agreement(NAFTA)
preceded
TRIPS
chronologically.
However, several of NAFTA’s IP provisions,
including those on RDP, provide greater specificity
than the corresponding ones in TRIPS. In part,
this is because of the different interests at stakeand that many of the negotiators were the same as
those in the TRIPS negotiations which were quite
mature at the time of NAFTA’s signing. (*14) NAFTA
Articles 1711(5), (6) and (7) protect the confidential
information that companies must submit togovernments to obtain marketing approval for new
pharmaceutical products for a five-year period.

5. The Regulatory Process Explained
The introduction of pharmaceuticals, whether‘new’ or generic versions, is governed by a maze oflegislation, regulations and practice. The key
Canadian legal instruments are the Food and Drugs
Act, (*15) Food and Drug Regulations, (*16) Patent Act,(*17)
and Patented Medicines (Notice of Compliance)
Regulations. (*18) The Therapeutic Products
Directorate (TPD), a division of Health Canada, is
the Canadian federal authority that regulates
pharmaceutical drugs and medical devices forhuman use. In Japan, the Pharmaceutical Affairs
Law primarily controls the regulation of(*8) Article 39.3 of TRIPS provides: “Members, when requiring as a condition of approving the marketing of pharmaceutical orof agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, theorigination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition,
Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken
to ensure that the data are protected against unfair commercial use.”(*9) Submission from the Swiss delegation in WTO document MTN.GNG/NG11/17 of 23 January 1990.
(*10) Gervais at 185.
(*11) Gervais at 188.
(*12) Correa at 28-30.
(*13) Watal at 199.
(*14) Interview with John Gero.
(*15) R.S., c. F-27 (Hereinafter “FDA”).
(*16) C.R.C., c. 870 (Hereinafter “FDA Regulations”).
(*17) R.S.C. 1985, c. P-4, as amended (Hereinafter “Patent Act”).
(*18) SOR/93-133 (Hereinafter “NOC Regulations”).

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pharmaceutical drugs. The Pharmaceutical Affairs
Bureau of the Ministry of Health, Labor andWelfare (MHLW) is the equivalent of the Canadian
TPD. Like Canada, Japan utilizes various guidance
documents to supplement its legislation.
In developed countries such as Canada andJapan, the ‘new drug’ approval process consists offour phases: Pre-Clinical; Clinical; New Drug
Application Review; and Marketing. (*19) The new
drug sponsor (an innovative company) submits anapplication to the regulator. The application must
disclose confidential information to the regulator
including detailed reports of safety tests andsubstantial evidence of the clinical effectiveness ofthe new product. If the regulator is satisfied withthe safety and effectiveness of the drug, it may
allow the drug to be marketed. In both countries
there is a fast track or expedited mechanism forimportant new drugs. The drug approval process
for generics, though still lengthy, is expedited andsimplified through reliance on comparative
bioavailability studies to establish safety andefficacy.
Generic submissions are guided byvarious bioavailability guidelines.

6. Regulatory Data Protection in
CanadaCanada’s RDP regime is highly criticised,viewed with scepticism similar to its ‘chequered
history’ in relation to pharmaceutical innovators.
Allegedly, generics benefit from ‘spring boarding’on the proprietary data of innovative companies
during the period of protection. In the USTR 2003
Special 301 Report, Canada appeared in the ‘watch
list’ category for, inter alia, not providing effective
data exclusivity protection.
Subsection C.08.004.1 of the Food and Drug
Regulations provides for RDP. Important litigationin Canada over this subsection has cast the
spotlight on the RDP regime as highlighted in the2001 USTR Special 301 Report. In the case ofBayer Inc. v. The Attorney General of Canada and theMinister of Health, Apotex Inc. and Novopharm
Limited intervening, [1999] F.C.J. No. 826 (FCA){Leave to the Supreme Court of Canada wasdismissed}, there were two key issues before theFederal Court of Appeal (FCA): (1) does the genericapproval system follow the regulations; and (2) are
the regulations NAFTA compliant?
The main issue before the FCA was whether
there is examination and reliance by the regulator
on the confidential information originally filed by
the innovator, when an innovator’s competitorseeks approval of its product based on
bioequivalence. The innovator (Bayer Inc.) argued

that the regulator must explicitly or implicitly haveexamined and relied upon such confidential
information in approving a product based on
bioequivalence. Accordingly, Bayer Inc. argued
that the regulator may not allow the generic to bemarketed in Canada (i.e., the issuance of a Notice ofCompliance (NOC)) earlier than five years after thedate of issuance of the NOC to the innovator for its
reference product. The FCA disagreed, reasoningthat Bayer Inc.’s interpretation would invariably
provide a minimum of five years of market
protection to an innovator. The FCA also referredto the Regulatory Impact Analysis Statement as
support for the view that the regulation’s intent
was that the confidential information filed by theinnovator may or may not be examined and relied
on by the government.
The other key issue the FCA considered waswhether the regulation was consistent with Article
1711 of NAFTA. In summary, the FCA held that
NAFTA Article 1711 only applies when the
Minister relies upon confidential information ortrade secrets. When the confidential informationin the innovator’s application is not relied upon, the
NAFTA provision is thus inapplicable. If theinnovator’s interpretation of the regulation was
accepted, an NOC for a generic version of a drug
would not in practice be issued before five years
after the NOC was issued for the innovator’sreference product. According to Alice Tseng, alawyer and pharmacist at a major Canadian law firm,“[s]uch an interpretation would have resulted ininnovators receiving protection analogous to patent
protection from non-patent legislation.” (*20) This
concern was central in the court’s reasoning.
The issue is bubbling in the innovative
sector’s cauldron.
At a 2002 Pharmaceutical
Conference, Murray Elston, President of Canada’s
Research-Based
Pharmaceutical
Companies(RX&D) complained, “…Canada still lags behind
other countries in terms of pharmaceutical patents
because Canada does not have: effective dataprotection on research…” Since NAFTA is TRIPS
plus with respect to RDP and the Canadian regime
passed NAFTA muster it should also pass TRIPS
scrutiny.
However, the decision was from a
Canadian domestic court. Only a decision from a
WTO Panel or its Appellate Body can give finality.
In an attempt to solidify and possibly increase
RDP protection, the issue is featured prominently
in regional and bilateral negotiations involving the
U.S. Canada is an active participant in one suchnegotiation, the ongoing Free Trade Area of theAmericas (FTAA) negotiations. The U.S. sees the
FTAA as an opportunity to ensure that Canada, andthe developing countries involved, more fully(*19) See Ramlall – Oxford Dissertation for a thorough explanation of the regulatory process. I am grateful to officials of Health
Canada for shedding light on the Canadian regulatory regime.
(*20) Tseng.

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implement their TRIPS - RDP obligations, andpossibly achieve TRIPS plus RDP levels. The U.S.
is concerned with Canada because many Canadianinnovative companies are subsidiaries of American
corporations. Canada is also a developed country
with a strong reputation on the international stage.
As such, the U.S.’s principal concern is that if
Canada does not fully implement the U.S. version of
TRIPS - RDP provisions, a negative precedent
could be set for other countries, especiallydeveloping and least-developed countries (LDCs).
This was a motivating factor behind the U.S. WTO
challenge of Canada’s term of protection for certain
patents. The E.U. has similar concerns with
Canada, which also motivated their WTO challengeof Canada’s pharmaceutical patent regime. RDP isof particular importance in many developing
countries, which until 2000 did not have to provide
patent protection for pharmaceuticals.
Somedeveloping countries (e.g., India) still benefit until
2005 under the TRIPS Article 65.4 transitional
provisions. When combined with often-ineffective
enforcement of IP rights in these countries, there
remains a large pool of pharmaceutical productswith minimal IP protection.
The U.S. has gone further than ‘naming andshaming’ countries perceived to have insufficient
RDP protection in their annual Special 301 Reports.
For instance, in May 1996, the U.S. filed a WTO
dispute challenging Argentina’s RDP regime.
Developing countries have been fighting back,publicly putting forth their views both collectively
and individually on their interpretation of TRIPS
Article 39.3.
For instance, during WTO
discussions on the access to medicines issue, asubmission from various developing countries
indicated that TRIPS “clearly avoids the treatmentof undisclosed information as a “property” and does
not require granting “exclusive” rights to theowner of the data.” (*21)
With the ostensible resolution of the access to
medicine issue (resulting from the August 30, 2003
decision of the WTO General Council), (*22) the U.S.
may be more likely to reinvigorate its emphasis on
RDP.
They may perceive the international
environment to be less precarious and the leverageof the developing world to be diminished. If thiscomes to fruition, Canada may very likely find itself
once again an unwilling party brought before the
WTO dispute settlement system.

7. Regulatory Data Protection inJapan
Although Japan has not recently been singled
out internationally (for instance, in the USTR
Special 301 annual reports) its IP regime has notbeen immune from criticism. Criticism of Japan’s
RDP regime has diminished in view of the growing
recognition that Japan has one of the stronger RDP
regimes favouring innovative companies. The
Japanese regime is convoluted. (*23) According to
Trevor Cook, Japan provides indirect and de facto
RDP by “conferring in favour of the first application
for approval a period of effective regulatory
exclusivity tied to post-marketing surveillance
obligations.” (*24)
Article 14 of Japan’s Pharmaceutical Affairs
Law provides for RDP. Japan employs a system ofre-evaluation of drugs whereby the efficacy andsafety of a drug, which has already been approved,is reconsidered on the basis of the current status of
medical and pharmaceutical sciences. The
re-examination period varies depending on the typeof drug. During the re-examination period, a new
applicant must provide its own data that isequivalent and comparable to that submitted by theapplicant for the reference product. The purposeof the re-examination period is to allow monitoringfor safety of the original drug. In practice, it iseasier for a generic to obtain approval after there-examination period, although in theory theapproval process is similar.
The Japan Pharmaceutical Manufacturers
Association (JPMA) and its members have beenpushing for an increase in RPD and to make theregime more straightforward. (*25) They are pushing
to have the term of protection increased from thegeneral period for most drugs (i.e., 6 years) to 10
years. The JPMA has been negotiating with the
MHLW for over 10 years. According to information
gathered during my interviews with the JPMA andseveral innovative companies, the current period ofprotection is too short to secure their return on
investment. As a result, some new drugs are notbeing brought to the market. With increased RDP
protection, generics would also benefit by having
more drugs to copy. The momentum favouring theJapanese innovative sector is the considerable pushin the E.U. to harmonize the term of RDP
protection for all national registrations. Not
surprisingly, the Japanese innovative sector would
like the same competitive advantage.

(*21) WTO Document IP/C/W/296 of 19 June 2001 at paragraphs 39-40.
(*22) WTO Document WT/L/540 of 1 September 2003. See also WTO General Council Chairperson’s statement of 30 August
2003.
(*23) I am grateful to the various Japanese academics and all of the other individuals who shared their knowledge with meduring my interviews for helping me to discern the Japanese regime.
(*24) Cook at 113.
(*25) Interviews with the JPMA and various Japanese innovative companies.

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On December 17, 2003 the European
Parliament approved the E.U. Medicinal Products
legislation which includes changes to RDP. It is
known as the ‘8 + 2’ rule in that “[e]ight years isgiven for data protection, with 10 years marketing
protection, extendable to 11 years if the product isfound to bring a significant clinical benefit incomparison with existing therapies.” (*26) In effect,
innovative companies will be given exclusive rights
over data they submit for regulatory approval foreight years after the drug goes on the market. In
the subsequent two years, the data is available forgeneric companies to start preparing andregistering equivalents. European innovative andgeneric companies viewed the legislation as an
acceptable compromise. This piece of legislation
is now with the E.U.’s Council of Ministers for final
approval. With these recent developments in
Europe, the JPMA and its members are likely tohave further leverage in pushing for increased
protection.
During my interviews with the JPMA and its
members I noted that while the E.U. may be one
basis for comparison, both the U.S. and Canada
currently provide only 5 years of RDP. While theinnovative sector in these countries would no doubt
like to see such an increase, there is no imminent
likelihood of such changes. In response, the JPMA
and its members downplayed a North Americancomparison. Instead, they noted that American
and Canadian innovative companies have anotherweapon, unavailable to their Japanese counterparts,
in their arsenal to stave off generics. That weapon
is a virtual automatic stay of proceedings uponlaunching certain proceedings under the U.S.
Hatch-Waxman Act and under the Canadian NOC
Regulations. In the U.S. a 30-month stay is
obtained, whereas in Canada it is a 24-month stay.
The availability, and frequency at which theseproceedings are brought, draw the ire of Canadian
generics. The JPMA and its members would also
be hesitant to draw a comparison with Canada since
it does not offer patent term restoration (as does
the U.S. and Japan) or Supplemental Protection
Certificates, which have similar effect in the E.U.
Nonetheless, the JPMA and its members havesuccessfully convinced the Japanese government toactively study this issue with a view towards
increasing protection.
On July 8, 2003 theIntellectual Property Headquarters released a
detailed blue-print for Japan to become “anintellectual property-based nation.” One of theitems discussed was to consider the reinforcementof the protection of pharmaceutical test data,

Considering the reinforcement of theprotection of pharmaceutical test data
From the viewpoint of ensuring the quality,
effectiveness, and safety of a newpharmaceutical after it has been placed on themarket, the test data to be submitted for
obtaining approval for a new drug from the
Ministry of Health, Labor and Welfare is
subject to a re-examination period of six years,
which effectively protects the data from being
used later for filing an application forequivalent drugs (generics) in a simplified
manner. By the end of FY 2005, the GOJ willconsider strengthening protection of such datain order to protect intellectual property andincrease the incentive for the development of
new drugs from broad perspectives, including
the possibility of making the term of protection
10 years.
(Ministry of Health, Labor and Welfare andMinistry of Economy, Trade and Industry) (*27)
It is likely that such an increase is faite
accompli given the language of the document,
prevailing attitudes towards generic companies inJapan, and the relative small market share ofJapanese generics.
Publicly, Japanese generics have voiced
relatively quiet opposition to the proposed
strengthening of RDP. For instance, on June 2,
2003 the Japan Generic Pharmaceutical ResearchGroup announced, “[t]he 10-year data protection
requested by the JPMA is substantially a system forextending a patent term and is a movement ofeliminating generics…” (*28) It is apparent thatJapanese generics have not fought this proposed
increase as vehemently as their counterparts in
Canada or the U.S. would have done. The reality
is that Japanese generics are mostly small or
medium sized entities that are not well organized.
Collectively they are also not economicallysignificant to the Japanese economy as theircounterparts in Canada. According to information
gathered during my interview with a Japanesegeneric, the generic sector occupies only about 10 20% of the market share for pharmaceuticals post
expiration of patent protection (including the periodof patent term restoration). In contrast, according
to the Canadian generic association, the national
share of generic prescriptions for the 12-month
period ending June 2003 was 40.4%.
This passive resistance by the Japanesegeneric sector may reflect a certain degree ofpragmatism. The government has a remarkablepro innovative sector bias. Thus, Japanese generics(*26) European Parliament UK Office – Latest News, December 17th, 2003.
(*27) “Strategic Program for the Creation, Protection and Exploitation of Intellectual Property” by the Intellectual Property
Policy Headquarters, July 8, 2003.
(*28) JPMA deck (undated) provided during JPMA Interview.

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accurately understand that there is little they can
do to alter the course, which has been set forincreasing RDP. The generic sector in Japan has
many grave concerns of its own with the existing
pharmaceutical regime. Perhaps, their strategy is
to concentrate on their existing concerns in thehope that the government might address at least
some of them in the final package of amendments.
One key frustration is that generic pharmaceuticals
containing previously approved active ingredientsare listed only once per year (in July) by the Japan’s
National Health Insurance (NHI) system.
In
contrast, newly approved innovators’ drugs areadded to the NHI price list four times annually.
Effectively, through this administrative practice, thetimely entry of generics into the Japanese market isdelayed. (*29)
Unlike their Canadian counterparts, Japanesegenerics do not flaunt their successes, insteadchoosing to maintain a low profile, because of their‘shy’ corporate culture.
This mitigates thepotential influence that the sector can exert on thegovernment. In time, the importance of thegeneric sector will rise. The government of Japan,
like those in many other developed countries suchas Canada, is faced with increasing pressure from arapidly ageing population and the associated risingcost of health care. A more viable Japanesegeneric sector could possible provide a muchneeded reprieve. At the judicial level, the tide
may be turning in the Japanese generics' favour.
In a relatively recent landmark decision of theJapanese Supreme Court, Japanese generics scoredan important victory over innovative companies. (*30)

Minister, see IP (and RDP in particular) as a critical
tool to improve their international competitivenessand to promote national economic growth.
Despite the importance of RDP to thepharmaceutical industry in Canada and Japan, there
has been surprisingly minimal discussion in thescholarly literature. This paper contributes to abetter understanding of the current RDP regimes in
Canada and Japan. It also serves a prospectiverole by analyzing the impact of impending
developments.
More importantly, the paper
stimulates further discussion on what should be theappropriate levels of RDP in Canada and Japan in
the face of mounting pressures to increase
protection from domestic and foreign stimuli.

8. Conclusion
RDP is becoming increasingly entrenched as acore category of IP rights. Clearly much haschanged from the not so distant past, when the
hotly contested question was whether to include
RDP into the TRIPS Agreement during the
Uruguay round of negotiations. The debate has
progressed to what level of RDP is appropriate in
the context of ensuring the ‘right’ balance between
the rights of innovators and those of society tohealth at affordable prices.
While both Canada and Japan provide for RDP,
the effectiveness and level of protection varies
considerably. The strategic importance of studying
Canada’s RDP regime lay not only in the economic
value of its market as a nation with a strong
tradition of an emphasis on health care, but theprecedent it could set for developing and LDC
countries. Japan served as unique case study of anation where its leaders, including the Prime(*29) Interview with Norio Yamamoto.
(*30) Judgment of the Japanese Supreme Court, Date of Judgment, 1999.4.16, Case No. 1998 (Ju) No. 153. Translation by Sir
Ernest Satow.

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<Cited Materials>
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2000.
Correa, Carlos María, “Protection of data submitted for theregistration of pharmaceuticals: Implementing thestandards of the TRIPS Agreement.” South Centre, 2002.
Availableat
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Drahos, Peter with John Braithwaite, Information
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Patient Outcomes”, Toronto, March 2, 2002.
Gervais, Daniel, The TRIPS Agreement: Drafting History
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● 99 ●IIP Bulletin 2004