The treatment offers hope to patients facing a devastating disease. But its price also raises a difficult question: how can Canadians afford the next generation of medical breakthroughs?

There is no single answer. One essential part, however, is ensuring that lower-cost generic and biosimilar medicines can enter the market as soon as legitimate patent protection permits.

Unfortunately, a little-known problem in Canada's patent system is unnecessarily delaying that competition, potentially costing Canadians billions of dollars.

The issue involves a longstanding practice known as “skinny labelling.” For decades, it has helped balance the need to reward pharmaceutical innovation with the need for affordable medicines.

When a company develops a medicine, patents protect its inventions. Additional patents may later be granted for new uses, such as treating another disease.

But a patent protecting one new use should not automatically prevent competition for older uses that are no longer patent-protected.

Skinny labelling allows a generic or biosimilar manufacturer to seek approval for those unpatented uses while excluding, or “carving out,” uses still protected by patents.

Innovative companies retain protection for their patented discoveries. Patients and drug plans benefit from competition where patent protection no longer applies.

Recent Canadian court decisions, however, have undermined this balance.

Under evolving interpretations of patent infringement law, generic and biosimilar manufacturers can face legal barriers even when seeking approval only for uses that are not patented.

In effect, a patent covering one use of a medicine can delay lower-cost competition for other uses, potentially extending market exclusivity by years.

The financial implications are substantial.

The Canadian Generic Pharmaceutical Association has analyzed several medicines affected by this problem. Our modelling estimates that lower-cost competition for Keytruda, a widely used cancer medicine, could be delayed by more than 11 years, at a potential cost of approximately $12.4-billion.

These are projections, not realized losses. Nevertheless, they illustrate what is at stake when competition is delayed.

Every dollar unnecessarily spent on a higher-priced medicine is a dollar unavailable for other health-care priorities, including access to innovative treatments.

This is why the affordability of new medicines and timely access to generics and biosimilars are connected. Competition for established medicines helps governments and private drug plans make room for new therapies, including costly cancer treatments.

There is also an important international comparison.

In June 2026, the United States Supreme Court issued a unanimous decision in Hikma v. Amarin addressing the legal framework for skinny labelling.

The Court made clear that regulatory labelling requirements or accurate statements identifying a product as a generic equivalent do not, by themselves, establish unlawful encouragement of a patented use. Claims of induced infringement require conduct that actively encourages infringement.

Canada has not made a comparable correction.

Without action, Canadians could wait years longer than Americans for lower-cost versions of some medicines, even when the uses for which those products seek approval are no longer protected by patents.

The federal government can address this problem.

Parliament should amend the Patent Act to provide clear protection for generic and biosimilar manufacturers seeking approval for non-patented uses, provided they do not promote their medicines for patented uses.

Health Canada should also update its policies so manufacturers can appropriately exclude patented uses from product documentation without compromising safety or efficacy standards.

These changes would protect legitimate patent rights while allowing timely competition.

Canada rightly values pharmaceutical innovation. New medicines can transform lives, and companies developing them deserve appropriate protection for their discoveries.

But innovation and affordability are not competing objectives. A sustainable system requires both.

The recent reporting on cancer drug costs reminds us how much is at stake. While skinny label reform would not reduce the price of a newly developed cancer medicine, it would help ensure Canadians are not paying unnecessarily high prices for established treatments when competition should be possible.

At a time of mounting pressure on health-care budgets, Ottawa should remove this avoidable barrier to affordable medicines.

Canadians should not have to pay monopoly prices for uses of medicines that are no longer patent-protected.

 

Jim Keon, President, Canadian Generic Pharmaceutical Association