Canada's pharmaceutical intellectual property laws need "major reform to encourage and protect innovation in developing new drugs".

That is the conclusion of an analysis published in the Canadian Medical Association Journal. Researchers noted that the federal government "supports drug innovation in several ways, including funding of basic research and tax breaks", but patents "are the most significant and valuable form of support".

They criticise "complex rules and regulations that lead to legal ambiguity", adding that brand firms use the rules to delay entry of copycat versions of their drugs, "while generic firms attempt to do the opposite". Therefore, "the outcome of this contest is an extraordinary amount of litigation…that has strained the federal courts and resulted in hundreds of millions of dollars in legal fees, costs that are passed on to drug plans and consumers".

The authors suggest that "reform of the legal and regulatory framework for market exclusivity is needed". This could include replacing current regulations with a standard guaranteed fixed period for market exclusivity (they suggest 10 years), while a second option would be to abolish the Patented Medicines (Notice of Compliance) regulations, "which govern the introduction of generic versions of brand drugs still under patent, and to rely instead on the Patent Act".

They conclude that "other countries are facing the same challenges as Canada; none, however, have attempted fundamental reform of its laws on pharmaceutical IP" and "it is time for Canada to show leadership". Co-author Paul Grootendorst of the University of Toronto said "we argue that the system is broken. The adjudication of patent validity (and hence the period of market exclusivity) is determined by extraordinarily costly and time-consuming litigation".