Eli Lilly Raises Stakes: Says Canada Now Owes It $500 Million For Not Granting A Patent It Wanted

from the too-much-is-never-enough dept

A few months ago we wrote about the extraordinary — and worrying — case of Eli Lilly suing Canada after the latter had refused to grant a pharma patent. Eli Lilly’s contention was that by failing to grant its patent (even if it didn’t meet the criteria for a patent in Canada), Canada had “expropriated” Eli Lilly’s property — and that it should be paid $100 million as “compensation”.

But it seems that the company has had second thoughts. Not that its action was outrageous, and that it ought quietly to retract its suit in the hope that people might just forget about this display of presumption; instead, it has decided it was far too generous in asking for only $100 million, as this Globe and Mail story explains:

U.S. pharmaceutical giant Eli Lilly and Co. has escalated a challenge it launched last year against Canada’s patent rules under the North American free-trade agreement, and is now demanding $500-million in compensation after the company lost its Canadian patents on two drugs.

Indianapolis-based Lilly has expanded the NAFTA case over the loss of its patent for Strattera, a drug used to treat attention deficit hyperactivity disorder, to also include Canada’s invalidation of the company’s patent for Zyprexa, which is used to treat schizophrenia.

This shows that the initial action was no one-off, and that if Eli Lilly’s action succeeds, we can expect it and many other companies to avail themselves of this method of extracting money from the public purse, as provided for under NAFTA’s investor-state dispute settlement (ISDS) clauses.

What’s troubling is that similar ISDS schemes are being negotiated for both TPP and TAFTA/TTIP. That will give corporations even more opportunities to sue nations for supposed “expropriation”, and to challenge perfectly legitimate local laws that dare to stand in the way of bigger profits.

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Companies: eli lilly

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Comments on “Eli Lilly Raises Stakes: Says Canada Now Owes It $500 Million For Not Granting A Patent It Wanted”

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36 Comments
crade (profile) says:

Re: Re: Tough call

If they win in any form it would mean the collapse of any form of actual agreement. They are trying to claim that because they like to call patents property now that previous trade agreements with the term “property” in them should apply to it patents now.. You could change any agreement to mean anything you want with that sort of reasoning.

Whatever the result, it’s not possible for them to get screwed over. They either get a whole bunch of money for nothing, or they don’t.. They can only get screwed over in their heads where Canada owes them something.

DannyB (profile) says:

Eli Lilly is pissed because it doesn't own Canadian govermnent

As a matter of moral principle, Eli Lilly should be able to own the Canadian government and other governments.

If that right of ownership is not granted, then at least the Canadian government should do whatever a foreign corporation wants.

If a government, including Canada, does not bow to every wish of a foreign corporation, then shouldn’t it be able to be sued according to somebody’s (whos?) laws for big bucks?

Considering the general state of (lack of) understanding American’s have of world geography, world politics, etc, wouldn’t the executives at Ely Lilly consider Canada to be just another US possession, territory or state like Mexico and therefore subject to American Corporate laws?

Anonymous Coward says:

From the Globe and Mail article Linked above:
“Lilly claims that Canadian Federal Court judges, using what the drug company calls a ?promise doctrine,? are demanding that patents include too much scientific proof of the efficacy of a drug at early stages.”

Seriously they’re complaining that they actually have to prove the drug works.

artp (profile) says:

Eli Lilly and ethics

Eli Lilly, of course, is one of many pharmaceutical corporations whose quality assurance programs, dictated by law under the Food & Drug Act, was so abominably bad that the FDA stepped in and took control of their QA department themselves. I would be ashamed to show my face in public after that, but Lilly has apparently gotten over the shock, and determined that their honor was only “mostly dead”.

I also note that the “free trade treaty” adherents want anything in the world OTHER than free trade. If they really did, then anybody could make those life-saving and life-changing drugs. Thank God we finally have THAT issue settled.

Paul Clark (profile) says:

RE: This May Be Very Bad for ELI Lilly in the End

If I recall correctly, Canada will not patent drugs that are not an improvement on existing medications. This is what ELI Lilly is complaining about. We would not let them patent a drug that is not an improvement over existing medication.

Canada used the same law to prevent the licensing of THC in a inhaler. It was designed as an anti-nausea and for pain relief. If ELI Lilly winds this case, we will license the this drug and demand that it be licensed in the US. We can sell it for a lot less that existing medications. If the US fails to license it, we will demand billions in lost profits.

Or we could consider the attempt the selling of an inferior drug a terrorist act. The US has set the standard of behaviour for that.

Anonymous Coward says:

so, why does Canada tell the company to go fuck itself?

why does everywhere not get off this meal ticket that was introduced by the USA, as is the usual case when there is something introduced that can screw everyone else but make an American industry/company/person a fortune for doing nothing, just like the way all countries are threatened by the US over copyright etc not being strict enough. we all know that this aids no one except the US but everywhere is expected to lose out in order to make things better for Hollywood!

Anonymous Coward says:

so all countries are expected to comply with what US companies say, ie, give patents when they are not valid or even possibly going to be life threatening or face possible bankruptcy if trying to save lives by defending their actions and not grant patents? has the whole world gone absolutely fucking mad?

Anonymous Coward says:

ISDS are anti-democratic

The great thing about Investor-State dispute settlements is that since the State in question has voluntarily given up a chunk of their sovereignty, it doesn’t matter at all what the Canadian voters want — effectively, Eli Lilly isn’t a corporate legal-person, it’s a corporate quasi-State! And the voter’s job is to pay their taxes and to shut up.

Anon says:

Still,...

The nice thing about a dictatorship disguised as a democratic majority parliamentary government is…

You know how some countries can pass laws making it illegal to sue a Telco over their cooperation with spy agencies? Well, Canada can pass a law nullifying the big pharma’s lawsuit; or they could cave, hand out the money, effectively ringing a giant dinner bell and yelling “come and git it!”

If Eli claims that’s not constitutional – well Canada has a loophole you can drive a truck through, that a law can be passed “notwithstanding” that it would be otherwise unconstitutional, if there’s a big enough majority (66% IIRC). If the Conservatives don’t want to pay, and the main opposition NDP don’t believe in handing money to big business – sorry, no money.

I’m guessing if push comes to shove they will simply pass a law saying that EL is SOL.

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