Eli Lilly and Company Threatens to Leave Canada Over Patent Rulings

After a series of losses in Canadian courts over patents for several key drugs, Eli Lilly ceo John Lechleiter is now threatening to move operations out of the country. Why? The defeats over the patents for the Strattera ADHD drug, the Zyprexa antipsychotic and the Evista osteoporosis treatment have cost Lilly more than $1 billion in revenue and prompted some 280 jobs cuts since 2006, leaving the drugmaker with about 500 employees in Canada. “If that sort of pattern persists, it’s not a question of would we stay in Canada, it’s a question of would we have any business in Canada,” Lechleiter told a meeting of the editorial board at The Globe and Mail, which is based in Toronto. He added that other drugmakers are in a similar situation and warned of “very real economic consequences for Canada.” His remarks come two months after Lilly (LLY) filed a challenge under the North American Free Trade Agreement and demanded $100 million in compensation because Canadian courts invalidated its Strattera patent. Lilly maintains the court decisions violated Canadian obligations under NAFTA and other trade agreements, which allowed generic rivals to challenge its patents. The move alarmed consumer advocates. Lechleiter charged that it is unfair for Canadian judges to strike down patents for failing to include sufficient testing results in the original applications that were filed years ago, the Globe and Mail reported. The Lilly ceo also maintained that judges are demanding much more proof that the proposed drugs will work than is required in most other developed countries, which violates various treaties, including NAFTA, according to the paper.