Canada's Dormant DIN Problem: How Marketing Status Is Undermining Pharmaceutical IP Protections Under CUSMA

When Canada ratified the Canada–United States–Mexico Agreement (CUSMA), it signalled a policy commitment to a stable and predictable intellectual property (IP) framework that supports pharmaceutical innovation and rewards regulatory compliance. Yet Canada's treatment of "dormant" Drug Identification Numbers (DINs) has, in practice, introduced uncertainty into how those commitments are implemented domestically.

The problem stems from the way Canada's pharmaceutical regulatory framework links IP protections to marketing decisions made after a product has already been approved. It is not the existence of a regime that links patent protections to regulatory approval that poses an issue, but rather Canada's decision to make those protections contingent on whether a specific version of an already-approved medicine happens to be "marketed" at a given moment in time.¹ This approach fails to reflect how medicines are developed, approved, and updated over time to meet patient and health system needs.

The result is a regulatory "trap" that unsettles market expectations and raises broader questions about predictability and coherence in Canada's pharmaceutical policy framework, ultimately calling into question whether Canada is delivering on the commitments it made under CUSMA.

Dormant DINs and Why They Matter

A DIN is more than a simple administrative drug identifier: it functions as the formal confirmation that Health Canada has authorized a medicine for sale. It is not only the regulatory gateway to marketing authorization, but also to reimbursement, product listing, and the operation of IP protections tied to drug approval. In Canada, a DIN is now issued for every approved drug presentation. Drug presentations are defined by dosage form, strength, and route of administration, which means that a vial, pre-filled syringe, and autoinjector for the exact same medicine will each receive separate and distinct DINs.

DINs can become "dormant" when a particular drug presentation is not actively marketed. Periods of non-marketing are common and can occur when innovator pharmaceutical companies introduce newer presentations that are safer, more economical, or easier for patients to use, leaving old presentations behind. For example, an innovator pharmaceutical company may decide to discontinue marketing a vial in Canada where it subsequently develops a more convenient auto-injector. Importantly, nothing in this process necessarily reflects a withdrawal of regulatory approval or a failure to comply with Health Canada requirements.

Under current Canadian practice, patent protection is affected by a particular DIN's marketing status, as the patent linkage system effectively operates on a DIN-by-DIN basis. As a result, when a generic or biosimilar manufacturer files a drug submission referencing an innovator product, patent protection is only available if the specific DIN being targeted is actively marketed in Canada.² Health Canada assesses whether a product is "marketed" at the level of individual DINs, rather than across the medicine as a whole. Where a DIN is approved but never sold, or was once sold but is no longer marketed in Canada at the relevant time, patent linkage may fall away entirely for the product associated with that particular DIN. Thus, if for example a generic or biosimilar manufacturer uses a vial of the relevant medicine as the reference product and the vial is no longer "marketed" in Canada, Health Canada has indicated that IP protection under the patent linkage system will not be available.

With this approach, Health Canada has effectively tied IP protections to the commercial status of an individual DIN in Canada, rather than to the availability of the innovator's medicine in Canada or to the fact that the medicine has already met Canada's regulatory approval standards.

The CUSMA Context

Canada's pharmaceutical regulatory framework does not exist in isolation; it operates within a broader international trade architecture. CUSMA preserves regulatory autonomy and Canada's existing pharmaceutical IP protection regime, while also embedding expectations of transparency, predictability, and proportionality in regulatory design and administration.³

Canada's dormant DIN policy transforms marketing status into a gatekeeper for IP protections. However, nothing in CUSMA contemplates a system in which the availability of IP protections is contingent upon the current marketing status of an approved drug presentation. In particular, CUSMA:

• Mandates a system that provides patent holders with a reliable opportunity to assert IP rights to "previously approved" products;⁴
• Assumes that regulatory approvals, not ongoing sales, provide a stable reference point for preserving patent-related rights over time; and,
• Contains no indication that IP protections may be withdrawn simply because an innovator modernizes its product line by replacing older presentations with safer, more cost-effective, or more patient-friendly alternatives.

Yet this withdrawal of IP protections is precisely what Canada's DIN-specific approach allows. By collapsing the distinction between regulatory authorization and commercial exploitation, Canada injects commercial volatility into protections that CUSMA assumes will operate independently of short‑term marketing decisions. This misalignment sits at the core of the tension between CUSMA's IP requirements and Canada's current regulatory practice.

The Effects of a Misaligned Policy

Canada's current approach has concrete and foreseeable consequences. It disincentivizes the introduction of next‑generation drug product innovations by penalizing innovators for improving formulations or delivery mechanisms. In practice, it may encourage innovator companies to delay introducing improved drug presentations in Canada for fear of weakening IP protections, even where improvements align with patient safety or system efficiency. At the same time, it rewards generic or biosimilar applicants for targeting withdrawn or legacy drug presentations rather than competing against clinically relevant, actively marketed products. Taken together, these outcomes introduce instability and unpredictability into Canada's pharmaceutical IP framework in ways that CUSMA was expressly intended to avoid.

Innovators have already tested these issues through judicial review, arguing that Health Canada's DIN‑specific interpretation of "marketed" is inconsistent with Canada's international obligations, including under CUSMA. The court declined to intervene, not because the treaty arguments lacked force, but because Health Canada's interpretation was treated as an administratively acceptable policy choice.⁵

That outcome matters for two reasons. First, it confirms that the current regime is not compelled by CUSMA. Second, it signals that judicial review is unlikely to provide a remedy, even where policy outcomes are misaligned with innovation incentives and trade commitments. As a result, this issue sits squarely within the realm of legislative and trade policy, not litigation.

A Straightforward Fix

Canada does not need to renegotiate CUSMA to tackle this problem. It needs to address how its international commitments are implemented domestically.

One option would be a direct legislative amendment, such as replacing the requirement in section 5 of the PM(NOC) Regulations that an innovator product be "marketed" with a requirement that it has been "previously approved" in Canada. That change would directly align Canada's domestic legislation with the language of CUSMA itself and eliminate the dormant DIN problem entirely, though it may face resistance given Canada's historic emphasis on product availability.

A more balanced and pragmatic alternative is readily available. Canada could legislatively define patent linkage to turn on a single, clinically meaningful question: whether the innovator markets at least one approved drug presentation of a medicine that reasonably meets the same patient and clinical needs as the presentation targeted by the generic or biosimilar. If the answer is yes, time‑limited IP protections should apply. This assessment would provide a mechanism to preserve the structure of Canada's pharmaceutical regulatory framework, while complying with its CUSMA obligations in practice.

This alternative approach would prevent the exploitation of dormant DINs where innovators remain active in the Canadian market, preserve flexibility where a product has truly been abandoned, better align patent linkage with its underlying purpose, and reflect the realities of modern drug product iteration. Importantly, this type of contextual assessment falls squarely within Health Canada's regulatory competence and would restore predictability, proportionality, and coherence to a system that CUSMA was designed to stabilize.

Footnotes

1 While this article focuses on pharmaceutical patent protections, aspects of Canada's regulatory data protection framework raise similar considerations.

2 Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, s. 5(1).

3 See e.g. Agreement between Canada, the United States of America, and the United Mexican States (CUSMA), Preamble.

4 CUSMA, Art. 20.50.

5 AbbVie Corporation v. Canada (Health), 2022 FC 1209.

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