Lilly chief threatens Canada after courts toss patents

CEO John Lechleiter

Pharma executives often warn that this price cut or that government move will stymie innovation. They've been known to threaten cutbacks and pull-outs in response to policies they find unfavorable. Consider the industry's response to new German pricing rules or Spanish price cuts or Indian patent-stomping, to name a few.

But Eli Lilly ($LLY) CEO John Lechleiter has taken the lament to a new level. In a meeting with the Canadian newspaper The Globe & Mail, Lechleiter railed against court rulings that struck down three of Lilly's patents.

The loss of exclusivity on those drugs, including the ADHD treatment Strattera, cost Lilly more than $1 billion in Canadian sales and triggered at least 280 job cuts since 2006, Lechleiter told the paper's editorial board. "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 said.

Lilly has, in fact, officially challenged a particular patent interpretation that's come up in Canadian courts. But as the Globe & Mail notes, Canadian patent rulings have fallen more or less in line with those in other countries, taken as a whole. And generic drugmakers in Canada counter Lilly's complaints with their own arguments.

One of the rulings Lilly is challenging is the loss of a patent on Zyprexa. That antipsychotic drug fell off patent in the U.S. in 2011, and it's lost more than $1 billion in sales since then. And it's just one of Lilly's patent-cliff drugs. So, Canadian patent rulings may not be the only reasons why Lilly cut jobs there.

- read the Globe & Mail piece