Annual Report Glossary of Terms
These definitions are provided for general assistance only; they have no legal force and should be read in conjunction with the applicable legislation.
Active ingredient or medicinal ingredient: Chemical or biological substance responsible for the claimed pharmacologic effect of a medicine.
Applied research: R&D directed toward a specific practical application, comprising research intended to improve manufacturing processes, pre-clinical trials, and clinical trials.
Average transaction price (ATP): The Canadian “average price per package” or “net revenue from sales of each dosage form” referred to in s. 4(1)(f)(i) and 4(4) of the Patented Medicines Regulations. The ATP is calculated by dividing sales for a medicine by the number of units sold. This price is an average and does not include indirect rebates and discounts negotiated between Rights Holders and insurers, but does include reduction given at the factory-gate (ex-factory) level as a promotion or in the form of rebates, discounts, refunds, free goods, free services, gifts, or any other benefit of a like nature and after the deduction of the federal sales tax.
Basic research: R&D defined as work that advances scientific knowledge without a specific application in mind.
Current research and development expenditures: Consist of the following non-capital expenses directly related to research work: (a) wages and salaries, (b) direct material, (c) contractors and subcontractors, (d) other direct costs such as factory overhead, (e) payments to designated institutions, (f) payments to granting councils, and (g) payments to other organizations.
Drug Identification Number (DIN): A registration number (drug identification number) that the Health Products and Food Branch of Health Canada assigns to each prescription and non-prescription drug product marketed under the Food and Drug Regulations. A DIN uniquely identifies the following product characteristics: manufacturer; product name; active ingredient(s); strength of active ingredient(s); pharmaceutical dosage form; route of administration. Different strengths and dosage forms of a medicine may be assigned different DINs.
Failure to file: The complete or partial failure of a Rights Holder to comply with regulatory filing requirements pursuant to the Patent Act and the Patented Medicines Regulations.
License, voluntary: A contractual agreement between a patent holder and a licensee under which the licensee is entitled to enjoy the benefit of the patent or to exercise rights in relation to the patent for some consideration (e.g., royalties in the form of a share of the licensee's sales).
List price: The gross Canadian “publicly available ex-factory price” referred to in s. 4(1)(f)(ii) of the Patented Medicines Regulations. The list price is the gross price at which Rights Holders sell their products to wholesalers, hospitals, pharmacies, and other large distributors, and does not include any rebates or discounts.
Medicine: A medicinal ingredient and/or a substance or a mixture of substances manufactured, sold, or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, in human beings or animals; or restoring, correcting, or modifying organic functions in human beings or animals.
Notice of Compliance (NOC): A notice issued under section C.08.004 or C.08.004.01 of the Food and Drug Regulations. The issuance of an NOC indicates that a drug product meets the required Health Canada standards for use in humans or animals and that the manufacturer of the product is authorized to market the product in Canada.
Other qualifying research: Eligible research and development expenditures that cannot be classified into any of the preceding categories of “type of research and development”. It includes regulatory submissions, bioavailability studies, and Phase IV clinical trials.
Patent: An instrument issued by the Commissioner of Patents in the form of letters patent for an invention.
Patented Medicine Price Index (PMPI): The PMPI was developed by the PMPRB as a measure of average year-over-year change in the prices of patented medicines sold in Canada, based on the price and sales information reported by Rights Holders.
Patentee: The person for the time being entitled to the benefit of the patent for that invention. This includes, where any other person is entitled to exercise any rights in relation to that patent other than under a licence continued by subsection 11(1) of the Patent Act Amendment Act, 1992, that other person in respect of those rights.
PMPRB11: Australia, Belgium, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden, and the United Kingdom.
Research and development (R&D): Basic or applied research for the purpose of creating new, or improving existing, materials, devices, products, or processes (e.g., manufacturing processes).
Research and development (R&D) expenditures: For the purposes of the Patented Medicines Regulations, in particular Sections 5 and 6, R&D means those activities for which expenditures would have qualified for the investment tax credit for scientific research and experimental development under the Income Tax Act as it read on December 1, 1987. This specialized definition is further explained in the Research and Development Expenditures section.
Rights Holder: As defined by subsection 79(1) of the Patent Act, “a patentee and the person for the time being entitled to the benefit of a certificate of supplementary protection for that invention, and includes, if any other person is entitled to exercise rights in relation to the certificate, that other person in respect of those rights.”
Undertaking: A written promise by a Rights Holder to adjust its price and/or pay potential excess revenues to the Government of Canada.