Study highlights concerns raised by NUPGE that big pharmaceutical companies were lobbying governments for proposals that would drive up profits and health care costs.
Toronto (8 Feb. 2011) - According to a study from the Canadian Generic Pharmaceutical Association (CGPA) changes to Canada’s drug patent system proposed by the European Union (EU) would add nearly $3-billion annually to Canada’s prescription drug bill.
The study, The Canada-European Union Comprehensive Economic & Trade Agreement: An Economic Impact Assessment of Proposed Pharmaceutical Intellectual Property Provisions, was authored by Professor Aidan Hollis of the Department of Economics at the University of Calgary and Paul Grootendorst from the University of Toronto’s Faculty of Pharmacy.
Canada and the EU are currently in negotiations for a Comprehensive Economic andTrade Agreement (CETA), which International Trade Minister Peter Van Loan hopes to conclude before the end of 2011.
As part of these negotiations, the EU has tabled proposals that would considerably lengthen the period of market exclusivity for brand-name drugs in Canada and, according to the authors of the study released today, would provide “the most extensive structural protection for innovative drugs of any country in the world.”
The study serves to highlight concerns previously raised by the National Union of Public and General Employees (NUPGE) that big pharmaceutical companies were lobbying Canadian and European governments for proposals that would drive up profits and health care costs.
"It’s no surprise that all big corporations want the negotiations for CETA to succeed because it will limit the right of governments to control corporate actions," says Larry Brown, NUPGE Secretary-Treasurer. "But there is self-interest and then there is excessive and crass self-interest."
"Canada's patent laws already give Big Pharma some pretty amazing protection," says Brown. "But this doesn’t seem to be enough for them and they’re now trying to expand their patent rights under this international trade deal. If they succeed, brand name drug prices will skyrocket even higher and that will cost our public health care system and Canadians billions of dollars more."
The study’s key finding is that Canadian payers, such as the federal government, provincial governments, businesses and patients “would face substantially higher drug costs as exclusivity is extended on top-selling prescription drugs, with the annual increase in costs likely to be approximately $2.8-billion per year.”
The authors also found that, if implemented, the proposals would delay the availability of lower-cost generics in Canada by approximately 3.5 years.
Importantly, the study reveals that the EU’s proposed changes would not lead to a substantial increase in investment by brand-name drug companies in Canada.
“The purpose of exclusivity rights granted to innovators is to create an incentive for research and development investments into new drugs. However, the amount of additional investment in pharmaceutical innovation that would result from the EU’s proposed pharmaceutical IP provisions would be a small fraction of the additional costs to Canadians.”
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE