Healthy Skepticism Library item: 19085

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Publication type: news

Silverman E
EU Trade Deal Could Cost Canada $3B For Drugs
Pharmalot 2011 Feb 7
http://www.pharmalot.com/2011/02/eu-trade-deal-could-cost-canada-3b-for-drugs/

Full text:

A trade deal being negotiated between Canada and the European Union could cost Canadians another $2.8 billion annually in drug costs – notably, by delaying the availability of lower-cost generics in Canada by about 3.5 years – if certain proposals are cemented, according to a new report commissioned by generic drugmakers.
During the talks, the EU has sought various changes in Canadian laws and regulations governing intellectual property concerning brand-name meds. These include extending the term of patent protection by up to five years if drugs are bogged down in the regulatory approval process; lengthening the period of data exclusivity from eight years to 10 years or more; and strengthening notice of compliance regulations by adding an appeals process.
The upshot is that Canadian payers would face “substantially higher drug costs as exclusivity is extended on top-selling prescription drugs,” according to the report, which was paid for by the Canadian Generic Pharmaceutical Association (you can read it here).
“The reasonable inference is that these changes are designed to allow innovating pharmaceutical firms to charge monopoly prices for a longer period,” Aidan Hollis of the Department of Economics at the University of Calgary, and a co-author of the report with Paul Grootendorst of the University of Toronto, tells The Toronto Globe & Mail.
A few nuggets: Of spending by Canadians on meds, generics account for 54 per cent and brand-name drugs are 46 per cent. Both prescription and over-the-counter meds accounted for $31 billion of the $192 billion in health spending last year. And brand-name drugs are a leading export from the EU to Canada. In 2009, Canada imported $5.3 billion from the EU and exported $1.3 billion to the EU.
In touting the report, the CGPA’s Jim Keon says “the pharmaceutical intellectual property proposals tabled by the EU, however, will not eliminate trade barriers, as pharmaceutical products from the EU already have unfettered access to the Canadian market. These proposals will simply increase profits for brand-name drug companies at the expense of Canada’s health-care system.”
However, Russell Williams, who heads Rx & D trade group in Canada for brand-name drugmakers, counters that, “if we want to attract innovation dollars and the good jobs that come along with them, we need a globally competitive regime and we don’t have one now. Without R&D, without innovative drugs, there will be nothing for generics to copy.”