TPP and CETA will likely raise pharmaceutical costs in Canada, government admits

by: Obert Madondo | Published Tuesday, May 24, 2016, by The Canadian Progressive

A Trudeau government official recently admitted that TPP and CETA trade deals will likely raise pharmaceutical costs in Canada. Photo: SumOfUs / Flickr (CC BY 2.0)

A Trudeau government official recently admitted that TPP and CETA trade deals will likely raise pharmaceutical costs in Canada. Photo: SumOfUs / Flickr (CC BY 2.0)

Two reports released by the Canadian Centre for Policy Alternatives (CCPA) back in February warned about the cost of the Trans-Pacific Partnership (TPP) and other mega trade agreements to Canada’s health care system. The first report, entitled, Involuntary Medication: The Possible Effects of the Trans-Pacific Partnership on the Cost and Regulation of Medicine in Canada, found “significant risks and high public costs to the Canadian health care system within the text of the agreement.”

A Trudeau government official recently admitted that the TPP and Canada-Europe Comprehensive Economic and Trade Agreement (CETA) will likely raise pharmaceutical costs in Canada. According to the official, it’s “correct” to suggest that the two trade deals “will likely increase the costs of drugs in Canada and we just don’t know how much”.

The admission emerged through an exchange between NDP MP Don Davies and Abby Hoffman, (Assistant Deputy Minister, Strategic Policy Branch, Department of Health) during an April 13, 2016, meeting of the House of Commons’ Standing Committee on Health.

Here’re the revealing exchange:

Davies:

I’ve seen various statements in this regard, but most of the time I see a statement that says that Canadians pay the second-highest prescription costs in the world. At best, it’s third or fourth. Is that correct? Yes.

I guess we don’t have a very pretty picture in front of us. We pay close to the highest prices for prescriptions in the world. You’ve testified that we have very low spending on R and D in this country. If 10% to 20% of Canadians have either no coverage or not enough coverage, that’s 7 million Canadians. That’s the picture that I see painted in front of us.

Canada has just signed two trade deals, CETA and the TPP, which have new intellectual property provisions. All the literature and opinions I’ve read indicate that this will delay the introduction of generics to market for some time. I’m seeing estimates of two years as about what it’s going to take.

Ms. Hoffman, has the department done some analysis on the likely impact of TPP and CETA, and is it true that those trade deals will likely increase the prices that Canadians pay for pharmaceuticals and add a little bit of mud to that already dirty picture?

Hoffman:

Yes, some analysis has been done. There’s a large number of people, not the least of whom are in the generics industry, who are attempting to estimate what incremental costs will be. The maximum amount of extended protection that brand drugs could get in the Canadian marketplace would be two years. In reality, given the intersection of data protection, patent remaining, patent life, and so on, it’s likely to be considerably less, on average, for most products. But every day that a patent product remains in the marketplace beyond what is currently the case is a day when the generic equivalent is not in the marketplace. One can calculate the incremental cost.

This is why measures such as the work being done through the pCPA , and some changes that may be in the offing for PMPRB, are so important.

It is difficult to estimate the global cost. We can do modelling based on drugs that are in the marketplace today and try to imagine what would happen with the same mix of data protection and patent life remaining, but we’re actually talking about drugs that will be in the marketplace five, six, seven, eight, ten years and beyond. The profiled drugs and their costs and whether or not there even are generics that could replace them will depend on what’s going on in that drug marketplace.

Davies:

Is it fair to say, Ms. Hoffman, that it’s the department’s position that those two trade deals will likely increase the costs of drugs in Canada and we just don’t know how much?

Hoffman:

That’s correct.

According to the CCPA, “The TPP would require Canada to extend patent terms to compensate brand-name pharmaceutical firms for regulatory delays in approving drugs. This policy change could add $636 million annually to the price of drugs in Canada.”

The think-tank’s second study, entitled, Major Complications: The TPP and Canadian Health Care, found that the investor provisions of the TTP would “make it more difficult and costly for Canadian governments to establish new public health programs, including pharmacare”.

RELATED: TPP Trade Deal Would Undermine Public Health Systems Around The World, Groups Tell US Congress

In April, Doctors Without Borders and more than fifty groups dispatched a letter to the US Congress urging the legislature to reject the TPP. The organizations argued that the deal would devastate public health systems around the world while extending pharmaceutical companies monopolies and profits.

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Obert Madondo is an Ottawa-based progressive blogger, and the founder and editor of The Canadian Progressive. Follow him on Twitter: @Obiemad

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Obert Madondo

Publisher and editor
Obert Madondo is an Ottawa-based independent journalist and progressive political blogger. He's the publisher and editor of The Canadian Progressive.