EU Trade Deal Could Cost Canada $3B For Drugs
4 CommentsBy Ed Silverman // February 7th, 2011 // 11:24 am
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.”
Basel lair
Jim Keon is absolutelly right. In Canada there is every Euro pharma co doing biz.and do well thank you very much.If this deal is given to them they will do much better on the backs of Canada’s public health care system. As for Russel Williams he is a dedicated protector and apologist for the Canada’s bigpharma. For those who don’t know Rx&D is just like private club for Canada’s big pharma cos. It is supposed to be the industry’s self regulating body and it does some “selfregulatons” but only in favor of the industry thus 4 its club members. Russel jumps at any opportunity to blow the horn for the industry or to protect it. If there is any “negative” piece in any paper you can bet your life that next day there will be a letter to the editor by Russel explaining Bigpharma’s position and countering what ever was said against the the Rx&D club members.Here he is saying there would be no new cos coming to Canada at all as if the borders were completely closed to them and this deal would resolve that. In fact it would not increase the new biz but only imrove the current one as Jim says.Most who visit here know what the False Claim Act has done in US to catch and punish the offenders to the tune of billions of dolars in fines, recovered for the gov’t that US based pharma cos defrauded and continue to do so. This is not possible in Canada. Rx&D is doing the job of watching the biz. If you get caught doing say offlabel promo and you stole 100M canadian $$, the only one that would fine you is Rx&D with $10.000. Yes 10K not 10M or 80M as you would get in USA. The gov’t is not watching them and there is no FCA either so no whistleblowers who would sue the crooks. So the Canadian bigpharma gets away with peoverbial murder.Novartis was fined recently $422M in USA while they got “caught” for infraction of RX&D rules while defrauding helth care for possibly 200M and was fined $10.000 by Rx&D (look it up on web). Although this was a serious fraud Rx&D did not “rat” on this co to the authorities for further investigation and punishment under the laws they have on the books. Crime is still punishable in Canada but Rx&D covers things up and Russel would have a perfectly reasonable explanation for it.
Considering such a favorable environment for bigpahram in Canada do they need it improved? Bigpharma and Rx&D think so.
Industry Guy
As far as I know….there isnt any significant big pharma in Canada (unless you’re francophone, thats why me and my friends came to US to work…..
industry insider
Industry Guy, getting new drugs approved in Canada is harder than in the US. Given that the Canadian population is 10% of that of the US, and in my personal experience is that every provincial formulary nickels and dimes you to death over pricing. So why should Big Pharma have a presence in Canada just for our senior citzens to cross the border on their bus rides and buy cheap Canadian Rx drugs. Where’s the ROI in that?
Basel lair
Both industry guys seem to have never left their local village since birth. Canada is ALWAYS 10% of whatever you have and do in US, even though we have smaller population but far bigger territory. It is the second biggest country in the world and we have ALL major bigpharma cos be they yours or be their Euro, the ones that count.These cos are as “good” as yours except their crime is far “better” for they do it without any fear of concequenses as your “poor” cos are. US cos paid well over 25 Billion in fines so far, that would be 2.5B in Canada % if everything were 10%. But if they had the same good FCA as you do, based on the crime they did for the same period, Canada’s cos would have paid at least 10 Billion which compares to 100 Billion in USA. So why would not any half decent pharma co lend in Canada? It is open for business both legit and other type. I know for sure for I too was a part of the orgy of crime Canadian cos are doing routinely.
So industry guys join those seniors on their bus trips and see the more advanced place than what you are used to. ps: do not take a fur coat on your back in July, that is just an urban legend still around in your parts.