September 28, 2011 – In June, CARP reported on on-going negotiations between the federal government and the European Union (EU) on extending the intellectual property rights of name brand pharmaceuticals.
The Canada-European Union Comprehensive Economic & Trade Agreement (CETA) is typically a give and take between negotiating nations, and in this case, the EU is arguing for patent protections and extensions for name brand pharmaceutical products. It remains unclear what Canada will gain from the negotiations, but two opposing sides of the pharmaceutical industry in Canada have a lot at stake and the debate has intensified since the summer.
The Generic Industry
On the one hand, the generic drug industry, which depends on off-patent drugs, sponsored a study shows that changes to Canada’s drug patent system proposed by the 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. The study was commissioned and released earlier this year by the Canadian Generic Pharmaceutical Association (CGPA).
The EU’s proposal, the authors claim, would considerably lengthen the period of market exclusivity for brand-name drugs in Canada and would provide “the most extensive structural protection for innovative drugs of any country in the world.”
Name Brand Pharmaceuticals
On the other hand, the pharmaceutical industry in Canada, represented by Rx&D, claims that the CGPA report should be discounted by Canadian governments and stakeholders because it is “based on a flawed underlying assumption – that healthcare costs should be controlled by maintaining weak and ineffective IP protection. Using IP to control healthcare costs is ineffective, inconsistent with the practices of our major trading partners, and, most importantly, counterproductive to Canada’s best interests.”
The recent Rx&D report argues that “while weak and ineffective IP protection is beneficial for generic drug makers seeking earlier market entry, it is inconsistent with a Canadian health policy framework which seeks to promote innovation in order to reduce healthcare costs and yield better patient outcomes.”
Lower Prices or Innovation?
The debate comes down to claims of lower cost generic drugs versus higher priced name brand innovative drugs.
However, at a time when drug prices constitute the fastest growing element of healthcare spending, the government should be looking for ways to reduce costs and increase access for all Canadians to life saving drugs.
To read the original study, the Rx&D report, and the CGPA rebuttal, follow the links below.
To read the original CGPA study, click here
To read the Rx&D report, click here
To read the CGPA rebuttal, click here