Social Policy in Ontario

Studies warn drug prices will rise under trade deal

Posted on June 24, 2011 in Health Delivery System

Source: Toronto Star — Authors: Linda Diebel

TheStar.com – news/Canada/politics
Published Friday, June 24, 2011.   By Linda Diebel, National Affairs Writer

The head of an agency tasked with safeguarding health care has been left in the dark by Ottawa on a multi-billion dollar trade deal that could result in soaring drug prices for consumers.

John Abbott, CEO of the Health Council of Canada, has to rely on a leaked draft for information on a pending federal deal with the European Union that researchers estimate could cost Canadians $2.8 billion more annually on prescriptions.

In an interview with the Toronto Star, Abbott appealed to Ottawa for transparency in the secret talks because “we haven’t been given the full impact of these negotiations.”

He said it would be a shame for governments to have worked so hard in Canada to try to keep drug prices down, only to see them increase because of a trade deal.

Abbott said the cost of drugs in Canada is already “much higher than other countries, including the U.S.

“There’s no obvious reason for this, but we’re paying a high price for drugs.”

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) includes the demand by European pharmaceutical manufacturers that Canada extend patent protection for up to five years. As a result, cheaper generic drug production would be delayed.

The EU also wants procurement at the municipal and provincial levels opened up to European firms, removing favouritism shown to Canadian companies.

Ontario potentially would be the hardest-hit province, paying $1.2 billion more annually, according to a study by U of T pharmacy professor Paul Grootendorst and Aiden Hollis, an economist at the University of Calgary.

“Payers — consumers, businesses, unions and government insurers — would face substantially higher drug costs as exclusivity is extended on top-selling prescription drugs,” says their report, commissioned by the Canadian Generic Pharmaceutical Association.

The proposed changes are included in a section on intellectual property protection.

“The intellectual property language proposed by the EU . . . would substantially increase the average time of exclusivity for patented drugs in Canada, and would give Canada the highest structural protection for patented drugs of any country in the world,” says the Grootendorst/Hollis report.

Before a deal is struck in the talks, which began in 2009 and are to resume in Geneva next month, Abbott urged Ottawa to “put the deal out for consultation and input so that all sectors of the Canadian public can weigh in on the final agreement.”

Ontario Health Minister Deb Matthews said her department is “watching very, very closely (and) working to understand the full impact” of the agreement.

In a telephone interview, she said Ontario is represented in the talks by the ministry of economic development and trade and “they are keeping our ministry up to date.”

She wouldn’t comment on studies that detail rising drug prices.

Scott Sinclair, senior trade policy researcher for the Canadian Centre for Policy Alternatives, called the European demands “aggressive and intrusive.”

“If the Harper government gives in, the increased costs will be shouldered by provinces and consumers,” he said.

Sinclair says he can’t even imagine another government, such as the U.S. Congress, bowing to such demands.

“We inevitably come out on the short end of the stick in (trade) negotiations.”

A report by the Canadian Intellectual Property Council argues Canada lags behind other countries in patent protection and argues that increasing it would lead to greater research and development in Canada.

But a recent study by U of T business law professor Edward Iacobucci says there’s no empirical evidence that giving big drug companies a better deal results in any benefits to Canada. He also contends Canada already offers better protection.

< http://www.thestar.com/news/canada/politics/article/1014637–studies-warn-drug-prices-will-rise-under-trade-deal >

Tags: budget, economy, Health, pharmaceutical, standard of living

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