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    CETA Reached "In Principle", Part Four: Pharma Gets Patent Extension Despite Declining R&D in Canada

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    Friday October 18, 2013
    As noted in another post on the CETA intellectual property provisions, one of the key elements in the deal from a European perspective was patent term restoration, which effectively allows the large pharmaceutical companies to extend the term of their patents (additional posts on the need to release the draft text and the telecom and e-commerce provisions). The change will delay the entry of generic alternatives and, as acknowledged by Prime Minister Stephen Harper, will raise health care costs across the country (estimates run into the billions). In fact, the Ontario government has already indicated that it may seek compensation (or "mitigate the impact") for the additional costs.

    Ironically, the CETA deal comes just as the government's Patented Medicines Prices Review Board issued its annual report that shows that the major pharmaceutical companies spending to sales ratio continues a decade-long decline, hitting its lowest level since the last time the Canadian government caved to pressure for patent reforms. According to the PMPRB released data (which is gathered from the companies themselves), the  R&D-to-sales ratio for members of Rx&D (the lead pharma lobby) was 6.6% in 2012, down from 6.7% in 2012. The Rx&D ratio has now been less than 10% for the past ten consecutive years and is approaching its lowest level since tracking began in 1988.  From a global perspective, Canada fares very poorly, ranking ahead of only Italy with countries such as France, Germany, Sweden, Switzerland, the U.K., and U.S. all seeing greater expenditures.


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    The CETA Leak: Major Outstanding Issues Remain in an Unbalanced Deal

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    Monday November 26, 2012
    As International Trade Minister Ed Fast returns from negotiations in Europe that failed to secure a deal on the Canada - EU Trade Agreement, newly leaked documents to the CAQ and posted by LaPresse provide a detailed look at the remaining outstanding issues with details on the Canadian and European positions. The documents (1, 2, 3, 4) make it clear that the EU recognizes the deal is unbalanced as there are far more demands for Canadian changes than European ones. The EU retains the hope that Canada will cave on the EU demands since "the EU market to which it gains preferential access is much larger than its own."

    This ranks as perhaps the most important CETA leak to date, since it clearly identifies the key remaining issues, the European demands, and the massive changes that would be required for Canada to comply with the treaty.  Some of the changes demanded by Europe include patent reform that could add billions to Canadian health care costs, the removal of foreign ownership restrictions on telecommunications and book publishing, the opening of public procurement for the energy and public transport sectors, eliminating Investment Canada Act review for European investments, new restrictions on the sale of a myriad of products such as feta and parmesan cheese, changes to agricultural protections (ie. supply management), and the adoption of European standards on passenger cars. This would require dramatic changes across the Canadian economy, all for what even the Europeans acknowledge are limited gains for Canada.

    Given what is at stake, there needs to be an open debate and consultation before an agreement is reached (which is no longer a certainty) and Canada should be considering whether a scaled down version of CETA - one that focuses primarily on a reduction of tariffs for trade in goods - is a better model. A closer look at the some of the remaining issues is posted below.




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    The $2 Billion Big Pharma Giveaway in CETA: Can the Government Ignore Its Own Internal Analysis?

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    Thursday October 18, 2012
    The Canada - EU Trade Agreement has been the subject of conflicting reports on the inclusion of ACTA provisions, but there has been no doubt about the ongoing dispute over the agreement's patent rules. Given the EU demands for significant patent reforms, the issue has been set aside with the ministers expected to address it when they meet in November.

    For months, big pharmaceutical companies (known as Rx&D) and civil society/the generic pharmaceutical industry have been battling over the issue. Each has released public opinion surveys that purport to demonstrate support for their position (Rx&D, civil society). More important has been a study that concluded that the proposed reforms could add billions to annual Canadian health care costs along with reports that show that the large pharmaceutical companies failed to meet research and development commitments the last time the Canadian government acquiesced to patent reform demands.

    While Rx&D sought to downplay those studies (as did the government, which described these concerns as a myth), it now faces an internal government study conducted by Industry Canada and Health Canada that placed the costs of CETA patent reform as high as $2 billion per year. The $2 billion cost would significantly decrease the government's claims of likely economic gains from CETA and heighten provincial opposition, since the costs will be offloaded to provincial health care budgets.


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    Government Study Finds CETA Drug Patent Reforms Would Cost Canadians Billions

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    Monday October 15, 2012
    The Canadian Press reports that an internal study by Industry Canada and Health Canada estimates that EU patent demands as part of the Canada - EU Trade Agreement could increase Canadian health care costs by up to $2 billion per year. The drug patent issue is viewed as a key roadblock in the CETA negotiations with the Canadian government holding off taking a position until ministers meet in November.
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