Wednesday November 14, 2012
The Canadian Press reports
that Canada is ready to cave to European demands for changes to patent
rules that could cost Canadians hundreds of millions of dollars in
higher health care costs. The ministerial meeting on the remaining CETA
issues is set for next week.
TagsShareWednesday November 14, 2012
Thursday June 09, 2011
in the Toronto Star on June 5, 2011 as EU/Big Pharma Deal Would Raise
Health Care Costs
Ed Fast, Canada’s new Minister of International Trade, may not be
household name, yet the B.C. Minister is set to play a key role in one
of Canada's top domestic priorities - health care costs. The link
between international trade and health care is not immediately obvious,
but a proposed trade agreement between Canada and the European Union
could have big implications for the costs of pharmaceutical drugs, on
which Canadians spend $22 billion annually.
The E.U. is home to many of the world's big brand name pharmaceutical
companies and one of their chief goals is to extend Canada's
intellectual property rules to delay the availability of lower cost
generic alternatives. Earlier this year, the Canadian Intellectual
Property Council, an advocacy group within the Chamber of Commerce,
released a report claiming that Canada lags behind other countries and
encouraging the Canadian government to follow the European example by
extending the term of pharmaceutical patents and "data exclusivity."
The CIPC (which counts several brand name pharmaceutical companies as
members) claims the reforms would lead to increased pharmaceutical
research and development in Canada. But last week University of Toronto
law professor Edward Iacobucci released a study that thoroughly debunks
the CIPC claims, predicting increased consumer costs and noting that
there is little evidence the changes would increase employment or
The Iacobucci study, which received support from the Canadian Generic
Pharmaceutical Association, is a must-read for Fast, trade negotiators
and policy makers since it clarifies the likely costs associated with
the EU demands.
Iacobucci points out that competition from generic pharmaceuticals can
have an enormous impact on consumer costs. For example, when generic
alternatives to the cholesterol medication Lipitor appeared on the
market in 2010, annual revenues for the drug dropped by $350 million.
Given the billions spent on pharmaceuticals each year, rules that delay
generic competitors can lead to huge additional costs.
Iacobucci also questions the premise that increased intellectual
property protection for pharmaceuticals will invariably lead to job
growth and increased research and development spending. On the
employment front, he notes that the brand name and generic
pharmaceutical companies are both big employers in Canada - 15,000
employees for brand name and 10,000 for generics - and policy changes
might not yield any net new jobs.
Iacobucci challenges the notion that because intellectual protection is
good, more protection must be better. The report notes that this is
particularly true in the Canadian context, which is a small player in
the global pharmaceutical market. Canada represents only 2.5
percent of the world market, meaning that Canadian laws have little
impact on international incentives to innovate.
In fact, Iacobucci reveals that previous Canadian attempts to use
policy levers to generate increased pharmaceutical research have
largely failed. In 1987, Canada began enacting a series of reforms with
the promise from brand name pharmaceutical companies that their
research and development budgets would equal at least ten percent of
domestic sales. The government kept its end of the bargain with changes
that delayed the entry of generic drugs by up to two years and granting
eight years of data exclusivity. Yet despite the reforms, Canadian
research and development spending has regularly failed to meet the ten
Moreover, while the percentage of research and development spending may
not have increased, Canada's pharmaceutical trade deficit certainly
has. In 2000, the Canadian pharmaceutical trade deficit - the amount
that imports exceeded exports - stood at $3.7 billion. By 2009, the
trade deficit had grown to a record $6.4 billion.
Those numbers help explain why Canada will face great pressure to
favour brand name, predominantly foreign-based pharmaceutical
companies. As Fast tallies the costs and benefits of further
pharmaceutical reforms, the Iacobucci study confirms that there is
little in it for Canada.
Michael Geist holds the Canada
Research Chair in Internet and E-commerce Law at the University of
Ottawa, Faculty of Law. He can reached at email@example.com or online
TagsShareThursday June 09, 2011
Friday November 03, 2006
The Canadian Supreme Court has issued another decision that recognized the limits of intellectual property. This case, a pharmaceutical patent fight between AstraZeneca and Apotex, includes language from the court that explicitly warns against the practice of evergreening, whereby pharmaceutical companies seek to extend the life of patent protection by adding new patents of marginal significance.
In overturning a Federal Court of Appeal ruling that favoured AstraZeneca, the court said:
"By imposing the 24-month delay called for by the NOC Regulations, the decision of the Federal Court of Appeal undermines achievement of the balance struck by Parliament between the objectives of the FDA and regulations thereunder (making safe and effective drugs available to the public) and the Patent Act and its regulations (preventing abuse of the early working exception to patent infringement). Given the evident (and entirely understandable) commercial strategy of the innovative drug companies to evergreen their products by adding bells and whistles to a pioneering product even after the original patent for that pioneering product has expired, the decision of the Federal Court of Appeal would reward evergreening even if the generic manufacturer (and thus the public) does not thereby derive any benefit from the subsequently listed patents."
TagsShareFriday November 03, 2006