Big Pharma may profit from Canada–European Union trade agreement

The Stephen Harper government is negotiating a new trade deal with the European Union that could threaten the pocketbooks of those who buy prescription drugs. That’s according to Scott Sinclair, a senior researcher with the Canadian Centre for Policy Alternatives, which is a left-leaning think tank.

In a phone interview with the Georgia Straight, Sinclair explained that “leaked text” from the trade talks reveals that the European Commission, which is negotiating on behalf of the EU, is seeking to extend monopoly protection for patented medicines. Canada already offers pharmaceutical companies 20 years free of generic competition for their brand-name drugs. Sinclair said that this is among the longest protected periods in the world for patented medicines.

But he said that this isn’t enough for European negotiators, who want time spent in the drug-approval process added to the 20-year protected period. Sinclair suggested this could add years to the time before cheaper generic substitutes are allowed on the market for Canadian consumers. In addition, he claimed, European negotiators want new rights of appeal, which would enable pharmaceutical manufacturers to drag out litigation when a generic medicine is set to be introduced. The European representatives are also seeking longer terms for “data protection”.

“So, basically, any combination of these changes, if they get them, would reduce the availability of cheaper generic medicines and drive up costs to provincial governments and Canadian consumers—probably by hundreds of millions of dollars annually,” he said. “It’s going to mean drug costs, which are already the fastest rising cost driver in the health-care system, are likely to go up.”

The EU exported $5.6 billion worth of pharmaceuticals to Canada in 2009, according to Sinclair. He explained that if Canada agrees to these measures, they will also apply to U.S.–based drug companies. In addition, he said that Canada has proposed including investor-protection measures for companies—similar to Chapter 11 in the North American Free Trade Agreement—that would give corporations the right to bypass domestic courts and go straight to international arbitration if they disagree with a government policy.

“That has been used with bad results for the public interest under NAFTA,” Sinclair alleged. “There have been 28 claims filed against Canada—that we paid over $150 million in damages and we paid tens of millions of dollars more in legal costs defending these claims. Over half of them have been against environmental protection and other public-interest litigation.”

One politician who has paid attention to this issue, NDP health critic Adrian Dix, told the Straight last month that the B.C. Liberal government has supported the federal government’s efforts to secure a trade deal with the EU. Dix, who is seeking the leadership of the B.C. NDP, claimed that the effects of the EU trade deal on patented medicines could offset all of the savings achieved by the B.C. government’s reference-based pricing system, which substitutes generic drugs for higher-priced brand names.“We’ll see a direct transfer not to the public health-care system, but to more expensive brand-name drugs,” Dix claimed.

Follow Charlie Smith on Twitter at twitter.com/csmithstraight.