The threat to public health care from CETA’s intellectual property chapter hasn’t received much attention despite it being one of the major irritants in EU-India free trade talks. The following is nowhere near definitive — just some quick thoughts on the likely effect of CETA’s IPR chapter on drug costs in Canada. Health costs would be much more sustainable if it weren’t for the high price of drugs. CETA would extend patent terms and data exclusivity rights to big pharmaceutical companies in the EU and Canada, which will limit the availability and increase the cost of generic versions. As costs rise, the pressure to privatize health services will be much greater.
According to the Canadian Generic Pharmaceutical Association, commenting on 2006 Canadian government legislation to extend data exclusivity terms from 5 to 8 years:
Data exclusivity extends a brand-name company’s market monopoly over a product, and has nothing to do with the protection of research data or patents. Data exclusivity is independent of the patent system and operates to prevent a generic competitor from entering the market. The comparison necessary to demonstrate generic bioequivalence rarely involves an examination of the brand-name company’s data by Health Canada. Brand research data is also not supplied to generic drug makers….
The association continued:
The social and economic impacts of the unfair extension of market monopolies cannot be ignored. Taxpayers, provincial governments and consumers are paying a steep price for this three-year extension – to the tune of more than $100-million each year. Had this eight-year ban been in from 2001 to 2006, it would have added approximately $600-million to prescription drug costs in Canada. It would also have blocked Health Canada’s approval of lower-cost generic equivalents of blockbuster medicines such as anti-depressants Zoloft and Wellbutrin, and cholesterol reducer Pravachol.
The government legislation increased data protection to eight years for new drugs only — those not previously approved by Health Canada. Based on a leaked copy of CETA’s intellectual property chapter we can see the EU wants Canada to increase protection for data to 8+2 years and for this to apply to any patent application — even variations of already existing drugs. The EU is also seeking “patent term extension” measures where a company can lump delays between application and the patent onto the end of the term, delaying cheaper generic versions of the same drug even longer.
According to a recent legal opinion of the IP chapter in CETA:
An irritant in Canadian relations with the United States and Europe is Canadian border measures — measures designed to catch infringing goods at the border before they enter the stream of commerce. The EU is proposing language that would allow customs officials to detain goods suspected of infringing an IP right, either further to an application by a right-holder or on the customs authority’s own initiative, even if such goods are merely in passage to another jurisdiction. For example, a drug or active ingredient brought ashore in Vancouver before shipping to the United States could be seized as potentially violating Canadian patent laws even if the product clearly does not infringe any United States law.
We’ve seen the EU apply such border measures to generic drug shipments from India passing through Europe en route to Africa. In other words, drugs that were never intended for European consumption, and were produced and traded legally under existing WTO rules in the TRIPS agreement, are being seized by EU member states as infringing the EU’s stricter intellectual property rules.
A recent Corporate Europe Observatory / FDI Watch India report explains the controversy in the EU-India free trade negotiations:
The country‘s existing policy against the abusive patenting of medicines has fostered a blossoming generics industry that not only supplies the whole of India with affordable drugs for the treatment of AIDS, malaria, cancer, tuberculosis and the swine flu, but is also their largest supplier throughout the developing world. Ninety per cent of HIV/AIDS patients in the global South currently depend on generics from India. But the EU-India FTA seems to threaten the country‘s pivotal role as the ´pharmacy of the developing world‘.
Another recent article, ‘Freer trade may hurt access to India generic drugs,’ describes how “trade talks between India and the European Union include measures that could delay or restrict competition from generic medicines by extending patent terms, requiring data exclusivity and tightening border enforcement rules. Such moves could drive up prices for India’s anti-retroviral treatments, limit dosage options and delay access to newer and better drugs, the report argued.
Canada probably could be a bigger exporter of generics (outside the United States that is) than it currently is. Canadian law and WTO rules allow it but regulatory hurdles make it difficult. For example, according to Canada’s generics association again, the Patent Law “currently restricts Canada’s generic pharmaceutical industry from actively competing in export markets for many products by prohibiting the production and export of products under Canadian patent protection – even if the product is not protected in the country where it is to be sold.”
The intellectual property regime that the EU is trying to force on other countries through trade deals is ridiculously one-sided, based on the successful lobbying of pharmaceutical and agricultural giants in Brussels. This issue will undoubtedly heat up in Canada in the coming months, especially given the required review of the Canada Health Act, which expires in three years.