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Jean Charest, Fraser Institute want Harper to surrender to higher drug costs in CETA

It’s been one of the most controversial issues in the ongoing Canada-European Union free trade negotiations. Now, the reality of higher drug costs from intellectual property changes sought by the EU in CETA is being given a positive spin by both the right-wing Fraser Institute and former Quebec Premier Jean Charest.

The assumption by both is that Harper must give the EU what it’s looking for—longer patents, more exclusive protection for brand name pharmaceutical research, and an extra right to appeal the patent decisions of Canadian courts—because, well, it will help Canada conclude trade negotiations with Europe and in the Trans-Pacific Partnership agreement (where patents are also an issue.)

It’s that simple (and circular, as USW economist Erin Weir pointed out on Twitter). The militantly anti-protectionist Fraser Institute offers theoretical arguments for giving Big Pharma more protection (like how they might then decide to invest more in research and manufacturing in Canada) but admits the sectoral gains would not be magnificent.

“Of course, Canada is not a populous nation and is largely a net importer of patented medicines,” writes U.S. economics professor Kristina Lybecker in her half of the Fraser report. “Hence, the gains from stronger IP protection for pharmaceuticals in this country may be substantially smaller than in the US or Europe.”

Again though, the main message, which is pulled from the report to the top of the group’s media release, seems to be that, “By strengthening IP protection, Canada has a greater chance of increasing trade, gaining access to foreign markets, and reducing tariffs and trade barriers.”

We learned recently that the Ontario government believes CETA could save provincial exporters up to $100 million as a result of tariff elimination in Europe. But provincial trade officials admitted this sum would be undercut or even eclipsed by the hundreds of millions of dollars more the province would have to pay annually for Brand Name versus cheaper generic drugs, as predicted by the federal government and other studies.

As I’ve said before, this trade-off, which the majority of countries negotiating the TPP are apparently not willing to make, essentially swaps potential corporate gains (e.g. if Ontario firms make use of the lower tariffs, and if brand name drug makers bother to invest more in Canada) for absolute and permanent real losses to public revenues. It would also hit individual pocket books since private drug plans would be effected by the patent extensions.

The provinces seem to think this is a big deal. But Charest thinks Canada should cave in to the EU and U.S. demands on pharmaceuticals. He told Ipolitics.ca that, “A transition period that the federal government can organize is the answer, and I understand that’s where we’ll probably end up.”




If you haven’t done so already, tell your premier that we need to be thinking of ways to reduce drug costs, not making them more expensive by granting longer patents and more monopoly protections to some of the richest pharmaceutical companies in the world. Send your letter today!