Skip to content

Promises, promises on pharmaceutical drugs and monopoly patents

In 1987 pharmaceutical corporations promised to spend 10 per cent of their revenue on research and development in Canada in exchange for longer monopoly patents (and therefore bigger profits) on the drugs they produce. That deal was made by then-prime minister Brian Mulroney.

But the Patented Medicine Price Review Board has found that companies actually spent less than half that – in fact just 4.5 per cent – of their sales in 2013 on research. The National Post reports, “It is more evidence that the industry’s long-standing attempt to link patent protection with research investment holds little water, say experts in the area.”

“Meanwhile, provisions in the Canada-Europe free-trade agreement are expected to give the firms longer still to sell their drugs without competition from much-cheaper generic copies. The deal would grant up to two years extra monopoly to account for the time a drug spends in the approval process.”

The Toronto Star has reported, “Changes to Canadian patent protection rules for pharmaceuticals under CETA will, when fully implemented in several years, delay the availability of cheaper generic drugs. This could cost Canadians an extra $850 million [to $1.6 billion annually] in costs for patented drugs.”

And Council of Canadians health care campaigner Michael Butler has highlighted, “If CETA is ratified the likelihood of a National Pharmacare Plan becomes substantially more difficult (if possible at all) as we would face billions of dollars in lawsuits under the ISDS [investor-state dispute settlement] mechanism from European pharmaceutical companies.”

That’s because, “We see global capital and the government backers of predacious capitalism taking the opportunity [through these deals] to lay waste to the right of national governments to right to legislate public policy for its citizens in favour of ‘corporate rights’.” Pharmaceutical corporations – armed with the investor-state dispute settlement provision in CETA – that see a national pharmacare as an infringement on their right to profit from life-saving medication would be well positioned to stop such an initiative.

This cash grab by corporations has real implications for many people. In January 2012 the Canadian Medical Association Journal published a new study that showed one in ten Canadians (one in nine people in British Columbia) do not fill their drug prescriptions because they can’t afford to. 

In October 2013, the Canadian Press reported, “Prime Minister Stephen Harper has pledged to compensate provinces for any additional costs, which would only appear starting in 2023, assuming the deal is in place by Jan. 1, 2015. There was no pledge, however, to compensate individuals or private insurance plans.”

The promise by the Harper government of a billion dollar annual transfer by future federal governments to the provinces lacks credibility.

One might say the promise is as believable as the one made by pharmaceutical corporations back in 1987 to invest 10 per cent of their revenue back into research and development in Canada.