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Report Back from the CETA and Health Care Roundtable

Earlier this week I attended a roundtable on CETA and health care. The roundtable was organized by the federal NDP (Deputy Minister of Health, Ann Minh Thu Quach, to be exact) and in attendance were several NDP MPs, media, health professional groups and unions, and non-governmental organizations (NGOs). Presenters included: Michael McBane, National Coordinator, Canadian Health Coalition; Michèle Boisclair, Vice-President, Fédération interprofessionnelle de la santé du Québec (FIQ); and Marc-André Gagnon, School of Public Policy and Administration, Carleton University.

Michael McBane focused on the need to entirely exclude health care from trade agreements. He cited Roy Romanow’s ‘cultural exemption’ as an appropriate measure to protect health care from trade agreements. McBane commented that trade agreements and health care are incompatible because trade agreements are about investment liberalization which cuts against the grain of a public sector health insurance monopoly and medicare’s regulations on who can provide health care services and on what terms. (1)

Health care in Canada is a public good. We do not view it, nor should we treat it, as a tradable commodity. Yet, provinces like Quebec are not going out of their way to ensure that health care is protected from trade agreements like CETA.

In the leaked provincial offers, provinces and territories have not included health care as one of the services they wish to protect from trade; instead, they are relying on weak (Annex II) federal carve-outs. Social services- such as health care- which are “established or maintained for a public purpose” are suppose to be protected from trade agreements however, there is no clear definition given for “public purpose” and with increasing privatization in health care delivery, it will one day likely be argued that health care no longer.

Our current understanding of CETA and health care is that programs we try to develop in the future will be subject to international trade rules that discourage the creation of new public monopolies. So expanding Medicare to include: pharmacare, continuing care, dental care, mental health services and other programs could be found in contradiction to investment rules under CETA.

At the round table, Michèle Boisclair presented on CETA and the risk it poses to Quebec’s health care. Since the Chaoulli case of 2005 (see endnote 2), Quebec has been continually adding medically necessary services to the list of services that may be privately purchased. At the conclusion of the Chaoulli case, Quebec listed three services that would be eligible for purchase. Since 2009, that list has grown to over 50 medically necessary services that may be privately purchased. In addition, Quebec doctors who previously had to opt-out of the public sector and work solely in the private sector (meaning that they were not able to collect public funds) are now able to work in both simultaneously.

This blurring of the line between public and private health care has had several implications for Quebec (on a side note: I encourage you to read some of the news reports about Quebec doctors artificially lengthening wait times to get public health care patients into their private clinics), but perhaps most concerning is the unknown consequences that CETA could have because so much of their health care system may not be considered “for a public purpose”. This makes Quebec’s health care extremely vulnerable to challenges by investment provisions and Quebec could be forced to open themselves further to commercialization and privatization by large EU and US companies. (3)

I hate to write “unknown”- as I have above- but the reality of the situation is that very few people know any details at all about CETA. Even members of Harper’s own cabinet are not subject to information on the CETA talks. All CETA discussions and briefings have occurred in-camera making it nearly impossible to discuss CETA and its potential impacts in the House of Commons. Some MPs at the roundtable had taken part in CETA discussions, but all of those conversations had happened in-camera which meant that no one was able share any of the details coming out of those meetings. But I shouldn’t be surprised by any of this. Harper governs by stealth. There is an enormous lack of transparency with this government and as we’ve seen in the past – I’m thinking particularly of the December meeting of Flaherty and the finance ministers- the government makes decisions that we will only know about once they are upon us and then all discussion is shut down.

But back to the CETA roundtable.

Marc Andre Gagnon presented on CETA and generics. The Council of Canadians and many of our medicare allies have used Gagnon’s paper on Pharmacare extensively. Gagnon has shown that the implementation of pharmacare- a universal drug coverage programme- would save Canadians $10.7 billion a year. This would happen through the bulk purchasing of drugs, using the different cost comparator countries (see below) and getting rid of private and public administration fees by having one national insurer (like we do with hospital and physician services). CETA, in the other hand, would jeopardize pharmacare because only current government programs are protected under Annex I and II. CETA, because of its proposed changes to the intellectual property chapter, will cost Canadians $2.8 billion a year. The numbers alone should concern all of us.

But Gagnon made several other important points on a question I get asked quite often: shouldn’t we be rewarding pharmaceutical companies with large profits to ensure their continued research for new drugs? It’s a good question, if patent extensions and profits encouraged innovative and blockbuster drug creation, but that isn’t the case.

Big pharma- of which there are 15 firms (see endnote 4) controlling 2/3rd of the available drugs- has been setting record high profits. They are making the Fortune 500 year after year, yet innovation has plummeted. Most of the new drugs being manufactured by big pharma are in fact me-too drugs- drugs which have little or no additional therapeutic value. In fact, 76 per cent of new drugs were me-too. But me-too means that drugs can stay on patent longer and delay the manufacturing of generics.

There is no evidence to show that longer patents will mean more innovation. Gagnon looked at the trends set in the 1990s and saw no association between the increase in patents and the increase in innovation. By extending patents as much as we already do, we are not encouraging pharmaceuticals to come out with innovative or blockbuster drugs. Instead, we are encouraging big pharma to delay generic competitors through me-too creations or through the courts in lengthy and expensive legal battles- on average 16-18 months- the cost of which then gets transferred to the patients.

Canada already rewards pharmaceuticals through artificially inflating the cost of drugs by using price comparators with the highest paying countries. Canada has been and continues to be the 3 or 4th highest paying country for pharmaceuticals. We could save billions of dollars a year just by comparing our prices with the average of OECD countries. And although we spend all of this money on pharmaceuticals, private pharma research in Canada only accounts for 1.4 per cent of the research which is occurring globally. In Canada federal and provincial labs account for 70-75 per cent of local research and development for drugs, private labs account for just 15-20 per cent. And even though Canada pays the 4th highest prices for drugs, big pharma only invests 6.9 per cent of their profits back into research and development despite a deal in early 2000 with the federal government to invest at least 10 per cent.

And finally, many of the pharmaceutical companies in Canada- most of who have their laboratories in Quebec- are now shutting down their offices and leaving.

Marc Andre Gagnon is not against extending patents for big pharma- although he didn’t say he was for it either- he just wants to see that Canadians will benefit. His suggestion to the government is that if they do choose to extend patents for big pharma they need to negotiate a much better deal. What does that deal look like? He suggests they negotiate to pay the same prices that the EU does for drugs (at least 15 per cent lower than we pay), get rid of our current pricing system, and get 50 per cent of the companies’ revenue invested in research and development.

Gagnon also noted some injustice in the current system. Prices for pharmaceuticals are going to be heavily affected by CETA, the federal government is negotiating the trade agreement with the EU and yet, the provinces and territories are going to have to foot the bill. When questions are asked about CETA and the impacts on health care to our Minister of Health Leona Aglukkaq, she refers them to the chief trade negotiator; she honestly doesn’t know the answers because she’s not part of the negotiating team. Canada’s health care is being traded away by a trade negotiator and the discussions are being kept secret even from the Minister of Health!

There was a lot to take away from the NDP’s roundtable. The presentations were well done and the questions posed by the audience were thoughtful. However, the secrecy of this agreement is disturbing on many fronts and the possible consequences for public health care are far-reaching.


1. For more information on how trade agreements jeopardize health care see Scott Sinclair’s report from the 2003 People’s Summit on health care at:

2. The Chaoulli case v. Quebec ruled that medically necessary services could be paid for with private insurance for those wanting to jump the queue, if the wait in the public system was deemed too long. Shortly after the Chaoulli case, Quebec offered three services for de-listing- meanly they could be purchased in the private system using cash or private insurance. Today over 50 services are de-listed.

3. The NAFTA has a clause that says what Canada offers to any other trading partner, the US can also benefit from. Therefore, if we open ourselves up to privatization in our health care sector through CETA, the benefits we give to the EU will automatically be extended to the US.

4. Not one of these firms is Canadian. 8 are American, 1 is Japanese, and the rest are European according to Gagnon.