In Part 1 we ended with the question: So what (or who) is driving this Liberal government to follow the Harper governments path in championing trade deals that are not in the interest of the country and why is this government evading its responsibilities to improve health of Canadians?
We know the TPP was negotiated with asymmetric secrecy, away from the public and behind closed doors. Sham ‘consultations’ aside (i.e. waiting for the US congress to make a decision and wanting to present the auspices of public input), this deal has been driven by industry. Specifically the major force behind this deal is the pharmaceutical industry, or ‘big pharma’ as it is colloquially known. While media attention, especially in Canada, tend to focus on the ‘big oil’s’ role in influencing government policies, behind the scenes the pharmaceutical industry and their lobby make all others look like bit players.
Long before people had even heard of the TPP the pharmaceutical industry was actively lobbying on the file. In 2009, lobbying reports in the US showed, “28 organizations filed 59 lobbying reports mentioning the then far-off trade agreement. Almost half of those organizations were pharmaceutical companies or associations.” In 2015 pharmaceutical companies in the US spent, “50 percent more on lobbying than the runner-up industry (insurance). That tracks long-term trends, with Big Pharma spending $3.2 billion on lobbying since 1998, almost 50 percent more than the runner-up insurance companies.”
Robert Weissman, president of Public Citizen, put the struggle against the TPP ‘death sentence’ in a broader context: “Pharmaceutical industry greed has reached heights never seen before. The price of medicines has nothing to do with the cost of making them – and virtually nothing to do with the cost of research and development. Big Pharma companies are price gouging simply because they can. Drug prices are so high because there’s no competition, and because Big Pharma spent more than $1.2 billion on lobbying [in the US] over the past five years and it employs an army of more than 1,400 registered lobbyists to keep it that way. As part of a comprehensive strategy to reform our broken system, we must fight Big Pharma’s scheme to win still more expanded monopoly protections through the TPP.”
A excellent recent report on the health impacts the TPP would have on the Sustainable Development Goals the came out of the Rio+20 Conference in 2012 highlights, “This political nature of trade negotiations, with many corporations also involved in closed-door consultations during TPP development, means that future trade negotiations must recognize, and attempt to limit, influence from special (corporate) interests to allow for the emergence of health-sensitive trade policy. This will be no easy task as power imbalances inherent to trade negotiations ultimately reflect the wider (and still growing) imbalances in the global economy since the rise of neoliberalism in the early 1980s, characterized by an increasingly inequitable distribution of resources combined with emphasis on market mechanisms and individual responsibility.” The TPP will have a major effect on health and access to medicines globally while increasing profits for the pharmaceutical industry. Doctors Without Borders (MSF) has stated the, “TPP will still go down in history as the worst trade agreement for access to medicines in developing countries, which will be forced to change their laws to incorporate abusive intellectual property protections for pharmaceutical companies.” In Vietnam for example, the poorest country in the TPP, it is estimated that 45,000 people could stop getting drugs to fight HIV because of provisions that will boost the price of therapy (68 percent of Vietnam’s eligible HIV patients currently receive treatment, but post-TPP only 30 percent could retain access to antiretrovirals). In a recent letter MSF and other allies stated that the, “TPP would do more to undermine access to affordable medicines than any previous U.S. trade agreement.” This is quite the statement considering the 2001 U.S. and Jordan free trade agree saw a 20 percent increase in medicine prices between 2002 and 2006. Some countries, including Guatemala, Jordan and Colombia, have seen dramatically higher prices for medicines under TPP-like rules. The effect of longer monopolies will not appear in aggregate data for years after negative health effects will no doubt be incurred. As MSF’s policy director stated, “Doubling down on the current system isn’t just the wrong prescription; it’s also a deadly one.”
In Canada, a major issue often overlooked when discussing the TPP is the huge effect it will have on the price of costly biologic drugs (a previous blog of ours discussed what biologics are more in-depth) and delay subsequent entry biologics (called biosimilars or follow-on biologics in some other countries) from entering the highly profitable market. The real truth to the matter is that biologics are in the TPP because they represent big money for pharmaceutical companies as new chemically synthesized drugs offer less of a chance for ‘blockbuster’ drugs than biologics. Studies believe the global market biologics will reach $386.7-billion by the end of 2019. Further, biologics are expected to account for approximately 17% of total global spending on medicines by the end 2016 and reach an overall market value of $200 billion to $210 billion by the end 2016, up from $157 billion in 2011. Pharmaceutical companies are increasing shifting their R&D to biologics (the number of biotech patents applied for every year has been growing at 25 percent annually since 1995) as it has yielded better returns than the pharma-industry average. As we have seen in Canada, biologics are an increasing burden on health care budgets. In 2010, biologics comprised over 14 percent of the Canadian pharmaceutical market and cost the Canadian health care system more than $3 billion a year; biologics are expected to grow to approximately 20 percent of the market over the next decade.
*Red are biologics
As far as I can tell the Canadian Medical Association has been silent on the TPP and rising biologics costs (which sadly is no surprise at all). Recently the chairman of the New Zealand Medical Association told the NZ Parliament's foreign affairs, defence and trade select committee that, “You're extending your cost monopoly for the producer of the products of the most expensive primary treatment that we offer. It is a concern.” Where as in chemically derived generic medication of brand-name drugs you see costs cut around 60-80%, for bioloigically derived SEB/biosimilar medication that reduction is around 20-30%. He also explained that most of the new cancer treatments are biologics and, “More than 40% of new pharmaceuticals produced today are biologics... It is the future... It is going to be the vast majority of health care that we provide.”
The pharma lobby in the US and Canada is not happy with the gift they have been given at the expense of our health. Knowledge Economy International (KEI) has reported that on April 9th, 2016, “the Obama Administration sent a document to Congress defending the TPP against criticism from the pharmaceutical industry that they did not get enough from the deal. The administration document includes a four page "Background on TPP Biopharma Provisions" in the TPP". The memo is a useful (if incomplete) description of many of the ways that the TPP will make drug monopolies more common, stronger and longer, and drug prices higher.” Further, in one of the attachments, “The Obama Administration was apparently happy to share one of the quotes highlighted in the BioCentury article:‘THE TPP WILL STILL GO DOWN IN HISTORY AS THE WORST EVER TRADE AGREEMENT FOR ACCESS TO MEDICINES.’ -Rohit Malpani, MÉDECINS SANS FRONTIÈRES.” You can’t make this stuff up.
US pharmaceutical companies will be getting a windfall with the TPP despite already raking in massive profits year over year. Data shows in 2013, “pharmaceutical giant Pfizer finished the year with a mind-boggling 42 percent profit margin, and the world’s ten-largest drug companies, most of which are based in the U.S., made average profits of 19 percent. There is simply no other industry that consistently makes these kind of ridiculous profit margins.”
*graph produced by Council of Canadians representing 2014 and 2015 federal lobby topics
The pharmaceutical lobby is also extensive and influential in Canada. Even the most cursory look at federal lobbying communications reports show weekly a myriad of drug companies (either home grown of subsidiaries of international companies) and their lobbyist are busy influencing policy. They use the same backdoor efforts as their American counterparts to further entrench their interests at the cost of the public. Since the Liberal government was sworn in late last year, the meetings with the institutional corruption in the Canadian pharmaceutical sector, hidden in well funded PR and GR campaigns, is deep rooted. While Canada’s lobby reports are more general then those in the US, international trade was the top lobbying topic for Canada in 2015. Reading between the lines and scanning the reports the pharmaceutical sector and their industry association comes up time after time on this topic. International trade was mentioned 1,476 times in Canadian lobby communications reports in 2015 which is 248 more times than the number two topic. The top three topics: 1) international trade, 2) industry, and 3) health, call all encompass the pharmaceutical sector depending on how they choose to report their communication.
*A small sample of the pharmaceutical industry's lobbying of the health ministry since the Liberal government was sworn in in early November 2015
It should be noted as well that the same influence of big pharma is played out on the provincial level. Take one province for example, British Columbia. Among the many scandals Christy Clark and her BC Liberal government have faced, perhaps the most egregious involved the pharmaceutical industry. In 2012, the government suddenly and unjustly fired eight health ministry researchers with allegations of breach of privacy. As the huffington post stated, “One of the researchers tragically committed suicide under the pressure of it all, others have brought claims forward against the government. One of the most recent brings up the possibility the big pharmaceutical companies played a role in the firings. Also, it doesn't help that these big pharmaceutical companies happen to be Liberal party donors (are we starting to see a pattern here?)” Later, a leaked email from the Ministry of Health indicating that studies into Champix would be ‘kept in house’. The researcher who committed suicide after being fired was, “designing a way to evaluate a project that was one of Premier Christy Clark's pet initiatives and that included a drug that continues to generate serious safety warnings. According to the Ministry of Health, 68,000 British Columbians have been prescribed the provincially-covered Champix through the smoking cessation program since 2011 and the sales have generated approximately $20 million for Pfizer. The B.C. Liberal Party has received more than $40,000 in donations from Pfizer over the past ten years.” If the researchers were to shine a light on the side effects of the drug on BC provincial formulary it would lead to diminished sales for Pfizer. It should also be noted that between 2005 and 2012 (when the firings occurred), the BC Liberals received nearly $600,000 in donations from drug companies and pharmacies (that we know of).
After slandering the fired researchers, Premier Christy Clark and her senior ministers have been using a variety tactics to avoid a public inquiry. The Vancouver Observer pointed out a public inquiry, “threatened to challenge the intimate relationship between the BC Liberal government and the pharmaceutical industry...The relationship between the BC Liberals and Big Pharma had already been clearly mapped out years ago, with the formation of the Pharmaceutical Task Force, whose nine members were dominated by drug industry representatives, including — astonishingly — Russell Williams, “president of Canada's Research-Based Pharmaceutical Companies (Rx&D), a national lobby group with members from some 50 drug companies and whose directors include the presidents, CEOs and other top officials from 14 of the country’s biggest drug manufacturers.” After the firing scandal broke out the Clark government told the public there was an investigation going on but RCMP documents obtained through a Freedom of Information request by the Vancouver Sun show police were not given evidence by the government to even begin a probe and investigate the wrongdoing which was used to justify the firings. After the government was called out on yet another lie, they informed the the Ombudsman's office to investigate the incident despite its obvious conflict, bias, inadequate mandate and lack of resources for an investigation of this size. The seven researchers and the widow of one have been continuing to call for a public inquiry to get to the bottom of the cover up, but the call has been rejected by the Health Minister Terry Lake and Premier Christy Clark. The CBC reports that, “According to the group, only a public inquiry with the power to require testimony under oath and demand documents and emails from political and government sources will be ‘free to follow the evidence wherever it leads.’” With that being said one has to wonder how much evidence was deleted or written on post it notes.
Recently it was revealed that the Christy Clark has been getting a salary top up from the BC Liberals, $277,000 since she was elected leader of the party in 2011. The CBC noted that, “But failing a smell test hasn't bothered Christy Clark in the past, and that's unlikely to change... Christy Clark must also deal with the perception those donations come in large part because of her influence as premier. The Liberal party is funded by donors — many of whom pay as much as $10,000 for fundraising dinners that involve meetings with Clark.” These cash-for-access events raise serious ethical concerns (there is likely still four seats for sale at the premier's table later this month in Prince George for the party's annual dinner. They can be had for $25,000 a pair). Who can attend such expensive dinners, we don’t have a list but you can probably take an educated guess (pharmaceutical sales in Canada are over $22 billion). Since 2005, the B.C. Liberal party has raised more than $107.8 million—$70.2 million of that from businesses and corporations. Lobbyists and lobby firms (who often represent pharmaceutical companies who don’t use in house lobbyists) have donated more than $1.1 million to the B.C. Liberals in the same period. With legalized corruption and close ties to Big Pharma, it is no wonder then that the splash page on the BC Liberals website is in support of the TPP.
It is up to Canadians to shine a light on the institution corruption spread by the pharmaceutical industry when our governments have been bought off. It is clear that the industry has the power to influence Canadian trade agreements, public health policy, clinical trials, and doctors. To understand (and effectively combat) the predatory influence of this industry it is essential to understand the political economy of Big Pharma. Both in the US and Canada the pharmaceutical industry is rigging the political system putting patents and profits before patients. Now more than ever trade deals like CETA and the TPP are further entrenching the pharmaceutical industry’s supremacy over public health policy and domestic laws. We need Good Pharma, not Big Pharma.