Transnational pharmaceutical corporations are highly profitable businesses that are seeking to increase those profits through extended patent protection provisions in so-called 'free trade' agreements like the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the 12-country Trans-Pacific Partnership (TPP).
The Globe and Mail's Report on Business magazine reports, "With annual sales of $1.3 trillion (U.S.), the world pharmaceutical market is matched by few other sectors. The same is true in profits: Over the 10 years ending in 2012, the 11 largest global drug companies made $711 billion (U.S.) in profits; their CEOs took home a total of $1.6 billion (U.S.). ...Drug companies that do hit upon winning discoveries can print money for years thanks to patent laws and scientific data-protection laws that grant them long periods of market monopoly."
ROB highlights, "These days, the brand-name drug companies continue to lobby Canadian trade negotiators to further extend patent protection, confirms [Canada's pharmaceutical industry's lobby group] Rx&D’s president, Russell Williams... In the negotiations leading up to the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, which was largely completed in 2014 and now awaits ratification in Europe, the European drug makers and Rx&D pressed for, and won, an increase in drug patents from 20 to 22 years in cases of regulatory delay (that is, where government safety concerns delay introduction of a drug)."
In addition, "Canada freely ceded similar drug patent extensions within the new 12-nation Trans-Pacific Trade Partnership (TPP), which includes Japan and the U.S., the countries that are home to all of the Big-Pharma firms not based in Europe. ...[That's because] the brand-name giants pushed for extended patent protection not just for traditional drugs but also for the new class of biotech-derived drugs known as biologics. ...Biologic drugs are produced using biological processes rather than the chemical synthesis that creates conventional drugs."
While biologics may be less well known than conventional drugs, "By 2018, biologics will account for half of European spending on pharmaceuticals. Canada shows the same trend: Four of Canada’s five top-revenue pharmaceutical products are biologic, with total annual sales of more than $2 billion in 2014, the CGPA [the Canadian Generic Pharmaceutical Association] says."
One example of a biologic is Solvadi, a treatment for hepatitis C that costs $84,000 per patient for a 12-week period. ROB notes, "[A U.K.-based analyst, who works for the medical-data company IMS Health, Alan] Sheppard predicted its global sales could reach $34 billion (U.S.) annually by 2019. ...Along with similarly priced cancer biologics, it is adding costs to health-care budgets that are 'pretty much unsustainable', Sheppard warned... 'Medicine budgets will become unsustainable with the surge in innovation', argued Sheppard, 'so optimal use of generics and biosimilars [the generic equivalent for biologics] will be essential to ensure affordability.'"
Beyond this, the extended patent protection being granted to these transnational corporations is not directly benefiting research Canada.
In recent years, numerous transnational drug companies have shuttered their research centres in Canada. In the article, retired McGill University professor Dr. John Bergeron notes, “They’ve all moved their research out of Canada to places in Asia, Europe and the U.S. with bigger drug markets and better research commercialization prospects. It’s a disaster for Canadian science, and for our economy, too." ROB gives the context that, "Most of the recently abandoned drug laboratories in Montreal were built in the 1990s after the federal government agreed to pass legislation that substantially increased drug patent protection, to 20 years. In return, international pharma companies promised to sink 10% of Canadian annual sales back into R&D in Canada."
The article continues, "That quid pro quo was piloted by then-prime minister Brian Mulroney in a prelude to the 1988 U.S.-Canada Free Trade Agreement." But the reality is, "What Canada does have, in diminishing quantity, is branch plants of global companies that, in deciding where to invest in research, can shop for jurisdictions much more freely than a consumer can shop for drugs. ...Federal government data indicates the brand-name drug industry’s investment in Canadian R&D slipped from the 10% of sales it once promised to less than 4.5% in 2013. That figure represents a 16% drop from 2012, even though patented drug sales in Canada increased 6.5% to $13.6 billion that year."
Even worse, "While the industry formally committed to increasing R&D in return for stronger patent protection from the Mulroney government, [Carleton University professor Marc-André] Gagnon notes, it has offered no such commitment while pressing for even stronger protections within the CETA and the TPP."
To read the full Report on Business article by Paul Christopher Webster, please click here.
Promises, promises on pharmaceutical drugs and monopoly patents (October 2014 blog)
'Free trade' deals a threat to health care for all (February 2015 blog)
CETA costs, pharmacare saves; which did Harper choose? (June 2015 blog)