November 14, 2012
OTTAWA, ON, Nov. 14,2012/ Troy Media/ – A recent Canadian Press report on trade negotiations between Canada and the European Union (CETA) says Ottawa is prepared to give the Europeans, and the pharmaceutical industry, at least part of what they asked for on drug patents – a move that could cost Canadians up to $1 billion a year.
Canada currently pays 15 to 20 per cent more than the international average for new brand name drugs as part of a deal negotiated by the Mulroney government in the 1980’s. In exchange for this form of price fixing, big pharma promised to invest 10 per cent of R&D (Research and Development)-to-sales in Canada.
The industry broke this promise and now invests only 5.6 per cent of R&D-to-sales – the lowest rate of R&D investment from the pharmaceutical industry since 1988. France and the UK have an R&D-to-sales ratio that is more than twice that of Canada and their prices are at least 10 per cent lower.
The higher prices in Canada for new brand name drugs are costing us at least an additional $2 billion a year. The provisions in the CETA on patent extension would cost at least another $1 billion annually. The Harper government is rewarding bad behavior and broken promises with an additional $3 billion a year.
To make matters worse, the drug industry uses this money, not for innovation, but to buy influence with the federal regulator, physicians, consumers and the media through their advertising departments.
Is there a word for ‘being bribed with your own money’?
If media reports are accurate, Canada will extend monopoly drug patents from 20 to 21 years. This patent extension will come without any conditions. In other words, we get nothing in return for this major concession. No jobs, no research, no innovation, no benefits whatsoever – only higher drug bills.
Throwing drug patents into a trade agreement is like throwing deregulation into a budget omnibus bill. It is intended to pass below the radar and evade public scrutiny. We need to take patents out of secret trade agreements and impose conditions that benefit the public interest in exchange for drug monopolies.
This failed industrial policy does tremendous damage to the integrity of our health care system, not to mention our democracy
The new money generated by the pharmaceutical provisions of the CETA is corporate welfare negotiated by the federal government but paid out of provincial health budgets and the pockets of seniors and the sick.
To add salt to the wounds, imagine how the provinces and territories feel about being lectured to by the Prime Minister about getting their health care costs under control.
The time has come to stop rewarding brand-name pharmaceutical companies because they have stopped innovating and broken their commitment to R&D in Canada. We now invest twice the amount in the form of various subsidies to the brand-name drug industry than we receive in benefits.
Canada’s so-called ‘Research-Based’ pharmaceutical companies have all but stopped conducting research in Canada. In fact, 59 per cent of the gross expenditures of patented drug companies on pharmaceutical R&D in Canada were tax subsidies from the public purse.
The so-called ‘innovative’ drug industry in Canada deploys three times the amount of money on marketing and promotion than it does on R&D. Canada’s health research and innovation strategy is irrational since it is organized around large public subsidies for private sector R&D, when net company R&D funding is marginal.
It is economically irrational for the Canadian taxpayer to put more subsidies into the pharmaceutical industry than they receive in benefits. This industrial policy is also socially irresponsible as Canada’s artificially high prescription drug prices constitute a barrier to essential medicine for millions of Canadians.
It is time to end to large public subsidies that produce disproportionate benefits for the brand-name pharmaceutical industry.
Access to essential medicine and access to generics are key elements in a sustainable public health care system. Canadians don’t want this traded away. This drug deal may have side effects at the next election.
Michael McBane is the National Coordinator of the Canadian Health Coalition in Ottawa. www.healthcoalition.ca
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