Sue's Blog

Wednesday, October 05, 2011

So is Jerome Kennedy going to stand up for lower Drug Costs? Will we find out too late?

Please read the excerpts below from a Globe and Mail article today

Later this month, inside a stylish Ottawa office complex overlooking the Rideau River, a marathon session of trade talks is set to take place between representatives from Canada and the European Union.

While previous negotiations have roused little interest from ordinary Canadians, this round promises to be different. At stake: the future cost of health care. Also at stake: high-end research jobs.

EU negotiators are asking for big changes to Canadian laws that govern intellectual property and patent protection for brand-name prescription drugs. They argue that Canada's legal regime for intellectual property is lax and out- of-step with European norms.

Critics, however, argue the proposals will heave billions of dollars in added costs on public and private drug plans at a time when an aging population is already causing health-care spending to spike.

Some experts warn the issue could make or break the entire trade pact.

"If you are looking at this negotiation, [a trade deal] is something that Canada wants and needs more than the Europeans do," said Peter Clark, a former Canadian trade negotiator who is now president of Grey, Clark, Shih and Associates, Ltd., an Ottawa-based trade consultancy. The Europeans "are going to play their cards as hard as they can and they are doing that in a number of areas and this is one of them."

With that backdrop, EU negotiators are looking for three key changes to Canada's intellectual property regime.

First, they want Canada to provide brand-name pharmaceutical companies with a robust appeals process against
generic manufacturers.

Second, they want Canada to extend how long Big Pharma can protect the data from its clinical drug trials. It is currently eight years in Canada versus 10 years in the EU.

Third, they want Canada to provide "
patent term restoration" - a measure that exists in Europe and the United States and gives big pharmaceutical companies up to five years of extra market exclusivity for their drugs to credit them for time lost when obtaining regulatory approval.

"They are going to need at least two of three, is my guess, for it to be acceptable to the Europeans," said Jason Langrish, executive director of The Canada Europe Roundtable for Business.

Still, achieving that balance is no easy feat. Provinces and territories, which are sending envoys to attend this round of trade talks, are already struggling to contain health care spending. Businesses, meanwhile, are paring benefits to keep their own costs in check.

The Canadian Generic Pharmaceutical Association, for one, estimates the European proposals will add $2.8-billion a year in extra costs to Canadian drug plans - mostly by delaying the sale of
generic drugs by an average of 3.5 years.

In some cases, generic drugs can cost up to 75 per cent less than the corresponding brand-name medication. Mario Deschamps, president and chief operating officer of generic firm Pharmascience, argues that such savings could free up funds to hire more doctors, nurses or enable hospitals to purchase equipment.

Canada's Research-Based Pharmaceutical Companies, the industry organization for brand-name drug companies, argues that patent protection gives companies incentives to fund Canadian-based research and development.

Hugh O'Neill, president and chief executive officer of Sanofi Canada, said Canada's current intellectual property and patent rules make it hard for him to convince head office in France to earmark more funds for Canadian-based research "

It's a constant battle to be able to bring an appropriate level of resources and investment into Canada when the IP regime is at such a disconnect between the European market and the U.S.," he said.

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