Why you need to care about the Comprehensive Economic and Trade Agreement (CETA)

The Comprehensive Economic and Trade Agreement (CETA) is a proposed free trade agreement currently being negotiated between Canada and the European Union. The negotiations have mostly been taking place away from the public eye, but since the leak of CETA intellectual property (IP) chapter, it has slowly garnered attention due to the provisions relating to pharmaceutical patents. Right now, drugs are the second largest category of health expenditures in Canada, and that helps us establish our current level of care. It is clear now that the EU demands[1] for expanded pharmaceutical patent protection will delay entry of competitor generic products by about 3.5 years and increase prescription costs for the provinces and private insurers by about $2.8 billion per year. It would also arguably position Canada as the country with the strongest IP protection for pharmaceuticals in the world.

The public needs to care. In an Ipsos-Reid poll, 81% of Canadians supported a trade agreement between Canada and the EU. But when they were told that such a trade agreement might extend patent protection for brand name pharmaceuticals (leading to overall increases in prescription costs), support for the trade agreement plummeted to 31%. With private insurers are already looking to cut costs by limiting their coverage to generic products only and a growing acceptance for more private healthcare options, it will be the public who ends up paying more out-of-pocket for the same level of care if these IP provisions are allowed to push through.

The provinces need to care. The federal government has been negotiating CETA largely in secret, yet it is the provinces who will be responsible for footing the bill of increased pharmaceutical costs. Industry Canada isn’t exactly denying this. If the EU secures the expanded patent protections, the hard-fought savings realized from aggressive generic drug reforms and bulk buying agreements will be muted. Trade negotiations are complex, and this is but one of the bargaining chips on the table.[2] But with healthcare spending per capita increasing rapidly, an aging population, and a push for a national pharmacare program the provinces should acknowledge that ceding this demand will result in more taxpayer dollars for the same level of care.

Pharmacists need to care. Other healthcare professionals need to care. Prescribers get frustrated when their first choice of therapy for a patient needs to be substituted because of prohibitive medication costs. If the provinces must pay more for drugs, it means fewer resources for other areas of healthcare. Thus far, healthcare professionals have not been part of the dialogue. Instead, the pharmaceutical companies have been gently gathering public support through efforts like protecthealthcare.ca suggesting that greater IP protection is required for more innovation, even though the data suggests otherwise. Most recently Rx&D Canada — the advocacy group for Canada’s brand pharmaceutical companies — released the results of a poll suggesting that Canadians do support the CETA provisions to extend patent lifetimes. But here’s how they posed their question:

Should Canada have more, the same or less protection for intellectual property as our other major trading partners like the United States and the European Union?

Certainly most Canadians would agree we should be on par with our major trading partners in every respect. As Canadians we have this insecurity of always “being behind”. And intellectual property protection can mean anything from downloading copyrighted music to preventing fake Gucci bags from being sold under trademark law. It hardly supports Rx&D Canada’s President Russell Williams’ statement that:

It is clear Canadians understand the value of strong IP in improving health care and achieving economic growth.

The second poll question was even more troublesome:

Do you think stronger intellectual property safeguards will encourage, discourage or have no impact on the level of private sector investment in research and development in Canada?

Intellectual property law is difficult, even for IP lawyers. Legal theorists have long argued about the justifications for patents and IP protection – that is, why do we even need it — and now some lawyers are beginning to think that IP laws actually stifle innovation rather than encourage it. You can ask anything you want of the unsophisticated public in a poll question, but not every question provides a meaningful result.

Healthcare providers, lawyers, government officials, everyone — we all need to care about the implications of CETA. As a society, we ought to push for measures which encourage new innovative breakthroughs in healthcare. That’s a difficult problem, but extending patent terms isn’t the answer. If we fail to join the discussion on CETA, we could end up spending more for the same level of care.

  1. The EU is home to many brand name pharmaceutical manufacturers who account for a significant portion of imported brand name medications into Canada.
  2. There is a report from the National Post that the provinces were involved in the negotiations. The report is reproduced here.


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1 Comment
  • Ryan Herriot says:

    I share your concerns about extended drug patents. However (and I know this is off-topic), what I am most curious about is whether or not this agreement will include any labour mobility provisions. It always seems to me that free trade – that is, the free movement of capital – might not be such a bad thing if accompanied by the free movement of labour. But I’ve heard very little about this. Do you know anything along these lines? My interest is partly selfish of course, I’d love to be able to easily work in Europe for a few years…


John Greiss


John Greiss is a pharmacist and lawyer. He writes about pharmacy and health policy at 7drams.ca.

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