EU trade deal tough pill to swallow for drug makers

Canada’s generic drug makers are warning a proposed trade agreement with the European Union would add billions to prescription costs — but the federal government says it’s far from a done deal.

OTTAWA — Canada’s generic drug makers are warning a proposed trade agreement with the European Union would add billions to prescription costs — but the federal government says it’s far from a done deal.

A study for the generics industry predicted the European proposal would cost Canadians $2.8 billion a year by extending protection for drug patents and delaying the arrival of generics.

But International Trade Minister Peter Van Loan told the House of Commons on Monday that no such agreement exists.

The study was commissioned by the Canadian Generic Pharmaceutical Association, which represents generic drug makers.

EU proposals made in negotiations would lengthen the period of market exclusivity for brand-name drugs in Canada, a release on the study said.

That would delay the availability of generics in the Canadian market by about 3.5 years, said the study’s authors — Aidan Hollis of the University of Calgary’s Department of Economics and Paul Grootendorst from the University of Toronto’s Faculty of Pharmacy.

NDP health critic Megan Leslie said the report shows a major failure of leadership on the part of the Conservative government.

Why keep supporting “Big Pharma?” she asked in the Commons.

“This is actually one of many issues still to be negotiated,” Van Loan said. “There’s no agreement on it yet.

“We can tell you with sound assurance that this government will only enter an agreement that is in Canada’s best interests.”

The study forecast that under the European proposal, the annual prescription drug bill for Ontario would increase by $1.2 billion, while in Quebec the increase would be about $773 million. In B.C., costs would jump by $249 million, $212 million in Alberta, and $95 million in Nova Scotia.

Manitoba’s costs would climb by $80 million, Saskatchewan’s by $72 million and New Brunswick’s by $52 million; the cost in Newfoundland and Labrador would jump by $46 million, $10 million in P.E.I., $2.6 million in the Northwest Territories and $2 million in the Yukon.

The projected added costs would be borne by the provincial governments, employers that sponsor drug plans for employees and patients, the study said.

Ontario Health Minister Deb Matthews said it’s vital to keep drug prices as low as possible.

“Keeping an eye on the price of drugs is very, very important.”

Judy McPhee, acting director of pharmaceutical services for the Nova Scotia Health Department, said the province is keeping a close eye on developments.

However, she wouldn’t comment directly on what Ottawa should or shouldn’t do in its negotiations with the EU.

“Generic drugs are less costly and they do save us money,” she said.

“Any changes that would delay a generic coming to market we would lose potential savings.”

But McPhee said she had no way to substantiate the study’s projection that Nova Scotia’s prescription drug bill would increase by $95 million through potential delays.

“There is an end date for a patent, but oftentimes the patent is challenged long before that end date and they do end up coming on earlier.

“So it’s really difficult to estimate when a patent would expire and when the generic alternative would become available in order to come up with a number,” she said.

Van Loan said the government isn’t going to fold in negotiations.

“What we’re working on with the European Union is an agreement that will result in jobs and economic prosperity for Canadians from coast to coast,” he said.

“We’ll deal with all the issues that come to the table, many of which remain to be negotiated, but we’ll deal with them firmly and in Canada’s best interests.”

The talks with the EU opened almost two years ago. The sixth bargaining session was held in Brussels last month, with a seventh round scheduled for April in Ottawa.

The EU has 27 member states and a population of 500 million and is Canada’s second-largest trading partner after the United States.

A joint Canada-EU economic study, released in October 2008 suggested that a free-trade agreement would boost Canada’s economy by $12 billion a year and increase two-way trade with Europe by 20 per cent.