Pharmaceutical sector sees major benefits for companies and patients in trade agreement
By Chris Freimond
The intellectual property (IP) protection provided by the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU) is expected to help drive investment, support high-paying jobs and lead to an improved health care system and better patient outcomes for Canadians, according to Canada’s Research-Based Pharmaceutical Companies (Rx&D).
Declan Hamill, chief of staff and vice president of legal affairs at Rx&D, says his organization believes CETA is the most significant free trade agreement since NAFTA, not only for the pharmaceutical sector, but for Canada as a whole.
“We believe that it will help steer life sciences research and development investment to Canada, which is one of our major endeavours,” he says. “This is good for Canada and good for Canadian patients.”
Canada’s innovative pharmaceutical industry is a substantial contributor to the Canadian economy and to research and development. The sector employs directly and indirectly approximately 46,000 Canadians and spends over $1-billion a year on R&D.
Mr. Hamill points out that while Canada already has an excellent health care infrastructure including some of the world’s top physicians, scientists, universities and research institutions, the country’s IP system is not on par with that of our major trading partners. CETA will help change that.
“In all major respects, our IP regime lags behind those of our trading partners, including the European Union, which is Canada’s second largest trading partner after the United States,” he explains. “To some extent, this has been confirmed through the CETA negotiations, where Canada was being asked to step up its IP standards and adopt measures that have already been implemented elsewhere, including in the EU. While the CETA IP changes do not necessarily remedy all ills, they do represent an encouraging step forward.”
Mr. Hamill said CETA should also have a positive effect on consumers who are likely to benefit from an improved health care system that delivers better patient outcomes.
He adds that some critics’ complaints that robust IP protect results in higher drug prices are incorrect and points to the EU as an example of a jurisdiction with strong IP protection, but generally lower drug prices than Canada.
“Clearly, IP cannot be the only driver of pricing,” says Mr. Hamill. “In essence, IP is an economic policy tool, not a social policy tool. Health care sustainability is a very important issue, and it’s one that our member companies are actively engaged on, but sustainability will never be achieved through weak IP.”
Gilles Gagnon, president and CEO of Ceapro Inc., an Edmonton-based biotechnology company focused on developing and commercializing functionally active ingredients for human and animal health markets, says CETA will make investment in Canadian biotech – particularly early stage projects – far more attractive for EU companies.
“Attracting foreign investment is very important,” he says. “History shows us that successful biotech companies that have grown a project from the lab up to the patient have done so in partnership with big pharmaceutical companies.”
Up to now, EU pharmaceutical companies have had no real incentive to invest in Canadian biotech firms, adds Mr. Gagnon.
“Why would they invest in Canada if they can benefit from far better IP protection in Europe?” he asks. “If we don’t offer at least the same conditions, it’s very difficult for us to convince them that our early-stage projects are worth an investment. CETA will make it much easier for us to make a strong case for partnerships.”
“Health care sustainability is a very important issue, and it’s one that our member companies are actively engaged on, but sustainability will never be achieved through weak IP.”
Declan Hamill is chief of staff and vice president of legal affairs at Rx&D
By the numbers
15,000 Research-based pharmaceutical industry jobs in Canada
31,000 Indirect jobs supported by the sector
$1-billion Annual R&D spending
$3-billion contribution to Canada’s GDP
1 in 10,000 Molecules that progress from the very earliest stages of research to an approved medicine
10-15 years EU investment stock in Canada in 2011
Source: Canada’s Research-based Pharmaceutical Companies (Rx&D)