10/21/2012 02:31 EDT

Canada-Europe Free Trade Talks: Drug Patents Need Extending For Us To Compete, Big Pharma Says


OTTAWA — As trade talks with Europe enter the final stretch, Canada's patent drug industry is making a final push to sell their brand of medicine to Canadians.

This week, Canada's Research-Based Pharmaceutical Companies will release three studies in an effort to show they have kept their word on research spending and that, nevertheless, the situation is getting dire.

One report from the KPMG consulting firm, which will almost certainly be contested by critics, suggests spending by the industry in Canada has been underestimated and is at about the 10 per cent level of sales it promised in the 1980s when the government of Brian Mulroney controversially extended patent protection.

Another study estimates there are currently 46,000 jobs connected to the brand-name drug industry and they are among the best paying in the country.

The industry's chief lobbyist Russell Williams says whether the critics believe the findings is irrelevant because even using previous calculations, the story is the same.

Canada has some of the world's best researchers, a modern health system and first-rate facilities, yet only gets about one per cent of the $100 billion spent globally on pharmaceutical research and development. And that number has dropped in the past decade and continues to head south.

"Regardless how you count, we are no longer competitive and if we don't compete, we will continue to decline,'' he said.

He points to what happened after 1986, when investment dollars poured into Canada once the government extended patent protection for drug manufacturers.

Since, other countries have surpassed Canada's protection regime, he says, and the result is a tailing off of spending. The argument is similar to the one Finance Minister Jim Flaherty makes in support of lowering corporate taxes _ reduce the costs for firms and they will invest and create jobs in Canada.

The public relations push dovetails with the last scheduled negotiation session for the Canada-European Union free trade agreement, where patent protection is a key issue. Talks are slated to end this week with the aim of signing a high-level deal by the end of the year.

Europe has made nudging Canada to adopt its standards on pharmaceutical patents and data protection a key demand, which according to a government study would extend the average lifespan of a new drug by 2.66 years.

The confidential internal study from Industry Canada and Health Canada reported by The Canadian Press last week estimates that would cost consumers up to $2 billion a year because it would delay production of cheaper generic drugs.

The Canadian generic drug industry's own financed research estimates the cost would be in the neighbourhood of about $3 billion a year.

The costs would have to be borne by provincial drug plans, employee insurance plans and individuals who buy drugs.

In response to grilling in the Commons, the federal government has mostly tried the square the circle on the drug costs-drug research issue and point out no deal has yet been signed.

"What our government is doing and what we have always sought to do with this agreement is to strike a balance between promoting innovation and job creation and ensuring that Canadians have access to the affordable drugs that they need,'' responded Gerald Keddy, the parliamentary secretary to the trade minister.

But NDP trade critic Don Davies worries that the fact Ottawa would commission a cost analysis near the end of the scheduled negotiations suggests the government is considering giving in to Europe's demands. That would be a mistake, he says, adding that he does not believe a case has been made between the length of patent protection and research dollars.

"They want a unilateral commitment based on a qualified promise there may be more investment,'' he said. ``They've shown they haven't kept their promises in the past.''

Williams disputes it is possible to estimate 10 years into the future the impact of a policy shift _ that's why he says the industry can't say how many additional jobs would be created if patent protection is extended.

But he argues logic dictates that if Canada can't offer drug makers equal or superior conditions to its competitors, the country will lose out not only in jobs, but also in its standing in the life-science field.

"It's tough to get our message out,'' he admits.

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