As my fellow Huffington Post blogger Paul Hong recently pointed out, the last week of September was a good one for Canada on the trade front. On the heels of signing the Korea-Canada Free Trade Agreement, Prime Minister Harper hosted a summit with the European Union (EU) to mark the publication of the Canada Europe Trade Agreement (CETA) text.
CETA will make Canada one of the only countries in the world to have comprehensive agreements with both the United States and the 28 countries of the EU. NAFTA and CETA added together would open the doors of our relatively small country of 33 million to a market of almost one billion people. What's more, CETA has the potential to give "a $12-billion boost to the Canadian economy and increase bilateral trade by over 20 percent."
As the CETA negotiations have progressed, our community has seen an opportunity to make Canada a more attractive destination for global investment in health research by modernizing our Intellectual Property rules as they pertain to the life sciences.
Globally competitive IP is fundamental to Canada's success. It allows our country to participate in the development of ideas and of new processes and products, and to maximize the benefits for Canada. These include new medicines and vaccines and clinical trials that represent hope in the fight against disease.
Through this agreement, Canada will improve its IP regime in order to approach global standards. The gaps in Canada's IP protections, sometimes caused by judicial decisions as opposed to government policy, have put us at a distinct disadvantage when it comes to attracting a greater share of the $100 billion in life science research and development that is available annually across the globe.
While Canada brings many assets to the table, world-class talent and universities as well as strong healthcare system, we have seen the amount of health research and clinical trials conducted in Canada fall short of our collective objectives over the past few years. The issues are complicated due to the many variables, but weaker IP is clearly part of the challenge. In terms of IP protections, a 2011 Canadian Chamber of Commerce study showed that Canada provides less robust IP protections for the pharmaceutical sector than 31 countries we compete against for this $100 billion pool of research opportunity.
History shows that every new trade agreement brings uncertainty and concern to some. CETA is no different. The European experience itself should provide comfort. Their nations have strong public health systems, better access to innovative medicines and at the same time provide stronger IP safeguards to support innovation.
We should also remember that innovation makes up a relatively small percentage of Canada's total health spend with the Canadian Institute of Health Information (CIHI) estimating it at around 8.5 per cent of the total 2013 healthcare budget. This percentage has been stable the past few years and for 2013, CIHI forecasts spending on prescribed drugs to have grown at a rate of less than 0.1 per cent the lowest rate since 1996. Drug expenditures are expected to remain steady for the next few years. It should be noted that prices for innovative drugs in Canada compare favourably to jurisdictions around the world, and that our governments have many policy measures other than IP to control drug prices.
The Conference Board of Canada recently undertook a comprehensive examination of IP provisions of the proposed CETA agreement. It concluded that CETA will "boost Canada's innovative ecosystem by making the country a more attractive place to make R&D investments." In terms of healthcare, it also concluded that "CETA's IP provisions are likely to improve Canada's health innovation" and "lead to important social and economic value while having minimal negative impacts if any."
While CETA address some important IP issues, there is still more work to be done. For example, a series of judicial cases has resulted in a Canadian test for patent utility that is higher than the bar applied in other developed countries. This case law has resulted in the invalidation of protection on several innovative medicines that are clearly "useful" the standards of non-legal observers: they were approved by Health Canada, made available by Canadian drug plans, and prescribed by our healthcare professionals to Canadian patients. Fortunately, this matter is scheduled to be considered by the Supreme Court of Canada in November, and we sincerely hope that the eventual decision will align Canadian patent law standards with the standards applied by our major trading partners.
CETA still has to be formally approved in the Canadian and European legislatures. While our community is pleased with the proposed IP reforms it contains and looks to the future with much optimism, we strongly urge the governments to move forward with the approval and implementation of the treaty on an expedited basis. Technology is driving great change in healthcare and its research. A modern IP regime will provide a much needed boost to the excellent resources we already have in Canada enabling us to play a greater role on the world stage.