Last week the federal government signalled that, to reach a new trade agreement with Europe, it might extend pharmaceutical patents. The move could cost Canadians up to $2 billion per year. Supporters argue that it will attract research investment and generate jobs.
But longer drug patents will not attract new research to Canada.
Pharmaceutical firms locate research investments on the basis of the quality of local scientists and the cost of running clinical trials. If we want industry to invest in Canada, we need to invest in our capacity to conduct research. One way would be to double the budgets of the Canadian Institutes of Health Research -- which would cost less than extending pharmaceutical patents.
But if Canada must change drug patents to win a trade deal, let's at least fix our broken intellectual property system while we are at it. The patents that apply to other technologies fail the pharmaceutical sector. They fail for a number reasons.
First, most patented medicines must be studied in clinical trials to establish that they are safe and effective enough to be sold to Canadians. This can take years after firms file their initial patents, which reduces the time they can charge monopoly prices (the 'carrot' that patents create to give firms incentive to develop new drugs).
The proposal to give firms a guaranteed period of market exclusivity (i.e., a guaranteed length of monopoly sales) after regulatory approval would not only benefit firms, it would also allow regulators to demand better pre-market drug trials and to take more time to evaluate trial data.
The current rush to approve medicines while manufacturers' "patent clocks" are ticking means that some medicines make it to market that later must be recalled because of harms they cause to patients -- harms that could be detected with more thorough pre-market evaluation.
The second failing of the patent system for pharmaceuticals is that, although disclosure of scientific information is a key benefit of the patent system, the information of greatest value to society is not publicly disclosed when a patent is filed. This is because data about the safety and effectiveness of most medicines is gathered after patents are granted.
Few Canadians realize that pharmaceutical companies can and do keep regulatory data about safety and effectiveness secret. This secrecy should end. And it can be ended by making full public disclosure of regulatory data a condition of extended pharmaceutical patents.
Finally, the patent system fails in the pharmaceutical sector because nobody appears to know when generic competitors can enter the market. This is because pharmaceutical companies often file multiple, overlapping patents on the same drug and use these often-bogus patent claims to block regulatory approval of generics. This generates a lot of income for patent lawyers and consultants but provides no value to society as a whole.
If the International Trade Minister wants to extend drug patents, the Health Minister should use the opportunity to improve our regulatory system too: Provide a clear and unambiguous period of market exclusivity after a drug has met high standards of pre-market regulatory approval; Require that all data considered by that regulatory process be made available to the public; And allow all generic competition as soon as the period of market exclusivity has expired.
Such a system would be a windfall for truly innovative pharmaceutical companies, would dramatically improve regulatory transparency, and would likely mitigate the aggregate cost-impact of conceding pharmaceutical patents as part of our trade negotiations.
But simply granting longer drug patents under the guise of attracting research investment is patent nonsense.