The use of generic prescription medicines has saved Canada’s healthcare system nearly $26 billion since 2007. But a proposal for longer market monopolies by brand names could put a dent in that savings, according to an analysis of Canadian retail prescription drug sales by the Canadian Generic Pharmaceutical Association (CGPA).
“The data…reinforces that the savings provided by generic prescription medicines are essential to the sustainability of both public and private drug benefits plans in Canada,” said Jim Keon, president of the CGPA.
As part of trade negotiations with Canada—which Ottawa hopes to conclude this year—the EU has proposed longer periods of market monopoly for brand name prescription drugs. A February 2011 report by Aidan Hollis of the economics department at the University of Calgary and Paul Grootendorst from the University of Toronto’s faculty of pharmacy estimates that the EU’s proposals would extend periods of market monopoly by an average of three and a half years, and add approximately $2.8 billion annually to Canada’s prescription drug bill. Of that, approximately $1.3 billion would be borne by provincial governments, with the remaining $1.5 billion coming out of the pockets of patients and employers that sponsor drug plans for their employees.
“Over the past two years, provincial governments have introduced reforms to their drug benefits plans in order to ensure their ongoing sustainability,” said Keon. “The savings achieved through these reforms could be wiped out if the EU’s drug patent extensions are adopted.”
Keon says that extending monopolies for brand name drug companies is not only expensive but also unnecessary. He points to a May 2011 report by Edward M. Iacobucci of the University of Toronto’s faculty of law. The report shows that Canada’s intellectual property system for pharmaceuticals is stronger than other industrial sectors in Canada and is in many ways stronger than pharmaceutical intellectual property in the EU and the U.S.