Canadian pharmacare faces risk from NAFTA negotiations

A barrier protecting brand-name drugs from generic competition could become considerably higher

Canadian pharmacare faces risk from NAFTA negotiations

The launch of a national consultation on pharmacare, as well as proposed changes to the Patented Medicine Prices Review Board (PMPRB), has been seen as a positive step toward national prescription-drug access for all Canadians. But the progress toward that goal could be severely hampered by North American Free Trade Agreement (NAFTA) renegotiations, according to one policy expert.

“This has to do with something called intellectual property rights (IPRs) … something called data protection,” wrote Joel Lexchin, Professor Emeritus of Health Policy and Management at York University, in a piece for The Conversation. Brand-name drug companies generate information on the safety and effectiveness of their products during clinical trials. That data is their private property and cannot be used by anyone else — even generic companies — for a period of time.

“It would be very costly for generic companies to do the original testing all over again, and it would also be unethical because the results of the trials are already known,” he said. Citing the Canadian Generic Pharmaceutical Association (CGPA), Lexchin said seven of every 10 prescriptions in Canada are filled with generic drugs, but the cost of generics amounts to only 21 cents for every dollar spent on prescription medications.

Patent protections give brand-name drugs more than 12 years of competition-free sales in Canada; data protection, which can outlast patent protections, represents another line of defense against generic rivals. “What’s more, unlike patents, data protection can’t be challenged in the courts,” Lexchin added.

In 2006, the five years of data protection originally offered by Canada was extended to eight years, with a possible extra six months for companies who can prove that children need the drug they are marketing. Lexchin said this was because of lobbying efforts by the pharmaceutical industry.

“Now comes word that in the bilateral United States-Mexico NAFTA talks, there was an agreement that biologics will have 10 years of data exclusivity,” he wrote.

The most recent report from the PMPRB noted that seven of the top 10 patented drugs in Canada based on the amount spent in 2017 were biologics. Those included infliximab, also called Remicade, which costs almost $29,000 annually on average — patients, provincial plans, and private insurers spent nearly $1 billion on it last year — and etanercept, also known as Enbrel, which has an average annual cost of $13,600. Some biologics have a corresponding “subsequent entry biologic (SEB),” essentially a generic counterpart that is substantially less costly.

“If the US pushes Canada to accept the same data protection period that Mexico did, then data protection here goes up by another 1.5 to two years,” Lexchin noted. “If we want a national pharmacare system, then we need to make sure that our negotiators don’t give in to any American demands about medical data protection.”