Pfizer CEO accuses Canada of ‘freeloading’ off of US innovation

Blasting single-payer healthcare systems, the pharma firm head has called for tougher drug patent protections

Pfizer CEO accuses Canada of ‘freeloading’ off of US innovation
Explaining that drug innovation and development is a risky business, Pfizer CEO Ian Read said that Canada and other countries with universal healthcare systems that haggle down drug prices are “freeloading” off of American innovation, according to Huffington Post Canada.

“Canada is cheaper because of (drug) ration(ing) … it freerides off American innovation,” he said recently to the National Press Club in Washington, DC.

To address the issue, Read proposed that tougher free trade negotiations would allow for better industry protections, such as longer patent terms, to rein in governments’ ability to pay less for drugs.

“You need good trade agreements where intellectual property is protected,” he said, noting later that Pfizer, which earns US$53 billion in annual revenue, did not favour the TPP because it was lacking in terms of pharma patent extensions.

Read also suggested that nations with single-payer healthcare systems were choking the medicines market by effectively preventing patient access to the best new medicines. “Say there were 100 new products authorized in the United States. Australia and New Zealand, their population only has access to 30% of them,” he said. “The UK, they have access to 47% of them, normally, two to three years later than the US.”

Canada, unlike many other countries that provide universal health care, does not offer a universal prescription drug benefit.

Read also argued that the pharmaceutical business is inherently costly, citing Boston University data showing that a single new drug requires an average investment of 10-15 years and US$2.6 billion. “Pfizer spends $8 billion a year on research and development… We’re lucky if we produce three (new) drugs a year.”

In effect, he claimed, US patients and insurance companies end up paying higher costs to subsidize the drug spending of other countries. “Without the US market, there would not be the tremendous expansion in the innovative therapies that are available today and will be available in the future,” Read said. “Basically, you're seeing Europe freeriding on American innovation.”

Pfizer has been the subject of numerous controversies involving moves to increase its prices and reduce its tax exposure.

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