Canada’s proposed trade pact with the European Union (EU) would add $249 million to B.C.’s health-care costs by extending protection for brand-name drugs from generic competitors in the country by an average of 3.5 years.
New Democratic Party (NDP) leader Adrian Dix told Business in Vancouver January 9 the agreement would prevent Victoria from buying cheaper generic drugs and force B.C. to raise Medical Services Plan (MSP) premiums to pay for more expensive brand-name drugs. He said that, in turn, would raise operating costs for employers, who often pay half of their employees’ premiums.
Dix said Premier Christy Clark should tell Prime Minister Stephen Harper at the January 16 and 17 first ministers’ conference in Victoria that she’s against any extension of protection for branded drugs in B.C. The theme of the conference is health care.
“We shouldn’t sell out public health care in these negotiations. That’s provincial jurisdiction.”
Clark was unable to respond to Business in Vancouver’s request for an interview by press time.
The federal government said early last year that it wanted a trade deal with the EU to be signed by the end of 2011.
According to a Council of the Federation (COF) report, the EU trade deal would pump $12 billion into Canada’s economy.
COF is an eight-year-old intergovernmental body that includes the prime minister and each of Canada’s provincial and territorial leaders.
Dix acknowledged that an EU trade deal could benefit B.C. But he said the EU is trying to protect global pharmaceutical companies such as Germany’s Bayer AG, Switzerland’s F. Hoffmann-La Roche Ltd. and France’s Sanofi SA.
“This is an effort by the EU to improve the position of European drug companies in the Canadian market and for those companies to get more profit out of what they produce already,” Dix said.
Michael Law, an assistant professor at the University of British Columbia’s (UBC) Centre for Health Services and Policy Research, said drug patent regulations are complex.
The level of protection for brand-name drugs that the EU is proposing Canada adopt, however, would result in Canada having tougher branded-drug protection than is required in Europe.
“The EU wants Canada to adopt two new protections for branded drugs, whereas the EU would not be required to adopt a protection for branded drugs that is currently in place in Canada,” he told BIV.
An E&B Data study commissioned by the Canadian Generic Pharmaceutical Association found in October that if the EU’s proposal to extend brand-name-drug protection in Canada by an average of 3.5 years becomes law, it would:
•add $2.8 billion annually to Canada’s prescription drug costs;
•cut generic drug production in Canada by up to 30%; and
•prompt Canadian generic drug manufacturers to produce fewer generic drugs for export.
Governments paid 46% of the $26 billion worth of prescriptions that Canadians filled in 2010. Employers, unions and individuals financed the rest, according to E&B Data.
Any increase to prescription drug costs will therefore increase employer costs.
MSP premiums rose 6% on January 1. It was the third consecutive year that premiums have risen.
Because of a deal struck in July 2010 by former B.C. Health Minister Kevin Falcon with the BC Pharmacy Association and the Canadian Association of Chain Drug Stores, B.C. employers had been expecting a respite from MSP premium hikes.
The deal was set to knock $380 million annually off British Columbians’ generic prescription drug bills.
When the final phase of Falcon’s agreement kicks in later this year, the B.C. government will pay a maximum of 35% of the price of a brand-name drug for a generic drug.
Before the agreement was reached, Victoria was willing to pay up to 65%.
Falcon’s deal was set to save B.C.’s Pharmacare plan $170 million annually while saving unions, employers and people without drug plans $210 million per year. •
