An extension of drug patent protections in the Canada-EU free trade deal could end up costing Canadians an estimated $392 million a year, and federal coffers up to $270 million more annually, says a new report from the Parliamentary Budget Officer.
The report released Thursday puts a price tag on a central — and controversial — element of the Comprehensive Economic and Trade Agreement (CETA) that went into effect in September 2017.
Federal legislation that enacted the deal added two years to the existing 20-year patent protections for drugs containing new medicinal ingredients, which accounted for about one-third of all patented drugs sold in 2015. As a result, drug companies now enjoy a 22-year period of market exclusivity for eligible drugs before cheaper, generic versions can be produced and sold.
Canadians spent $15.2 billion on patented drugs in 2015, says the review board responsible for monitoring patented drug prices. In the interim, the cost of pharmaceuticals will only continue to go up concludes the report that was compiled for the federal government in Ottawa.
The estimated figures — based on 2015 data — are meant to provide an “illustrative analysis” to study the potential impact of the two-year extension, the report states. None of the drugs on the market were eligible for the extension when it was granted last year.
The Parliamentary Budget Officer’s cost figures don’t include the spending that would come from institutions such as hospitals and long-term care facilities, which would cause the estimates to rise significantly — to more than $500 million a year in the case of consumers.
Most of the additional government expense would go toward provincial public drug programs, the report says. Those costs, estimated at around $214 million a year, are borne by Ottawa under a commitment the former Conservative government made with the provinces in 2013.
