October 12, 2012, Brussels and Toronto – The following is a joint statement by Greg Perry, Director General of the European Generic medicines Association (EGA) and Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA) on the negotiations for a Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada:
“Generic medicines are vital in ensuring access and affordability of essential treatments in both the developed and developing world. The generic pharmaceutical industry is a strong advocate for enhanced trade, and supports efforts by the European Commission and Government of Canada to reduce barriers to trade for value-added manufacturers. The global demand for generic pharmaceutical products is increasing rapidly at a rate of 10 percent each year, and timely access to export markets directly impacts the sustainability and growth of generic industrial investments.
“While generic medicines offer affordability, accessibility and availability, the sustainability and future growth of the European and Canadian generic pharmaceutical industries are currently under threat due to unsustainable domestic pricing systems, increased regulatory costs and export hurdles that make it difficult for our member companies to compete for R&D and production mandates against facilities in less-restrictive jurisdictions.
“The generic pharmaceutical industries of both Canada and Europe are disappointed by the decision of the European Commission to table several intellectual property measures in the CETA negotiations that go beyond the current WTO requirements. These proposals reflect a lack of regard for the strength and internationally competitive nature of Canada’s intellectual property regime for pharmaceuticals. Most concerning is that the proposed measures go far beyond the IP standards that the EU itself adheres to.
“The European Commission proposals also do not respect the will of the European Parliament, which stated in its resolution on CETA adopted on June 8, 2011 that it ‘Considers that the chapter on intellectual property should not negatively affect the production of generic medicines and must respect the TRIPs exceptions for public health;’
“In addition, The European Commission’s requests in CETA related to pharmaceuticals clearly contradict The European Commission DG Trade Pharmaceuticals Fiche (16/12/2011) 1 stating that ‘the EU should also seek to find the correct balance in bilateral and multilateral trade agreements, in order that it does not impose TRIPS+ requirements on countries where this may have an adverse affect on either public health or the ability of the EU to import its own generic medicines.’
“The European Commission proposals would restrict competition in Canada from cost-saving generic drugs through the further extension of market protection mechanisms. Two leading health economists have conservatively estimated that the EU proposals would delay the availability of cost-saving generic medicines in Canada by an average of 3.5 years, at a cost of more than $2.8 billion annually. In these already difficult economic times, affordable access to essential treatments for cancer, diabetes, hyper tension, cholesterol, depression and many other conditions would be severely delayed for Canadian patients if the European Commission proposals were to be adopted.
“The proposals would also be harmful to Canada’s life sciences sector as the generic pharmaceutical industry operates most of Canada’s pharmaceutical manufacturing capacity, and exports to more than 115 developed and developing countries, including several EU-member states. Delays in the ability to research, develop, manufacture and export new generic drugs in Canada would have a negative impact on the global competitiveness of Canadian and European generic manufacturers.
“It is a fact that the intellectual property regimes in the European Union and North America are different but provide similar levels of effective protection. Bringing new generic drugs to Canada is today a costly and risky prospect. The proposals now being considered make a difficult legal system in Canada even worse.
“In North America, pharmaceutical patent litigation occurs before regulatory health and safety approval can be granted to a new generic drug. This system is called patent linkage and provides an originator pharmaceutical company with an automatic injunction that blocks generic competition without any upfront burden of proof. Canada is an international outlier in that the patent linkage system does not close the door on further patent litigation under the Patent Act, and generic drug companies are regularly subjected to subsequent patent infringement actions commenced by originators. Canada also provides a longer minimum guaranteed period of market exclusivity than other countries that have patent linkage systems. The United States has a patent linkage system and guarantees 5 years of market exclusivity for most drugs. Canada guarantees 8 years of market exclusivity, or 8.5 years if paediatric trials are conducted.
“In the European Union, such a patent linkage system is well known to be illegal due to concerns that it would restrict or limit patient access to affordable medicines. Instead, originators are afforded the same legal mechanisms as patent holders in all other industrial sectors. Indeed, the EUs own Pharmaceutical Sector Enquiry clearly identified patent linkage as an unjust barrier to generic market entry and there is now draft legislation to ensure it is eradicated at all possible levels. It is the position of EGA that the EU should not be raising this issue at all in its free trade agreements.
“Originators already enjoy a very attractive and profitable business environment in Canada. A successful conclusion to the CETA negotiations can be achieved without the extension of market monopolies in Canada. Instead, the CETA negotiations provide an excellent opportunity for Canada to reform its patent linkage to eliminate at-risk product launches for new generic drugs, increase business certainty for both generic and originator drug companies, and provide real compensation to generic manufacturers unjustly kept of the market by a system the Supreme Court of Canada has described as ‘draconian’.
“The European and Canadian generic pharmaceutical industries look forward to working with government officials in Europe and Canada to ensure a successful conclusion to the CETA negotiations.”
About the European Generic Medicines Association (EGA)
The EGA is the official representative body of the European generic and biosimilar pharmaceutical industry, which is at the forefront of providing high-quality affordable medicines to millions of Europeans and stimulating competitiveness and innovation in the pharmaceutical sector. Every year generic medicines bring savings of 35 billion to the 27 member states of the European Union. Generic medicines account for 50 percent of dispensed medicines for only 18% of pharmaceutical expenditure.
About the Canadian Generic Pharmaceutical Association (CGPA)
The Canadian Generic Pharmaceutical Association (CGPA) represents Canada’s generic pharmaceutical industry. The industry plays an important role in controlling health-care costs in Canada. Generic drugs are dispensed to more than 60 per cent of all prescriptions but account for only less than 24 percent of the $22-billion Canadians spend annually on prescription medicines.
For more information, please contact:
European Generic medicines Association (EGA)
Industrial Policy & Corporate Responsibility Coordinator
+32 (0)2 533 98 12
Canadian Generic Pharmaceutical Association (CGPA)
Director, Federal Government Relations
+ 1 613 218 8839 (mobile)