Generic Pharmaceutical Industry Reaffirms Support for Government of Canada’s Trade Agenda

Toronto, September 17, 2012The following is a statement by Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA), regarding the latest round of negotiations for a Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU), which begin in Ottawa today:

“Canada’s generic pharmaceutical industry is the country’s primary source of pharmaceutical manufacturing and exports, and employs more than 12,000 Canadians in highly skilled research, development, and manufacturing jobs.

With the global demand for our products increasing at a rate of 10 percent each year, the generic pharmaceutical industry appreciates efforts by the Government of Canada to eliminate barriers to trade for Canadian manufacturers. Canadian-made generic pharmaceutical products are currently exported to 115 countries around the globe, and the industry is actively seeking new market opportunities. The generic pharmaceutical industry particularly appreciates the Government of Canada’s increased trade focus on the Asia-Pacific region which represents both new market opportunities and the headquarters of important global competitors.

The EU has tabled three proposals in the CETA negotiations aimed at increasing monopolies for brand-name pharmaceuticals. Provincial governments and private insurers do not support these proposals as they are concerned about the 3.5 year delay in the availability of cost-saving generic pharmaceuticals that would result, at an estimated cost of $2.8 billion annually to Canadians.

These EU proposals are unnecessary and incongruent with the Canadian system. It is a fact that Canada is currently home to one of the strongest intellectual property regimes for pharmaceuticals in the world. It is also a fact that Canada and the EU have fundamentally different structures for the protection of pharmaceutical patents.

For example, Canada subjects a generic manufacturer seeking to bring a new generic product to market to an automatic injunction that blocks Health Canada regulatory approval without any upfront evidence provided by the brand-name company. This system is known as patent linkage. Generic companies have won more than 70 percent of decided cases since the system was first put in place in 1993.

Such a patent linkage system is illegal under EU competition laws due to concerns about the adverse effect such a system would have on health-care costs in the European Union.

While the overall CETA negotiations are about enhancing trade opportunities for businesses, these specific EU proposals are not. These EU proposals are protectionist, and represent an effort to erect new trade barriers for Canadian manufacturers. These EU proposals are nothing more than an attempt at a cash grab on the backs of hard-working Canadians, cash-strapped provinces and Canada’s life sciences sector.

Further delays in the ability of Canadian generic companies to develop and manufacture products for the United States and other global markets would negatively impact the industry’s ability to attract new R&D and manufacturing mandates to Canada. Reduced investment would lead to job losses for generic pharmaceutical manufacturers, and a significant reduction in business for Canadian Contract Research Organizations (CROs).

Claims that further increasing Canada’s high intellectual property standards for pharmaceuticals would lead to more domestic R&D ignore the realities of global R&D investments by the brand-name pharmaceutical industry, which are typically done near corporate headquarters in the EU or in emerging markets that are not renowned for their intellectual property protection.

No proven link exists between increased IP and increased Canadian R&D investments by brand-name pharmaceutical companies. In Canada, market monopolies for brand-name drug companies have increased eight times since 1987, yet investments continue to decline, with R&D spending in Canada by brand-name drug companies at its lowest level since 1988.

A successful conclusion to the CETA negotiations can and must be achieved without the extension of market monopolies for brand-name drug companies. CGPA remains committed to working with the Government of Canada in its efforts to conclude a CETA with the European Union that is in the best interests of Canadians.”

For more information, please contact:

Jeff Connell
Vice President, Corporate Affairs
Canadian Generic Pharmaceutical Association (CGPA)
Tel: (416) 223-2333
Mobile: (647) 274-3379