Proposed changes to Canada's drug patent system put forward by the European Union as part of trade negotiations would add billions annually to Canada's prescription drug plan, a new report says.

Proposals put forward by the European Union could add billions in drug costs in Canada annually, a report released Monday says. (IStock)

The report, commissioned by the Canadian Generic Pharmaceutical Association (CGPA), suggests the changes proposed by the EU would "considerably lengthen" the period of market exclusivity for name-brand drugs and lead to higher costs for consumers, as well as private and public drug plans.

"Payers — consumers, businesses, unions and government insurers — would face substantially higher drug costs as exclusivity is extended on top-selling prescription drugs," says the report released Monday.

The authors — Aidan Hollis of the University of Calgary's Department of Economics and Paul Grootendorst from the University of Toronto's Faculty of Pharmacy — suggest the annual increase in cost is expected to be about $2.8 billion a year.

The report suggests that a "substantial share" of the costs of the EU's proposed changes would fall on government drug plans, which have been struggling to contain soaring prescription-drug costs.

Generic agreement not done deal: minister

The report reflects a failure of leadership on the part of the Conservative government, NDP health critic Megan Leslie said in the House of Commons.

No such EU agreement exists because it is still being negotiated, International Trade Minister Peter Van Loan replied.

"There's no agreement on it yet," Van Loan said. "We can tell you with sound assurance that this government will only enter an agreement that is in Canada's best interests."

The authors said if implemented, the changes would not lead to a substantial increase in investment by brand-name drug companies in Canada.

The report says the amount of additional investment in pharmaceutical innovation that would result from the EU's proposed changes would be "a small fraction of the additional costs to Canada."

They would, however, delay the availability of generics in the Canadian market by about 3½ years, the report said.

Canada's health system could suffer: CGPA head

Jim Keon, president of the CGPA, said pharmaceuticals are one of the EU's top exports to Canada, valued at more than $5 billion annually.

Keon said the proposed changes would not eliminate trade barriers because pharmaceutical products from the EU already have "unfettered access" to the Canadian market.

"These proposals will simply increase profits for brand-name drugs companies at the expense of Canada's health-care system," he said.

The EU is Canada's second-largest export market, after the U.S. The most recent round of negotiations between Canada and the EU took place in Brussels in last month. The next round is expected in Ottawa in April.

Annual incremental costs to provinces and territories under the EU trade-deal provisions:

Province/Territory	Annual Costs (millions of Canadian dollars )
Ontario	1,204.4
Quebec	772.6
British Columbia	249.1
Alberta	211.5
Nova Scotia	95.0
Manitoba	79.8
Saskatchewan	72.3
New Brunswick	52.2
Newfoundland and Labrador	46.4
Prince Edward Island	10.4
Northwest Territories	2.6
Yukon	1.9
Nunavut	1.7

SOURCE: CGPA Report: An Economic Impact Assessment of Proposed Pharmaceutical Intellectual Property Provisions

With files from The Canadian Press