Why it is worth keeping an eye on pharmaceuticals in NAFTA talks

Canada's trade negotiators reportedly pushed back on a single bullet point about the new trade deal between the U.S. and Mexico that a health policy expert says could boost prescription drug costs for Canadian patients.

U.S. has pushed for stronger protections on biologic drugs, which could raise costs in Canada

The U.S.-Mexico free trade agreement requires at least 10 years of data protection for biologic drugs. Canada currently gives eight years. (Fresenius SE & Co. KGaA/Associated Press)

Canada's trade negotiators reportedly pushed back on a single bullet point about the new trade deal between the U.S. and Mexico that a health policy expert says could boost prescription drug costs for Canadian patients.

The U.S. trade representative's fact sheet on the new deal that was revealed Monday says it will "require at least 10 years of data protection for biologic drugs."

Currently in Canada, biologics are protected from competition from follow-on or generic-like products for eight years.

Increasing the protection to 10 years "is a big thing that will have an important impact on drug cost in Canada, especially in the context when we're discussing the implementation of a national pharmacare system in Canada," according to Marc-André​ Gagnon, a pharmaceutical policy researcher at Carleton University in Ottawa who has researched data protection in trade agreements. 

Biologics are drugs such as antibodies derived from living organisms. Remicade — used to reduce inflammation in Crohn's disease, rheumatoid arthritis and other illnesses — is an example. 

Marc-Andre Gagnon wants Canadian negotiators to require greater R&D from drug companies under NAFTA. (Marc-André Gagnon/Evidence Network)

"Contrary to all other countries the most-sold drug in Canada is Remicade," said Gagnon.

"The third most-sold is Humira," another biologic used to treat forms of arthritis, Crohn's and ulcerative colitis.

In 2017, seven of the top 10 medicines contributing to growth in patented drug sales in Canada were biologics, according to the Patented Medicine Prices Review Board's annual report released last week. 

When U.S. President Donald Trump released his blueprint to lower drug prices in May, he said "excessively high drug prices, foreign freeloading, and a system rigged to reward list price increases, are burdening the American people."

The U.S. previously pushed for stronger protections on biologics under the defunct Trans Pacific Partnership, such as matching the 12 years of exclusivity for biologics that companies receive in the U.S. As the Cato Institute noted, intellectual property protection has powerful industries behind it and strong advocates in Congress. 

But Gagnon said under Trump, the U.S. government's proximity with Big Pharma has increased — for instance, with the appointment of a former pharmaceutical executive as secretary of health — without solving the problem of high drug costs in that country.

Increased intellectual property protection increases drug costs but not drug prices, he added. 

Gagnon said Canadian negotiators should demand conditions such as greater R&D-to-sales investments by drug companies in Canada before considering greater intellectual property protections for pharmaceuticals.

The exact details of the U.S. and Mexico agreement are not publicly available.

With files from CBC's Amina Zafar and Reuters