Patent restoration and the cost of pharmaceuticals

Get the report
Patent Restoration and the Cost of Pharmaceuticals.pdf

Summary
With the signing of the free trade agreement with Europe (CETA), Canada extended market exclusivity by up to two years for some patented medicines. This report analyzes the increased annual costs for Canadians from that change. If the extended protection had been in place in 2015, and applied to “innovative” drugs available at that time, the additional annual cost would have been $392 million. The cost rises to roughly half a billion dollars when including drugs that were likely to have been eligible, but are not covered in the database used for this analysis. For provinces, their public plans would have had to pay an additional $214 million annually – which would have had a fiscal impact for the federal government.

Projection of future costs is difficult since only new drugs that became available after September 2017, will be eligible for the change. Nonetheless, given trend historical increases in drug costs for new medicines, the annual cost of the change is most likely to increase – accumulating over time.

2 May 2017

The Canada-EU Comprehensive Economic and Trade Agreement - A Prospective Analysis

PBO looks at the projected impact on Canada of the Comprehensive Economic and Trade Agreement (CETA). Though the agreement is extensive, its impact in aggregate on the Canadian economy is likely to be small in comparison to NAFTA. Nonetheless, for individual sectors the impact could be significant since there are quite a few sectors whose goods currently have tariffs that exceed 10 per cent.

Canada’s trade in services with the European Union will also be affected as a number of non-tariff trade impediments are reduced. Since they are starting from a low level, the dollar change in trade would be relatively small. But as a proportion of existing trade, the change could be notable.

Canada will also extend market exclusivity on existing drugs by about 2 years. This will prevent the entry of cheaper generics into the market, and prolong a stream of royalty and dividend payments to entities outside Canada. It will thus also have a small impact on Canada’s external balance.
28 September 2017

Federal Cost of a National Pharmacare Program

This paper estimates the cost to the federal government of implementing this particular framework for Pharmacare.

Figure 1-3 updated 2017-11-07