Trump aside, Canada should reject trade deals that put drugs out of reach

By Richard Elliott, Executive Director, and Nicholas Caivano, Policy Analyst, Canadian HIV/AIDS Legal Network

February 1, 2017

Donald Trump has withdrawn the United States from the Trans-Pacific Partnership (TPP) and declared his intention to renegotiate NAFTA. But as some try to revive the TPP, and trade talks between Ottawa and Washington heat up, Canada should walk away from any deal that perpetuates inadequate, inequitable access to life-saving medicines, here or globally.

NAFTA’s rules on patents and other intellectual property were bad enough, paving the way for other trade agreements that keep affordable drugs out of reach, particularly for the world’s poorest, in order to protect pharmaceutical companies’ immense profits. But the TPP is one of the latest, and largest, such deals to make things even worse.

The TPP’s intellectual property rules—advanced by Big Pharma and U.S. negotiators—would further impede market competition from generic drugs, weaken governments’ ability to prevent price-gouging, and create further barriers to national pharmacare. The result: individuals, public health systems and insurance providers would spend more to get needed medicines.

Make no mistake: delaying the entry of lower-cost generics into the market would devastate efforts to make medicines available to as many people as possible. Access to generic antiretroviral drugs has been—and remains—critical to saving millions of people from dying of AIDS, and preventing millions of new HIV infections, around the world.

The TPP also includes super-charged rules on “investor-state dispute settlement.” These allow lawsuits against governments for interfering with companies’ “expectations of profit” by regulating in the public interest. In fact, under NAFTA, Canada is already facing an unprecedented, multi-million-dollar lawsuit by pharmaceutical powerhouse Eli Lilly, after Canadian courts invalidated the company’s patents on two drugs for not meeting long-settled legal standards.

The company’s case rests on tortured legal reasoning attempting to make NAFTA’s “investor protection” chapter apply to intellectual property claims, even though NAFTA doesn’t say this. But the TPP would explicitly open the door to such challenges by pharmaceutical companies.

Canadians already pay some of the highest drug prices in the world (even as pharmaceutical companies’ investments in R&D in Canada have fallen to historic lows). If the TPP were to rise again like a zombie, it would set a terrible global precedent, further expanding pharmaceutical companies’ profits at the expense of not only Canadians facing high drug prices but, even more shamefully, poor people around the globe. Many will suffer and die as a result.

Yet despite our professed commitment to global humanitarianism, Trade Minister François-Philippe Champagne has recently mused that Canada would consider a new TPP-inspired deal, even without U.S. participation, harms be damned.

The Canadian government signed on to the TPP in the first place chiefly out of concern that preferential access to the U.S. under NAFTA would be watered down if we opted out. The United States is our primary trading partner. With it out of the deal, the case for joining is even weaker. Trade with the other TPP member countries is relatively minor and would not justify significant policy concessions.

The question is this: who truly stands to benefit from more restrictive intellectual property privileges in trade deals such as the TPP or, now, a renegotiated NAFTA?

Brand-name pharmaceutical companies, primarily. Not average Canadians. And certainly not the hundreds of millions of vulnerable people worldwide who face even higher drug costs if governments continue the dangerous trend of strengthening medicine monopolies and suppressing market competition.

A few months ago, the UN Secretary-General’s High-Level Panel on Access to Medicines sounded (yet another) alarm on trade deals such as the TPP and recommended a different approach to intellectual property. Among other things, it recommended delinking the costs of researching and developing drugs from their end prices. Experimenting with new models for funding—including a global treaty on health R&D—could generate more innovation on real public health needs for the dollars invested, while avoiding the downstream problem of high prices blocking access. We should heed the Panel’s proposal instead of entrenching a flawed, decades-old system that isn’t getting medicines into the hands of those who need them.

In this new era of uncertainty, with human rights taking a back seat to corporate greed, Canada should defend access to medicines—at home and abroad—at the negotiating table. Will we stand up, or will we concede?

Originally published as an op-ed in The Hill Times on February 1, 2017.

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