CETA and pharmaceuticals: impact of the trade agreement between Europe and Canada on the costs of prescription drugs

On a per capita basis, Canadian drug costs are already the second highest in the world after the United States and are among the fastest rising in the Organization for Economic Co-Operation and Development. The Comprehensive Economic and Trade Agreement (CETA) between the European Union (EU) and Canada will further exacerbate the rise in costs by: • Committing Canada to creating a new system of patent term restoration thereby delaying entry of generic medicines by up to two years; • Locking in Canada’s current term of data protection, and creating barriers for future governments wanting to reverse it; • Implementing a new right of appeal under the patent linkage system that will create further delays for the entry of generics. CETA will only affect intellectual property rights in Canada—not the EU. This analysis estimates that CETA’s provisions will increase Canadian drug costs by between 6.2% and 12.9% starting in 2023. The Canadian government committed to compensating provinces for the rise in costs for their public drug plans. Importantly, this means that people paying out-of-pocket for their drugs or receiving them through private insurance, will be charged twice: once through higher drug costs and once more through their federal taxes. As drug costs continue to grow, there are limited options available for provincial/territorial governments: restrict the choice of medicines in public drug plans; transfer costs to patients who typically are either elderly or sick; or take money from other places in the health system, and threaten the viability of Canada’s single payer system. CETA will therefore negatively impact the ability of Canada to offer quality health care.