The 2011 Canada-European Union Comprehensive Economic and Trade Agreement: an economic impact assessment of the EU’s proposed pharmaceutical intellectual property provisions

Canada and the European Union (EU) are currently negotiating a comprehensive economic and trade agreement. This study examines how the proposed EU language in the draft negotiating text would affect the pharmaceutical market in Canada. Our key finding is that the EU proposals will considerably lengthen the period of exclusivity for innovative drugs in Canada, so that Canada would have the most extensive structural protection of innovative drugs of any country in the world. Payers – consumers, businesses, unions, and government insurers – would face substantially higher drug costs as exclusivity is extended on top-selling prescription drugs, with the annual increase in costs likely to be about $2.8 billion per year. The EU proposals would lead to an average extension of pharmaceutical exclusivity likely to be over 2 years. The purpose of exclusivity rights granted to innovators is to create an incentive for research and development investments into new drugs. However, the amount of additional investment in pharmaceutical innovation that would result from the implementation of the EU’s proposed pharmaceutical intellectual property provisions would likely be a small fraction of the additional costs to Canadians.