An international trade ruling telling Canada to change its patent regime could cost Canadians $200-million in extra prescription fees, the Canadian Drug Manufacturers Association says.
"This ruling is detrimental to Canadians on many fronts," said Jim Keon, president of the association that represents generic drug companies in Canada. "Not only will consumers be required to pay more for longer, but provincial governments that finance the drug benefits for seniors and those on social assistance will forgo significant cost savings."
Last week, the World Trade Organization in an interim ruling told Canada that patents issued before 1989 were not long enough, according to international rules for intellectual property. Many of those patents are only for 17 years, but international rules to which Canada has agreed say patents must be for at least 20 years.
A final ruling will be issued in a few weeks and will not be made public until a month later. After that, Canada can appeal, and usually does every time it loses a WTO decision.
Federal officials say they're still mulling over the interim ruling to gauge its effects and see whether there are grounds for an appeal. Officials say the ruling will affect about 40 per cent of the 170,000 outstanding pre-1989 patents, but they have not finished crunching numbers to determine which industries will see the most change because of the ruling.
According to the Canadian Drug Manufacturers Association, however, the pharmaceutical industry will be hit hard. The association says that about 25 brand-name drugs could see their patents extended, preventing cheaper generic drugs from coming to market soon.
The delays will cost a total of $200-million extra in prescription fees, the association says.
In particular, the association says the ruling will keep prices high for Pravachol, a cholesterol-lowering drug made by multinational Bristol-Myers Squibb -- the company that lobbied hard for the United States to take on the WTO case against Canada.
A generic equivalent of Pravachol would cost 30-per-cent less, and generic companies had expected to enter the Canadian market in July when the patent on Pravachol expires. But if the ruling against Canada stands, the generics may have to wait for many months, Mr. Keon said.
He says an 11-month patent extension for Pravachol is worth an extra $110-million in sales to Bristol-Myers Squibb.
The Canadian Labour Congress joined the generic drug companies in asking Ottawa to appeal the WTO decision.
"The WTO is infringing on Canadian sovereignty and allowing multinational pharmaceutical corporations to take control away from Canadians and their governments," said Ken Georgetti, the president of the labour congress. "This interim ruling should be appealed and fought because if it stands, pharmaceutical corporations will reap windfall profits at the expense of public-health systems and individual citizens."
The generic drug industry is mainly Canadian-owned while the brand-name drug industry in Canada is controlled by multinationals.
The association representing the brand-name industry said this week that the interim ruling would probably only affect patents for two or three drugs on the market.
The Canadian Chamber of Commerce, however, says the ruling has broad implications since it shows the world that Canada does not take its international obligations on intellectual property seriously.
"Canada should never have signed on to it if it didn't intend to live up to its commitments," chamber spokesman Howard Kaufman said.