OTTAWA – As Canada prepares to sign the Trans-Pacific Partnership (TPP) in New Zealand this week, two new studies from the Canadian Centre for Policy Alternatives (CCPA) reveal significant risks and high public costs to the Canadian health care system within the text of the agreement.
The TPP would require Canada to extend patent terms to compensate brand-name pharmaceutical firms for regulatory delays in approving drugs. This policy change could add $636 million annually to the price of drugs in Canada, according to Joel Lexchin in his study, Involuntary Medication: The Possible Effects of the Trans-Pacific Partnership on the Cost and Regulation of Medicine in Canada.
“Higher drug costs would make pharmacare more costly, and lawsuits from adversely affected drug companies are more likely under TPP’s investor-state dispute settlement mechanism,” says Lexchin, a professor in the School of Health Policy and Management at York University.
The second study, Major Complications: The TPP and Canadian Health Care, by CCPA trade expert Scott Sinclair, finds that the TPP investor protections would make it more difficult and costly for Canadian governments to establish new public health programs, including pharmacare, which is on the agenda of ongoing federal-provincial health talks.
Key findings from both studies include:
- The TPP includes many new rights for U.S. and Japanese drug companies to comment on, review and appeal Canadian regulatory decisions, which could adversely affect drug approvals and safety.
- Faster regulatory approvals of medicines, which might result from the TPP, have been shown to lead to a higher incidence of safety problems, including warnings and withdrawals.
- The TPP’s carve-out for tobacco control measures will not provide meaningful protection for future Canadian plain-packaging rules, since U.S.-based tobacco companies will continue to have access to NAFTA’s investor-state protections.
- Other forms of public health regulation, from controls on trans-fats to regulating legalized marijuana, are fully exposed to lawsuits from disgruntled foreign investors. The TPP expands these rights to cover investors from Japan, Malaysia, Australia and other countries.
- The TPP financial services chapter actually makes it easier for foreign insurers to challenge the expansion of public health insurance into new areas by allowing investor-state disputes involving a much-abused “minimum standards of treatment” rule.
“While a strong and balanced international trade regime is critical to Canada’s economic success it should not, and need not, come at the expense of our public health system,” says Sinclair.
These two reports are the first in a series of detailed analyses of various aspects of the TPP to be released by CCPA in the coming months as the debate over whether Canada should ratify the deal continues.
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