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Canada-EU trade deal will increase drug costs for Canadians

Brand-name pharmaceuticals could lead to skyrocketing health care bills


 

A new trade deal between Canada and the EU could add about $2.8-billion in annual costs to Canadian drug plans, according to a report commissioned by the Canadian Generic Pharmaceutical Association. The EU has asked for significant changes to patent laws for generic drugs, which regulate the amount of time before a generic drug company can reproduce a patented brand name drug. Patented drugs are generally more expensive than their generic counterparts. The changes include extending patent protection by up to 5 years, lengthening data exclusivity, and strengthening notice of compliance regulations. Aiden Hollis, professor of economics at the University of Calgary and the co-author of the report, said “the reasonable inference is that these changes are designed to allow innovating pharmaceutical firms to charge monopoly prices for a longer period.” Brand name drugs manufactured in the EU are a leading export to Canada, with $5.3-billion in pharmaceutical products imported by Canada from the EU in 2009.

The Globe and Mail


 
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Canada-EU trade deal will increase drug costs for Canadians

  1. Just how many drugs do we need?

  2. Just how many drugs do we need?

    • If you ever get a health problem that requires medication you will find out.

      • What Jan, no cries of foul at the EU – like you levelled at the US yesterday over their demands that we strengthen our border. You are okay with this "price" of doing trade business? …even though they are not nearly as good a customer as the US is? Gee, a wonder if this is what Emily meant when she said SELL ELSEWHERE.

        • I already told you about our trade talks with the EU

          • Yes you did. You didn't mention that the deal we made was not a very good one for Canadian consumers.

          • I'll walk you through it.

            1) There is no deal as yet. It's still in the talking stages

            2) No one knows what's in it…including the guy in the article

            3) A trade deal is a massive undertaking involving hundreds of fields. We'll like some of them, and won't like others. Europeans will feel the same.

  3. If you ever get a health problem that requires medication you will find out.

  4. Imagine that, another example of globalism and free trade making everyone's life better…….isn't that what they've been telling us for the last 25 years? When the hell will people wake up and see it for what it is – a license for multinationals to print money.

  5. Imagine that, another example of globalism and free trade making everyone's life better…….isn't that what they've been telling us for the last 25 years? When the hell will people wake up and see it for what it is – a license for multinationals to print money.

  6. I never understand why free trade agreements have to be so complex and rife with protectionism when really they could be done in a single sentence:

    No product will have any duties, taxes, or requirements imposed on it that are not also imposed on similar products domestically produced.

    But what about subsidies, etc? What about them? If a country chooses to spend its tax resources on supporting its products, that's that countries business. If you feel it gives them an unfair advantage, then expend your own tax resources similarly.

  7. I never understand why free trade agreements have to be so complex and rife with protectionism when really they could be done in a single sentence:

    No product will have any duties, taxes, or requirements imposed on it that are not also imposed on similar products domestically produced.

    But what about subsidies, etc? What about them? If a country chooses to spend its tax resources on supporting its products, that's that countries business. If you feel it gives them an unfair advantage, then expend your own tax resources similarly.

    • 1. Politics
      Free trade has many winners (industries in which one's country has a comparative advantage and consumers), but also has some losers. The losers of free trade agreements are usually concentrated and small in number, helping them mobilize against free trade more easily (whereas the winners are many and diffuse, and tend to do a poor job of organizing). Efforts to protect some politically sensitive industries, or at least grant them some breathing space (eg. the multifiber agreement on textiles) aid the political viability of agreements.

      2. Subsidies
      The problem is that subsidies have the same distortionary effects as tariffs – ie. they prevent a country from producing the basket of goods that its comparative advantage dictates. Subsidies cancel out the benefits of a free trade agreement. Moreover, if people take your advice and engage in a subsidy warfare, it means throwing additional dollars down a zero sum rathole (which many will do, in part because of reason 1 – there may be industries that benefit).

      • I see no reason to believe that free has done much to reduce subsidies, either in the US or Canada. What it has done is greatly reduce costs to manufacturers and help produce a booming consumer market, arguably to the detriment of large sectors of our economy. There have been new jobs that pay well but for a considerably smaller segment of ordinary working class Canadians then previously. I'd be a whole lot more impressed if we had all benefited at least somewhat equitably.

      • While I agree on the first point, as to why it doesn't get done, I disagree on the second.

        Subsidies are no more distortionary than any comparative advantage. If a nation values it's haberdashery industry, for instance, and decides to support it, how is that any more trade distorting than if the nation happens to have a strong tradition in haberdashery with skilled techniques being passed between generations that lets them make them cheaper than others?

        The difference lays in that subsidies are nation neutral. Tariffs, however, are not, because there's always at least one nation which doesn't have to pay the tariff.

        The other part I dislike is that your argument reduces people merely to economic units, without considering that they are more than that. You can't have subsidy warfare without the people in each nation implicitly agreeing to it by supporting the governments using their tax dollars for the subsidy rather than other things. If we, as a nation, want to prioritize that everybody on earth should have access to a fine hat, and we're willing to use our tax dollars to make that choice by paying our haberdashers so that they can basically give their hats away, that is our choice, and if we're willing to pay for it, I'm not sure why another nation should be able to tell us that we can't.

        By contrast, a tariff is making the other nation pay for our decision.

        • "By contrast, a tariff is making the other nation pay for our decision. "

          Nobody has to buy "our" goods.

          • Of course they don't have to. But if they do, then instead of the full profit for the price coming to us, some of what should rightfully be our gain gets siphoned off instead to their government. Ergo the nation supplying the goods has to pay for the decision of the nation purchasing them.

      • The social costs of free trade…small towns now without industries because they have moved towards cheaper labour…are conspicuously absent from the above points mentioned. It's all a nice clean antiseptic theory until you lose your job, your house, your family. My town lost 3 of 4 factories, all gone south or to Asia. You can suck on your free trade benefits as far as I'm concerned.

        • Globalization, by definition, means change.

          You either ride the wave of change, or you go under.

          • You mean you sacrifice the weakest in order to benefit the strongest, or best monied. You define globalization as a 'take it or leave it' proposition, whereas I see it as a much more broad debate where social considerations must be taken into account.

        • And this is the problem with the type of free trade we see generally negotiated, where companies can sue for the removal of various restrictions and legislation that a society has put in. Thus we have a race to the bottom.

          What if instead we negotiated free trade deals with the understanding that, because companies at home will naturally resist more restrictions being put in, those that the society does put in are probably there for some sort of reason, as they've already had to overcome reisistance. Thus, companies should be able to sue other countries for not being stringent enough.

          Why have a race to the bottom when this simple shift could give us a race to the top.. with companies trying to become better stewards of the environment and public safety because doing so can give them a leg-up on their competition.

          It's funny when you look at our society how many things we seem to have gotten exactly backwards.

  8. 1. Politics
    Free trade has many winners (industries in which one's country has a comparative advantage and consumers), but also has some losers. The losers of free trade agreements are usually concentrated and small in number, helping them mobilize against free trade more easily (whereas the winners are many and diffuse, and tend to do a poor job of organizing). Efforts to protect some politically sensitive industries, or at least grant them some breathing space (eg. the multifiber agreement on textiles) aid the political viability of agreements.

    2. Subsidies
    The problem is that subsidies have the same distortionary effects as tariffs – ie. they prevent a country from producing the basket of goods that its comparative advantage dictates. Subsidies cancel out the benefits of a free trade agreement. Moreover, if people take your advice and engage in a subsidy warfare, it means throwing additional dollars down a zero sum rathole (which many will do, in part because of reason 1 – there may be industries that benefit).

  9. What Jan, no cries of foul at the EU – like you levelled at the US yesterday over their demands that we strengthen our border. You are okay with this "price" of doing trade business? …even though they are not nearly as good a customer as the US is? Gee, a wonder if this is what Emily meant when she said SELL ELSEWHERE.

  10. I see no reason to believe that free has done much to reduce subsidies, either in the US or Canada. What it has done is greatly reduce costs to manufacturers and help produce a booming consumer market, arguably to the detriment of large sectors of our economy. There have been new jobs that pay well but for a considerably smaller segment of ordinary working class Canadians then previously. I'd be a whole lot more impressed if we had all benefited at least somewhat equitably.

  11. I already told you about our trade talks with the EU

  12. While I agree on the first point, as to why it doesn't get done, I disagree on the second.

    Subsidies are no more distortionary than any comparative advantage. If a nation values it's haberdashery industry, for instance, and decides to support it, how is that any more trade distorting than if the nation happens to have a strong tradition in haberdashery with skilled techniques being passed between generations that lets them make them cheaper than others?

    The difference lays in that subsidies are nation neutral. Tariffs, however, are not, because there's always at least one nation which doesn't have to pay the tariff.

    The other part I dislike is that your argument reduces people merely to economic units, without considering that they are more than that. You can't have subsidy warfare without the people in each nation implicitly agreeing to it by supporting the governments using their tax dollars for the subsidy rather than other things. If we, as a nation, want to prioritize that everybody on earth should have access to a fine hat, and we're willing to use our tax dollars to make that choice by paying our haberdashers so that they can basically give their hats away, that is our choice, and if we're willing to pay for it, I'm not sure why another nation should be able to tell us that we can't.

    By contrast, a tariff is making the other nation pay for our decision.

  13. "By contrast, a tariff is making the other nation pay for our decision. "

    Nobody has to buy "our" goods.

  14. Of course they don't have to. But if they do, then instead of the full profit for the price coming to us, some of what should rightfully be our gain gets siphoned off instead to their government. Ergo the nation supplying the goods has to pay for the decision of the nation purchasing them.

  15. Yes you did. You didn't mention that the deal we made was not a very good one for Canadian consumers.

  16. I'll walk you through it.

    1) There is no deal as yet. It's still in the talking stages

    2) No one knows what's in it…including the guy in the article

    3) A trade deal is a massive undertaking involving hundreds of fields. We'll like some of them, and won't like others. Europeans will feel the same.

  17. Free Trade is a scam. It only levels the field for corporations, removing any hills they have to go up to gain access to other markets. One day we'll wake up and realize the social costs have been far too high, for every country that signs on. Free Trade was supposed to help raise the standard of living for Mexican workers…the result has been quite the opposite. In fact, thanks to Free Trade, Mexico has become a Feudal Capitalist state…companies make the important rules, and any laws passed that limit their ability to make money are ignored or excused. And if laws are broken, you can bet the night security guard or janitor will be the one who goes to jail. Free Trade promotes corruption.

  18. Free Trade is a scam. It only levels the field for corporations, removing any hills they have to go up to gain access to other markets. One day we'll wake up and realize the social costs have been far too high, for every country that signs on. Free Trade was supposed to help raise the standard of living for Mexican workers…the result has been quite the opposite. In fact, thanks to Free Trade, Mexico has become a Feudal Capitalist state…companies make the important rules, and any laws passed that limit their ability to make money are ignored or excused. And if laws are broken, you can bet the night security guard or janitor will be the one who goes to jail. Free Trade promotes corruption.

  19. The social costs of free trade…small towns now without industries because they have moved towards cheaper labour…are conspicuously absent from the above points mentioned. It's all a nice clean antiseptic theory until you lose your job, your house, your family. My town lost 3 of 4 factories, all gone south or to Asia. You can suck on your free trade benefits as far as I'm concerned.

  20. Globalization, by definition, means change.

    You either ride the wave of change, or you go under.

  21. And this is the problem with the type of free trade we see generally negotiated, where companies can sue for the removal of various restrictions and legislation that a society has put in. Thus we have a race to the bottom.

    What if instead we negotiated free trade deals with the understanding that, because companies at home will naturally resist more restrictions being put in, those that the society does put in are probably there for some sort of reason, as they've already had to overcome reisistance. Thus, companies should be able to sue other countries for not being stringent enough.

    Why have a race to the bottom when this simple shift could give us a race to the top.. with companies trying to become better stewards of the environment and public safety because doing so can give them a leg-up on their competition.

    It's funny when you look at our society how many things we seem to have gotten exactly backwards.

  22. I really do not know why we are trying to fulfill every EU's demand. Can we find better negotiators who know how to negotiate and bargain on behalf of our country instead of focusing on pleasing the other side?

  23. I really do not know why we are trying to fulfill every EU's demand. Can we find better negotiators who know how to negotiate and bargain on behalf of our country instead of focusing on pleasing the other side?

    • This is a negotiation….both groups make demands.

  24. This is a negotiation….both groups make demands.

  25. You mean you sacrifice the weakest in order to benefit the strongest, or best monied. You define globalization as a 'take it or leave it' proposition, whereas I see it as a much more broad debate where social considerations must be taken into account.

  26. hi there

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