How will recent trade agreements that extend market protections for brand-name prescription pharmaceuticals impact expenditures and generic access in Canada?

Reed F. Beall, Lorian Hardcastle, Fiona Clement and Aidan Hollis

Health Policy, 2019, vol. 123, issue 12, 1251-1258

Abstract: Canada recently entered into two multinational trade agreements (i.e., the Canada, United States, and Mexico Trade Agreement; and the Comprehensive Economic and Trade Agreement with the European Union). The resulting federal policy changes will prolong periods of market protection afforded to eligible brand-name prescription drugs by extending competition-blocking patent and data exclusivity terms. While previous studies have analysed these two policy changes in isolation, it remains unknown what the total combined impact will be in a typical year. Our objective was to design an analytic approach that can assess more than one change to a country’s market protections and then to apply this methodology to the Canadian context. We find that the collective impact of these policy changes will be to extend the regulatory protection period for new drugs from an average of 10.0 years to 11.1 years. Depending upon the model’s assumptions and all contingencies considered, an 11% increase equated to an average of $410 million annually (with a minimum estimate of $40 million and a maximum of $1.4 billion). Despite this uncertainty reflected in the range of possible financial impacts, we conclude that such methodological approaches could be useful for rapidly evaluating potential policy changes prior to adoption, which may further assist in budget planning to mitigate increased cost to the downstream health authorities most impacted by these trade concessions.

Keywords: Pharmaceutical policy; Globalization and health; Health care reform; Drug pricing; Health spending; International trade; Patents; Data exclusivities; Health law (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:hepoli:v:123:y:2019:i:12:p:1251-1258

DOI: 10.1016/j.healthpol.2019.09.005

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