New Data Shows Brand-Name Drug Companies Breaking R&D Commitment to Canadians
Toronto, June 27, 2012 – New data on research and development spending in Canada by brand-name drug companies provides further proof that there is no link between longer market monopolies and increased investments. Demands for even longer monopolies in Canada must be rejected, Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA) said today.
The latest annual report from the federal government’s Patented Medicine Prices Review Board (PMPRB) shows that in 2011, member companies of Canada’s Research-Based Pharmaceutical Companies (Rx&D) spent only 6.7 percent of their Canadian revenues on research and development in Canada. This marks the ninth consecutive year that Rx&D member companies have broken their promise to spend at least 10 percent of their domestic sales on research and development.
The PMPRB also reports that total research and development expenditures by member companies of Rx&D were lower in 2011 than in any year since 2000. Over the same period (2000-2011), sales revenues by Rx&D members increased dramatically from $7.7-billion to $13.5-billion. Total research and development spending by Rx&D members in 2011 declined by 9.9 percent from 2010.
The PMPRB’s findings are highlighted in a new report released today by CGPA. Copies of
"No proven link exists between increased intellectual property protection and increased Canadian R&D investments by brand-name pharmaceutical companies,” said Keon. “In Canada, market monopolies for brand-name drug companies have increased eight times since 1987, yet investments continue to decline, with R&D spending in Canada by brand-name drug companies at its lowest level since 1988."
Canada and the European Union (EU) are currently negotiating a comprehensive economic and trade agreement (CETA), which the federal government hopes to conclude by the end of 2012. As part of these negotiations, the EU has tabled proposals on behalf of brand-name drug companies that would considerably lengthen the period of market exclusivity for brand-name drugs in Canada.
A report by two of Canada’s leading pharmaceutical policy researchers estimates that the adoption of the EU’s drug patent system proposals would lengthen periods of market monopoly for brand-name drugs by an average of 3.5 years and add approximately $2.8-billion annually to Canadians’ prescription drug bill.
Keon said that, as global players, Canada’s generic pharmaceutical industry is a strong advocate for enhanced trade, and supports efforts by the Government of Canada to reduce barriers to trade. Fully 40 percent of the Canadian production of generic prescription drugs is for export to more than 115 countries. Raw materials and other inputs are sourced on the international market.
"These specific EU proposals are nothing more than an attempt at a cash grab on the backs of hard-working Canadians,” said Keon. “Extending market monopolies for brand-name drugs will not reduce trade barriers. It will, however, increase revenues for European-based drug companies at the expense of Canada’s health-care system. It will also increase trade barriers for Canadian generic pharmaceutical manufacturers."
Keon pointed out that Canada’s current intellectual property regime for pharmaceuticals exceeds our international treaty obligations and provides greater protections to brand-name drug companies than those afforded any other industry in Canada.
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