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Canada-EU Comprehensive Economic and Trade Agreement and Health Care Scott Sinclair, Canadian Centre for Policy Alternatives October 30, 2012 CETA and health care “Very high level of ambition;” “more farreaching than NAFTA” Affects many matters only marginally related to trade, including health care Potential impacts on drug costs, health care exemptions, and purchasing by health care entities. Negotiating timelines Last full negotiating session, Oct 15-26 Unresolved issues to be referred to political level Cdn trade and ag ministers travel to Brussels in late Nov? Final package by Nov 29? Intellectual property (pharmaceuticals) First bilateral FTA since the NAFTA to have an intellectual property rights chapter Under WTO rules patent holders now have 20 years of monopoly protection The EU wants to extend these patent terms for brand-name drugs EU demands on drug patents “Patent term restoration" mechanism Longer terms of data protection and exclusivity New rights of appeal for patent holders Such measures would further reduce the availability of generic drugs, driving costs higher Patent term extension Most important, and costly, European demand Grootendorst and Hollis study, $811 million for each additional year of monopoly protection Faster approval times lead to safety problems Brand-name industry and government claims Myth that CETA will increase drug costs (DFAIT) Brand-name companies argue that increased costs will spur research and innovation Consistently failed to meet R&D targets Many new drugs have limited therapeutic value (me-too drugs) Federal government research confirms higher costs Option 1. EU proposal 2. Regulatory review period 3. Regulatory delay Extra time Extra cost, Extra cost, low estimate high estimate 2.66 years 1.23 years 18 days $795 million $1.95 billion $367 million $903 million $15.7 million $36.2 million Summary Increased drug costs Increased safety risks Floor for further concessions in future agreements Serious blow to an already overburdened health care system Canada-EU Comprehensive Economic and Trade Agreement and Health Care Scott Sinclair, Canadian Centre for Policy Alternatives For further information: www.policyalternatives.ca Access to sub-federal government procurement High EU priority. They want deep commitments. Seeking sweeping coverage especially at the provincial, crown corporation, municipal and broader public sector levels. Explicitly targeting local benefit provisions (renewable energy & urban transit) “Offsets” are prohibited Offsets are “any condition or undertaking that encourages local development such as the use of domestic content, the licensing of technology, investment, counter trade and similar action or requirement” Thresholds and tendering rules $300,000 for goods and services, $8 million for construction and “concessions” Prescriptive tendering rules Single electronic gateway Supplier can bring complaint to an administrative tribunal Investor could bring claim to investorstate arbitration Main concerns for health entities Purchasing of health care services per se excluded, but other purchasing covered Loss of flexibility to purchase locally (e.g. local food purchasing) Increased administrative costs (electronic tendering and inflexible tendering procedures) Increased litigation risks Canada-EU Comprehensive Economic and Trade Agreement and Health Care Scott Sinclair, Canadian Centre for Policy Alternatives For further information: www.policyalternatives.ca