The Trans-Pacific Partnership: Implications for Canadian Public Health

BY LENA FAUST

On October 5, 2015, twelve Pacific Rim countries, representing almost 40 percent of the global GDP, reached an agreement on the highly controversial Trans-Pacific Partnership (TPP). Although proponents predict that the TPP will lead to economic growth in its member countries through the increased economic integration of markets in the Asia-Pacific region  and the elimination of tariffs, health policy researchers anticipate that other provisions, such as the extension of patent terms on pharmaceuticals, will have profoundly adverse consequences for health, both in Canada and globally. With the new Liberal majority government being decidedly pro-trade and largely in favour of the TPP, the deal’s implications for Canadian healthcare, especially equitable access to medicines, seem unpromising.

Limiting Access to Biologics and Hindering Health Research

A key concern of health researchers is that  the TPP imposes restrictions on data sharing for biologics. Compared to non-biologics, which consist of chemically synthesized small molecule drugs, these are treatments derived from biological sources and include vaccines, antibodies and antitoxins. The proposed 5-8 year data-sharing restrictions will likely delay the availability of generic forms of these treatments, drive up drug prices, sustain high prices for longer, and render many crucial treatments unaffordable. Moreover, biologics are increasingly becoming the focus of research on the development of more effective treatments for chronic non-communicable diseases such as rheumatoid arthritis and cancer. In Canada therefore, with its high burden of NCDs, tighter controls on biologics would undermine current advances in health research in these areas.  

Closing the Door on Pharmacare 2020?

Much like past trade agreements such as the World Trade Organization’s Agreement on Trade-Related Aspects of International Property Rights (TRIPS), the TPP has direct implications for access to affordable medications, in both developing and developed countries. Article 18.48 of the agreement is of particular concern, as the patent term extensions proposed in it threaten to significantly limit the availability of generic drugs. In Canada specifically, this could significantly undermine efforts towards establishing universal drug coverage. Although Canada prides itself on its publicly-funded single-payer healthcare system, it falls behind other countries that provide adequate coverage for prescription drugs.  While there has been intense lobbying to establish publicly-funded prescription drug coverage (termed “Pharmacare”), the implementation, however, would be difficult under the TPP, as the treaty significantly strengthens the influence of industry and the private sector in the marketing and control of pharmaceuticals, consequently jeopardizing the financial and regulatory feasibility of Pharmacare.

Specifically, the TPP not only extends the length of patent terms, but also gives pharmaceutical companies the authority to demand compensation for long patent processing times. This would significantly increase the influence of the pharmaceutical industry on the healthcare system, and has the potential to become a critical barrier to the adoption of Pharmacare. Moreover, Pharmacare would ideally involve increased monitoring of the safety of marketed drugs and their appropriate prescription, in light of the marketing of drugs that offer little or no therapeutic advantages over existing ones, and in some cases can even be harmful. Alarmingly, the TPP includes a clause stating that signatories “may adopt or maintain procedures that expedite the examination of marketing approval applications.” Expedited approvals could compromise drug safety, and new, highly priced (and not necessarily higher-quality) products could more easily find their way into Canadian markets. Taken together, these provisions mean that if drug reviews are carried out as rigorously as they should be, manufacturers will have the authority to request longer patent terms, keeping affordable generics off the market for longer periods. The TPP therefore jeopardizes Health Canada’s regulatory capabilities, as well as Pharmacare’s proposed future efforts towards stricter regulatory measures and consumer protection.

Most importantly, the higher drug prices resulting from the TPP would make the implementation of Pharmacare financially challenging. It would likely result in a recourse to a hybrid system that covers only certain drugs and treatments, whilst others remain out of reach for those who cannot afford them. These barriers to implementing Pharmacare are particularly concerning in light of Canada’s present failure to secure low drug prices for generics, which could be achieved by concentrating purchasing power in a single payer. Pharmacare’s suggested single-payer system therefore holds the potential to drastically reduce the cost of pharmaceuticals, and is urgently needed considering that Canada’s system of drug coverage is one of the most unsuccessful systems in comparison to those in other OECD countries. Under the TPP however, Pharmacare, and the improvements it offers, are unlikely to become a reality.

The New PM and the Liberal Position: Does Pro-Trade Mean Pro-TPP?

In an official statement on the TPP, Prime Minister Justin Trudeau highlighted the Liberal party’s support for free trade, but emphasized that the terms of the deal will be extensively discussed in parliament in the form of a public debate, creating a platform for informing and involving Canadians in the decision-making process. In comparison, New Democratic Party (NDP) leader Thomas Mulcair voiced unambiguous opposition to the TPP, stating that the deal would cost 20,000 Canadian jobs. With the NDP falling to third, however, its ability to meaningfully oppose the TPP in parliament is weak. Prime Minister Trudeau’s strong emphasis on the pro-trade nature of the Liberal Party and the agreement’s attractive trade advantages, such as reduced tariffs and increased access to global markets suggest a push towards approving the TPP.

Although the Minister of Health, Dr. Jane Philpott has not officially commented on her position regarding the TPP, she has an ambitious agenda for Canadian Healthcare: a renewed federal health accord providing Canada’s provinces with long-term healthcare funding. Moreover, Dr. Philpott has expressed her concerns with the fragmented nature of provincially-regulated healthcare, calling it “a game of Jenga”, and has consequently emphasized the importance of national Pharmacare in improving Canadian healthcare delivery and access. With TPP approval still hanging in the balance, Dr. Philpott’s appointment provides a much-needed voice for Canadian public health in parliament.

The Choice Between Exporter Profits and Public Health:

Regardless of the willingness of the Trudeau cabinet to negotiate a more public welfare-oriented TPP agreement, the question that remains is whether it is practically equipped to do so. The agreement is now a final draft, which has to be signed, and then ratified within two years to come into effect. Theoretically the government could renegotiate all or part of the deal, but it is unlikely that the other 11 countries would agree to reopen negotiations. Moreover, the relevant provisions, including the data-exclusivity terms, are strongly backed by the US. Canada could altogether refuse to implement the TPP, but this seems unlikely given that the government has been staunchly pro-trade and the economic consequences of forgoing participation in a multilateral trade deal, particularly one that includes the US, could be severe.

Negotiations concerning the TPP were far from transparent, and only the final agreement was made public. In its current form, the TPP prioritizes commercial interests over public health, and the protection of profits over the needs of the poor and the ill. We are anxious to see what, if anything, Canada’s 42nd parliament will do to mitigate the threat the TPP poses to Canadian healthcare and universal drug coverage.


 

Lena Faust is a 4th-year undergraduate student in Microbiology, Molecular Genetics and Global Health at the University of Toronto. She is interested in the barriers to addressing infectious diseases in low-resource settings, as well as the global disparities in access to care and the political and economic contexts in which they arise.

Acknowledgements:

The author would like to acknowledge Dr. Joel Lexchin at York University for his suggestions of source material.

IMAGE:TPP rally. Ottawa, Canada, June 10 2014” by SumOfUs. CC 2.0