Amanda Vyce | CUPE Research
Canada’s recent agreement to join the United States and Mexico in a new trade deal makes CUPE’s call for a national public pharmacare plan more important than ever. That’s because the USMCA makes significant changes to the rules governing biologic medicines.
Biologics are a class of drug made from living cells. There are 17 biologics currently available in Canada and our combined out-of-pocket, public, and private insurance spending on them is over $7 billion annually. Of the 10 drugs we spend the most on per year in Canada, seven are biologics. That’s up from one in 10 a decade ago. This is a concern because biologics are extremely expensive, and companies are developing more of them since they generate large profits.
Biologics aren’t just expensive, they also contribute to growing privatization in our health care system. A network of private infusion clinics delivering biologics has appeared across Canada, and in some cases pharmaceutical companies pay extra fees directly to doctors who deliver biologics infusions in their offices. This is a direct result of our current system of drug coverage, where hospitals must pay for expensive medicines delivered onsite, while the cost of medicines delivered off-site is covered by patients out of pocket, or by the more than 100 public and 100,000 private insurance plans across Canada.
USMCA makes the current system even more expensive by extending data protection on new biologics from eight to 10 years. In Canada, prescription drugs are protected by two types of intellectual property: patents and data protection. Patents give drug manufacturers exclusive rights to produce a new medication for 20 years. Data protection refers to the information companies collect from the clinical trials they conduct on the safety and effectiveness of new drugs. This information is essential to making and selling the drugs.
Patents, but not data protection, can be challenged and overturned in court. This allows much cheaper generic versions of drugs to reach the market more quickly. If the patent on a biologic is overturned in court and the data protection exceeds the patent, the impact of the USMCA’s additional two years of data protection could mean as much as $300 million more per year in prescription costs.
The best way to counteract any increase in drug costs that could result from the USMCA is to have a national public pharmacare plan. A single payer buying drugs for the entire population can leverage significant bargaining power to negotiate lower drug prices, and will counteract the privatization pressures that come from a fractured system of drug coverage and expensive, but effective, biologics.