Trade and Economic Benefits of Enhanced Intellectual Property Protection for Pharmaceuticals in Canada

Canada is in the midst of negotiations over the Comprehensive Economic and Trade Agreement (CETA) with the European Union, and the multi-country Trans-Pacific Partnership (TPP). A key issue to be settled in these negotiations is intellectual property (IP) protection for pharmaceutical innovation. Canada faces pressure to enhance IP protection so that it more closely aligns with protection that prevails in Europe and the United States, among other nations.

The pressure for Canada to enhance IP protection comes on three fronts. The first is patent term restoration (that is, restoring patent time lost to mandatory regulatory delays). The second is on a right of appeal for patent holders (in other words, allowing patent holders in Canada the right to appeal court rulings that invalidate their patent). And the third is extended data exclusivity, the time during which generic manufacturers are not permitted to use innovator data for drug approvals.

A central question for Canada in these negotiations is whether the increased cost of medicines that would result from enhanced IP protection are outweighed by potential economic benefits, such as additional economic activity in the innovative pharmaceutical sector in Canada and those generated by free trade agreements. The two essays in this series seek to answer that question by examining potential gains from trade as well as additional economic benefits that would result from stronger intellectual property protection in Canada.