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Making a Killing: the Drug Industry & the Cost of the Newest Trade Deal

Posted: October 29, 2015

(October 29, 2015)

By Natalie Mehra, Executive Director, OHC

One in twelve Ontarians aged 55 and up skipped filling a prescription for medicine because of cost last year, reported Ontario’s Health Quality Council earlier this month.

This shocking figure reflects the high cost of drugs; highest here in Canada of any developed nation except the U.S.

In fact, the cost of medications is one of the fastest growing health costs across the country, and it is a huge burden to provincial public drug coverage plans where they exist, for employers who provide drug coverage as a benefit to employees, and for families and individuals who need medicines.

Most of these costs are paid out-of-pocket by individuals and families or through private insurance plans. According to the Health Quality Council, compared to countries around the world, Ontarians have a much smaller proportion of their drug costs covered through publicly-funded plans like the Ontario Drug Benefit Program than elsewhere.

So what is going on? Why are drug costs so high here, compared to European countries? What can be done to lower costs and improve access to needed medications for Canadians?

Now is the time to ask these questions, because the experts are warning that under the so-called trade deal negotiated by Stephen Harper’s government called TPP or Trans-Pacific Partnership, Canadian drug prices are going to be higher.  The Canadian Centre for Policy Alternatives warns that the increased costs will amount to more than $850 million per year.

In truth, the TPP is more about limiting the power of sovereign governments to regulate and control corporations than it is about trade. This is certainly the case when it comes to the TPP scheme and the pharmaceutical industry.

The text of the trade deal, posted on WikiLeaks, shows that our government’s ability to control drug prices or create a public drug coverage plan will be severely, if not fatally, reduced  if this trade deal is signed as it is currently drafted.

Not only will Canada be impacted, but the sick in the poorest areas of the world will also be afflicted. Humanitarian organizations like Doctors Without Borders warn that the TPP “will go down in history as the worst trade agreement for access to medicines in developing countries”.

Our federal government bears responsibility for regulations regarding drug costs and the price of medications. As we head into a federal election, we should be insisting, at the very least, that drug regulations and our public health care system be dropped from trade deals.

Health care advocates have been working for years to bring in a public drug plan for all Canadians. Like Public Medicare, it would provide free access to needed medications for everyone. It would help to complete the fundamental goal of public health care: to remove the barrier of cost from the sick and dying; to forge a compassionate society, and provide care for all based on need not wealth.

Incredibly, through the powers of bulk-buying and regulation, a public non-profit drug program would not only ease hardship for the ill, it would also save money. In fact, the country’s foremost experts on the pharmaceutical industry at Carleton University calculate that a public drug program could save almost $11 billion and cover all Canadians.

Leading into the federal election, some of the political parties promised action. The NDP announced plans for some form of a public drug plan and work to make drugs more affordable. The Liberals propose to work towards lowering the cost of drugs and making unspecified improvements to access to drugs.

These promises, if fulfilled, could be a big step forward. A new public drug program would be the first major social program in decades. It will save Canadians thousands – or hundreds of thousands – when they are ill and dying. It will help alleviate poverty for seniors. For the majority of Canadians it is worth far more than any tax cut promised by any level of government.

All this is at real risk because of the new trade deal, which, in reality is more about limiting governments’ ability to regulate private industries than it is about trade. And it will tie the hands of current and future governments in Canada, prohibiting them from regulating the pharmaceutical industry and reforming drug patent laws and other measures that are keeping prices so high in Canada.

We need to ensure that our new federal government does not fall prey to the drug industry lobbyists that will be pushing as hard as they can to get the trade deal signed as is. Now, would be a good time to contact your local MPP and tell them that you want drugs and health care kept out of the trade deal – TPP or Trans-Pacific Partnership – and any other so-called “trade” deals.