Transfer Pricing Associates

Canada's Diminishing Protection of Pharmaceuticals Reduces Trade

post Thursday July 11, 2013

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A recent report from a major Canadian think tank contends that the diminishing protection of intellectual property rights in Canada could hinder the shipments and transportation of pharmaceuticals in the country. The report from the Fraser Institute states that Canada’s protection of pharmaceutical intellectual property “falls short of international standards,” and goes on to explain that the lack of protection will negatively affect the country’s pharmaceutical industry in the immediate and long-term future.

In the report from the Fraser Institute the issue of shorter protection periods in Canada is addressed while viewing some of the costs and benefits through the lens of quantitative methods to critically evaluate the effects of national policy on IP protection, specifically in the pharmaceutical industry. The report states that, “Pharmaceutical innovators face shorter effective periods of patent protection in Canada, fewer years of data exclusivity, and an unequal court appeal process compared to the property protections available in the United States and European Union.” Additionally the report claims that, “By strengthening IP protection, Canada has a greater chance of increasing trade, gaining access to foreign markets, and reducing tariffs and trade barriers.” Both of these statements argue that providing more substantial IP security would lead to considerable gains for the North American country.

Dr. Kristin Lybecker compares the costs associated with increasing protection versus the potential gains from increased trade activity with the rest of the world and the benefits of entering into trade agreements that could greatly increase the volume of trade that Canada participates in. Dr. Lybecker claims that the benefits of joining the European Union, Australia, Brunei-Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam in trade agreements would sizably produce fiscal gains for Canada and would outweigh the forecasted increase in pharmaceutical expenditures that would result from increased protection. Her claim is that participating in the Comprehensive Economic and Trade Agreement (CETA) and the Trans-Pacific Partnership Agreement (TPP) would create more gains than the estimated $367 million to $903 million increase in costs.

It is clear from this report that there will continue to be a global push to adequately protect intellectual property and that many more organizations are being forced to recognize the benefits that accompany effective IP law and defense.

Source: Canadian Transportation and Logistics

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