The United States pharmaceutical industry is likely to be the target for Canadian officials should a full out trade war take place between the two North American countries, an Ottawa-based law professor with knowledge about the issue told Yahoo Finance earlier this week.
Amir Attaran, a biomedical scientist and law professor at the University of Ottawa said that the plan would take aim at major U.S. patents, allowing Canadian pharmaceutical companies the right to copy, sell and possibly export American pharmaceutical drugs. “Canadian officials are aware of and studying the proposal in case the United States decides to impose a major retaliation on Canada,” Attaran told Yahoo Canada Finance on Tuesday. “I’m positive it’s being considered.
Attaran believes that if the plan follows through, it would “stun” Wall Street and the White House. However, it would provide momentum for the U.S. pharmaceutical lobby backing Canada’s cause.
Foreign Affairs Minister Chrystia Freeland was in Washington on Wednesday to continue NAFTA negotiations where U.S. officials demanded to have a deal by October 1. With less than two weeks until the end of the month, there is a lot of pressure to create a deal that resolves major issues like the dispute resolution mechanism, cultural protections, and the supply-manages dairy industry.”
The Pharmaceutical Research & Manufacturers of America spent nearly $26 million in 2017, making them the fourth largest lobby group in the U.S. last year, according to the Centre for Responsive Politics.
Attaran said that it would be impossible for the U.S. to ignore a threat made by Canada to suspend U.S. patents within Canada.
“Pharma would be putting in phone calls out to everyone in Congress whom they made campaign donations to. And that is nearly everyone,” said Attaran. “Pharma spends more on lobbying than banking and defence combined, and each of those are a huge lobby.”
According to Yahoo, this would not be the first time that Canada has copied the names of patented U.S. drugs. The Patent Act was amended in 1969 so that pharmaceutical firms could import the necessary ingredients to produce and sell drugs already under patent. There was a royalty fee of only four percent that the Canadian firms were required to pay to the companies in the U.S. who created the drug.
“It’s 100 percent legal,” said Attaran. “The World Trade Organization agreement known as TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) is restrictive of compulsory licensing, but is it not prohibitive.”
But not everyone is as convinced that this plan will have the effect that officials might hope for.
“It’s possible, but only in a theoretical sense,” said Dr. Joel Lexchin to Yahoo Finance. “This would be very contentious. It would trigger probably even more fury from Donald Trump.
Dr. Lexchin is a professor at the University of Toronto and an emergency physician with more than 30 years of experience in pharmaceutical policy. He warned that Canada could put itself at risk and that the U.S. may not even take the threat seriously.
“There would be the question of whether or not the brand name (U.S.) companies would cut the supply of medications to Canada. They might threaten to do that. Generic drug companies won’t be able to take over all the current brand name drugs because ther is the issues of getting access to the active ingredients,” said Lexchin. “I don’t see it being done in Canada. It wouldn’t be worth it.”
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