A trade agreement in negotiations between Canada and the EU is drawing the ire of generic drugmakers, provincial governments and patient advocates over proposals to extend drug patents by several years in Canada, a move that critics say would delay the arrival of generic medicines to market in that country and inflate healthcare costs.

According to Canada's Department of Foreign Affairs and International Trade, Canada imports C$8.4 billion ($8.2 billion) of pharmaceutical products from the EU annually, making Canada the fifth largest export market for the continent's drugmakers. The sweeping Comprehensive Economic and Trade Agreement (CETA) could add another $2.8 billion to the annual bill, according to a report by health economists Paul Grootendorst, from the University of Toronto, and Aidan Hollis, from the University of Calgary (J. Generic Med. 8, 81–103, 2011). This cost is largely shouldered by the provincial and territorial governments, which pay for healthcare.

CETA—first proposed in 2009 and subsequently leaked in 2010—calls on Canada to beef up its intellectual property rights for pharmaceuticals. The proposed changes would add five years to patents for drugs that are unduly bogged down in the regulatory approval process, lengthen the period of time clinical trial data is kept off-limits for use by generics companies from eight years to ten years (or even longer in the case of pediatric drugs) and grant brand-name companies an appeal process to challenge generics companies on their patent compliance.

“It would elevate or harmonize the intellectual property standards in Canada to those of the EU, which is at the forefront of life sciences research,” says Declan Hamill, vice president of legal affairs at Rx&D, an Ottawa-based trade group representing brand-name pharmaceutical companies in Canada. “It might change the way the game is played: you give us longer IP [intellectual property], we'll throw some clinical trials your way,” adds Grootendorst.

But critics say that the agreement would largely benefit pharmaceutical companies headquartered in Europe. “We will lose investment and become a rust-bucket kind of industry,” says Jim Keon, president of the Toronto-based Canadian Generic Pharmaceutical Association (CGPA), who charges that the intellectual property revisions might prompt its members, most of which are international companies with manufacturing facilities in Canada, to go elsewhere.

The recent analysis by Grootendorst and Hollis—commissioned by the CGPA—found that the plan would give patented drugs an exclusive spot on the market for 3.5 years more, on average, than they currently hold. A counter-analysis by Canadian intellectual property lawyers disputes this, but Grootendorst and Hollis question its methodology.

The Canadian government hopes to wrap up the agreement by the end of this year, the country's International Trade Minister Ed Fast said at an economic conference in Montreal last month.