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Canada Considers Taking On US Pharma In The Event Of A Trade War

author

Katy Evans

Managing Editor

clockSep 21 2018, 17:00 UTC

if it came to this, it would hit the US where it hurts. Fahroni/Shutterstock

With an increasingly volatile leader who has consistently stretched out the hand of friendship to previously considered enemies while ignoring long-standing allies, a trade war between the US and its closest North American neighbor is not out of the question.

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One Ottawa University-based professor of law and medicine, Amir Attaran, proposed how to hit the US where it hurts – hard – in an op-ed in Canadian magazine Macleans back in June that he claims is now being considered by officials if a potential trade war scenario looks likely to escalate.

His suggestion? Expropriate pharmaceutical patents. It’s simple, and genius really, if you want to hit your opponent right where it costs.

This all began back in June when the US imposed trade tariffs on Canadian steel and aluminum for “national security”, despite suggesting it would be exempt from the US’ new trade laws. Canada responded by not only imposing the same tariffs on the same goods, but extending it to include a list of traditionally American-made items such as pizza, orange juice, whiskey, and US-made maple syrup. (The official list is long and slightly baffling, including mattresses, felt pens, jam, fungicides, and tablecloths.)

So, what does “expropriate pharmaceutical patents” mean? It means that any intellectual property rights to patented pharmaceutical drugs in the US won’t apply in Canada.

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“With typical drug prices growing an average of 12 percent annually, and with certain specialty drugs priced over $500,000, controlling the right pharmaceutical patents is like having several gold mines,” Attaran wrote.

Six of the world’s top 10 pharmaceutical companies are American, and they lobby, dollar for dollar, more than the banking, car, and defense industries combined. But this plan wouldn’t just remove Canada from the buyer’s market. Expropriating US pharmaceutical patents would allow Canadian pharmacies to legally copy patented drugs controlled by US companies.

There is a precedent for this – the World Trade Organization enlisted new “compulsory licensing” laws to do just this during the 1990s-2005 HIV/AIDS crisis – but this hasn’t been legal in Canada since the signing of the 1988 Canada-US Free Trade Agreement, the forerunner of NAFTA.

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If this became legal again, it could even give Canadian companies the right not just to copy and sell but to export, too.

The benefits for Canada are obvious if this went ahead: growth for its pharmaceutical industry, lower prices that will be passed on to Canadian households, billions of dollars saved for the publicly funded Medicare, and, of course, billions of dollars lost and a break on the monopoly of the US pharmaceutical industry.  

And, Attaran points out, once Canada shows the world how it’s done, other countries will follow.

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So, could this really go ahead? Canada officials are in Washington this week to resume NAFTA negotiations, to which the US has given an October 1 deadline.  

“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. “I’m positive it’s being considered.”

We'll just have to wait and see.

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[H/T: Yahoo Finance]


  • Canada,

  • United States,

  • tariffs,

  • pharma

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