Canada's protection of intellectual property (IP) in the pharmaceutical industry falls short of international standards and could hinder its ability to negotiate international trade deals now under discussion, a new report warns.

"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 US and the European Union [EU]," says report author Dr Kristina Lybecker, associate professor of economics at Colorado College and senior fellow at Canadian public policy think tank the Fraser Institute.

"By strengthening IP protection, Canada has a greater chance of increasing trade, gaining access to foreign markets and reducing tariffs and trade barriers," says Dr Lybecker. 

Enhanced IP protections will strengthen the innovative pharmaceutical industry and facilitate Canada's accession to the international trade agreements which are now under negotiation - specifically the Comprehensive Economic and Trade Agreement (CETA) with the EU and the Trans-Pacific Partnership (TPP) Agreement with Australia, Brunei-Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam, she says.

Moreover, she adds, increasing Canadian levels of IP protection for medicines to more closely align with those in other developed nations would provide valuable non-trade benefits to Canadians, including: reduced legal ambiguity and litigation; greater R&D expenditures; additional job creation in the pharmaceutical industry; greater pharmaceutical self-sufficiency; improved access to medical innovations; and additional innovation in cutting-edge treatments and therapies.

Overall, Dr Lybecker finds that the trade and economic benefits of enhanced IP protection would more than compensate for the estimated C$367-C$903 million annual increase in pharmaceutical expenditures. 

"Estimates of increased trade through CETA alone suggest a C$12 billion annual benefit to the Canadian economy,” she points out.

CETA offers access to the EU, the world's largest single market, with a population of more than 500 million and a Gross Domestic Product (GDP) of C$17.4 trillion. According to a joint study by the Canadian and EU governments, CETA is projected to boost Canada's exports to the EU by 20%, to reduce tariffs and non-tariff barriers, and provide Canadian companies access to the EU's C$3 trillion government procurement market.

The TPP Agreement is the other major trade deal now under negotiation where enhanced IP protection could improve Canada's negotiating position. The TPP offers access to the large and dynamic Asian market, including China's future inclusion.

The report also includes essays by Dr Laura Dawson, international trade specialist and former senior adviser to the US government, who calculates that having access to the TPP could increase Canadian exports by nearly C$16 billion. TPP countries represent a prospective free-trade zone of more than 785 million people and a GDP in excess of C$26.4 trillion, she says.

"When it comes to CETA and TPP negotiations, the benefits of trade - including annual estimated benefits of nearly C$22 billion for Canada - far exceed any increase in health expenditures that might result from brining Canada's IP protection regime in line with those in other developed nations," says Dr Dawson.

"Additionally, strengthening Canadian IP protection for pharmaceutical innovators may also improve Canadian access to future free trade and preferential market access agreements in other regions, including Asia and Latin America," she suggests.