Lower drug prices stifle research and access

Re NAFTA’s threat to our health, Opinion, Feb. 5 I admire the work of the HIV/AIDS Legal Network, but this column by Nicholas Caivano and Richard Elliott needs some perspective.

Canada’s drug prices are not high relative to other developed countries (except for our generic drugs). Recent moves by the federal government to further reduce proprietary drug prices in Canada risk something even more problematic than price — and that is access. Countries with stricter price controls tend not to have early access to new drugs because their introduction into those jurisdictions is delayed. We do not want to be such a jurisdiction.

The pharmaceutical industry is a highrisk business and its profits, relative to its cost of capital, are not supranormal. Patent term and data exclusivity are actually quite finely tuned. Quite simply, there is no other material source for the research that leads to new remedies other than drug company profits.

Higher drug prices in a jurisdiction correlate strongly with levels of innovation and research in that juris- diction. We do not want to reduce innovation by making drug companies the ones to subsidize access for the poor. Better for there to be direct subsidy from government or charity.

Finally, strong intellectual property rules, for pharmaceuticals as well as other intellectual property goods, greatly enhance trade. We do want to strengthen the rules in NAFTA, for our own good.

Richard C. Owens, adjunct professor, University of Toronto Faculty of Law