U.S. wary of Canada’s drug-price plans as world awaits coronavirus therapy

WASHINGTON — The United States is keeping Canada and its plans to overhaul its drug-pricing system on a “watch list” of countries deemed a peril to American intellectual property rights just as a world racked by COVID-19 takes an interest in access to a California company’s experimental new drug treatment.

In its annual report on foreign threats to U.S. copyright holders, the office of the U.S. Trade Representative is raising concerns about Canada’s plan to change how it calculates the fair price of prescription drugs, though stopping short of Big Pharma’s demand that it be deemed a “priority” trouble spot.

Canada’s plan has drawn “significant concern from stakeholders” because it would “dramatically reshape” how the arm’s-length Patented Medicine Prices Review Board evaluates drugs, says the report. The board plans to stop using the U.S. and Switzerland, home to the world’s highest drug prices, to help it determine what Canadian patients should pay. “If implemented, the changes may significantly undermine the marketplace for innovative pharmaceutical products, delay or prevent the introduction of new medicines in Canada and reduce investments in Canada’s life sciences sector,” the U.S. report says.

The report acknowledges that Canada has agreed to intellectualproperty reforms in the forthcoming U.S.-Mexico-Canada Agreement, which the USTR announced last week would become the law of the land on July 1.

That agreement could be Canada’s best defence against the escalating dangers of pandemic-fuelled protectionism in the United States, experts say — especially as the challenge of procuring weapons against COVID-19 moves from face masks to therapeutic drugs. Prime Minister Justin Trudeau, for instance, has pointed out that finding treatments for COVID-19 might take less time than finding a vaccine to prevent it.

The existence of the USMCA, along with Canada’s recently proven track record in negotiating with its stateside neighbours, could bode well for “Buy American” becoming “Buy North American,” said Scott Paul, president of the Alliance for American Manufacturing.

“It would not at all be unusual to have some regional exception or inclusion with respect to domestic preferences,” Paul told a panel discussion hosted by the Washington International Trade Association this week.

“The fact that we do have a USMCA entering into force soon provides a pretty good framework for that.”

That’s likely to be even more important in the coming months as crossborder procurement concerns start to focus on issues like drug therapies and vaccine supplies. Remdesivir, made by California-based Gilead Sciences, is causing a buzz after a clinical trial suggested it could prove effective in mitigating the symptoms of COVID-19.

The U.S. Food and Drug Administration on Friday authorized the emergency use of remdesivir on patients infected with the novel coronavirus, buoyed by evidence that it shortens recovery times. If it pans out, global demand will be enormous and countries with strong trade relationships with the U.S. may benefit.