Friday, June 9, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts
No Result
View All Result
Macdonald-Laurier Institute

Trump says Canadians are unfairly freeloading off American drugs. He’s right: Richard Owens and Stephen Ezell in the Financial Post

June 28, 2018
in Columns, Domestic Policy Program, Health, In the Media, Latest News, Richard Owens
Reading Time: 3 mins read
A A
Photo credit: Vegan Liftz

It’s time for Canada to grow up and to purge the defeatist parasitism that sometimes characterizes our policy-making, write Richard Owens and Stephen Ezell in the Financial Post. 

By Richard Owens and Stephen Ezell, June 28, 2018

President Donald Trump recently called out 24 countries, Canada among them, for not paying fairly for patented medicines. Our artificially low patented drug prices, he argues, leave U.S. citizens to bear too much of the costs of development and approvals of new medicines. In his eyes, we’re freeloaders. “When foreign governments extort unreasonably low prices from U.S. drugmakers, Americans have to pay more to subsidize the enormous cost of research and development,” he said last month.

He’s right. This is part of Trump’s larger vision for trade: that the U.S. will cease subsidizing foreign markets. Canada has to grow up in our approach to trade and regulation.

Canada’s prices for patented drugs are artificially low because they are regulated by the Patented Medicine Prices Review Board (PMPRB). Our prices are 25-per-cent below median foreign-patented drug prices, and far lower than American prices. On top of this discount, the federal government is proposing complex changes to PMPRB drug-pricing regulations that would reduce patented prices by a further 20 per cent and diminish drug-company revenues in Canada by approximately 25 per cent. If this strikes you as egregious expropriation, you’re right.

Yet, as a recent Information Technology and Innovation Foundation report demonstrates, many countries use their central government’s power as a monopsony purchaser or regulator of drugs and devices to limit the prices foreign biopharmaceutical firms are able to charge for their exports, thereby artificially depressing earnings and inflating foreign trade deficits in the large U.S. life-sciences sector.

Life-sciences innovators depend upon the profits earned from one generation of biomedical innovation to finance investment in the next. That’s why academic research finds an almost one-to-one (0.97) correlation between bio-pharma enterprises’ sales and R&D expenditures, as well as a statistically significant relationship between a bio-pharma enterprise’s profits from the previous year and its R&D expenditures in the following year.

If all countries paid their fair shares for novel medicines, we’d all have more of them.

If all countries paid their fair shares for novel medicines, we’d all have more of them. New research from Precision Health Economics finds that if government price controls in non-U.S. OECD countries were lifted, the number of new treatments available would increase by nine to 12 per cent by 2030 (equivalent to eight to 13 new drugs in that year), potentially increasing the life expectancy of someone who is today 15 years old by 0.8 to 1.6 years on average. Other research finds that such greater levels of bio-pharma innovation could provide increased welfare gains of at least US$10 trillion for North Americans and US$7.5 trillion for Europeans over the next 50 years, reflecting improved length and quality of life and reduced health care costs.

From an innovation-policy perspective, Canada’s patented-drug pricing policies are a disaster. Canada wants to have both drug company investment and lower prices here. We want innovation without taking the necessary steps to get it.

To demand that anyone subsidize our needs, as we demand of drug companies and American consumers, is a Third World policy unbefitting our First World country. Simply put, it’s time for Canada to grow up and to purge the defeatist parasitism that sometimes characterizes our policy-making. Free-riding on drug prices is an example of how Canada refuses to step up to what is required for a globally leading innovation culture.

We do not suggest that Canada abandon impoverished patients who cannot afford sophisticated medicines. Rather, that the burden of supporting them should fall on Canadians, not on drug companies — and not on American patients. Moreover, by paying market prices, drugs will become available in Canada more often and sooner. More lives will be saved. Ironically, the logic of public health does not argue for depressing drug prices, but for paying the market price.

Canada should seek to cultivate an environment that ensures both that Canadian life-sciences innovators can flourish and that Canadian citizens enjoy world-class access to tomorrow’s life-saving treatments.

Richard C. Owens is Munk Senior Fellow at the Macdonald-Laurier Institute and adjunct professor at the University of Toronto’s faculty of law. Stephen Ezell is vice president of the Information Technology and Innovation Foundation in Washington, D.C.

Tags: HealthpharmaceuticalsRichard Owens
Previous Post

Sands tells The West Block how the Mexican election could split the NAFTA talks

Next Post

With a U.S. trade war escalating, Canada’s stability is also its weakness: Laura Dawson in the Globe and Mail

Related Posts

‘ASEAN centrality’ and the emerging great power competition: K. Yhome for the Observer Research Foundation
Columns

China should heed the concerns of its neighbors: Stephen Nagy in the Japan Times

June 8, 2023
A new national news media policy could save Canadian journalism
Releases

A new national news media policy could save Canadian journalism

June 7, 2023
Papers

And now, the news: A national news media policy for Canada

June 7, 2023
Next Post
With a U.S. trade war escalating, Canada’s stability is also its weakness: Laura Dawson in the Globe and Mail

With a U.S. trade war escalating, Canada’s stability is also its weakness: Laura Dawson in the Globe and Mail

Newsletter Signup

Follow us on

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario, K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

  • Inside Policy Magazine
  • Annual Reports
  • Jobs
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts

© 2021 Macdonald-Laurier Institute. All Rights reserved.

IDEAS CHANGE THE WORLD!Have the latest Canadian thought leadership delivered straight to your inbox.
First Name
Last Name
Email address

No thanks, I’m not interested.