The TPP will hurt health care

Canada’s health care system will suffer deep and irreversible damage if the Trans-Pacific Partnership (TPP) agreement is ratified in its current form.

The TPP is a free trade agreement negotiated between 12 Pacific Rim countries: Canada, Chile, Mexico, Peru, the United States, Japan, New Zealand, Australia, Brunei, Singapore, Vietnam and Malaysia.  Together, these countries represent 40 per cent of the world’s gross domestic product (GDP).

The deal was finalized in October 2015, and signed in February of 2016, without public consultation.  But public outcry against ratification of the deal – partly because of its potential to increase Canadian drug prices – has prompted the federal government to announce a study of the agreement and to solicit input from individuals and organizations.

Groups such as the Canadian Health Coalition and the Canadian Centre for Policy Alternatives (CCPA) have dissected the deal, and examined its potential impact on the affordability of drugs in this country.  The consensus is, drug costs will rise if the TPP is ratified.

Canadians already pay significantly more than other countries for their medicines.  The Organization for Economic Cooperation and Development (OECD) says Canadians pay the fourth-highest costs for pharmaceuticals – about US$713 a year, compared to the OECD average of US$515.

The TPP will only make things worse for all of us – especially for the roughly 25 per cent of Canadians who, according to a 2013 EKOS Research poll, already can’t afford their medications.

The TPP contains a provision that would allow pharmaceutical companies to extend the length of their patents to account for “regulatory delays” in the approval of drugs.  This allows the companies to retain a monopoly over the market and keep prices high. It also keeps generic drugs, which are much more affordable, out of the market for a longer period of time.  It’s estimated that these delays would cost Canadians an additional $636 million a year.

Also worrisome is the mechanism for Investor-State Dispute Settlement (ISDS) in the TPP.  It allows foreign investors, including pharmaceutical companies, to sue the government if they feel that a policy decision is in any way blocking their right to make a profit.  These cases are usually adjudicated by a tribunal of arbitrators who are appointed by both sides.  The tribunal does not have the power to overturn a government policy decision, but it can order the Canadian government to pay foreign investors huge sums of money.  That award can then be enforced through Canada’s court system.

When all is said and done, Canadian taxpayers will be left to foot the colossal bills.

Yet another major concern is that the investor protections granted by ISDS could eventually lock in privatization.  If, for example, Canada privatized an area of our health care system by opening it up to foreign investment, it would be very hard to bring those services back into the public health care system.  Those foreign investors would be able to use the ISDS mechanism to sue for compensation, making it too costly for governments to revert back to the public system.

The potentially huge costs associated with the ISDS process and extended patent terms afforded by the TPP would also make it too expensive for the government to consider expanding our public health care system.

Canadians and their governments could save billions if there was a national pharmacare strategy to complement our national medicare program.  It’s something Ontario’s Minister of Health and Long-Term Care, Dr. Eric Hoskins, acknowledges and supports.  Ratifying the TPP would effectively undermine any effort to make universal drug coverage possible because of the exorbitant drug costs governments would face under the deal.

Our publicly funded system has always been guided by the principle that health care should be universal and based on need, not one’s ability to pay.  Trade agreements, on the other hand, are motivated by corporate profit-making.  These conflicting values should not mix.  In fact, that was a key finding in the Royal Commission on the Future of Health Care in Canada headed by Roy Romanow in 2001.  It recommended that international trade deals “make explicit allowance for both maintaining and expanding publicly insured, financed and delivered health care.”  Yet there are five chapters in the TPP that relate specifically to medicines.

Furthermore, and perhaps most confounding, there is no evidence that the TPP will do wonders for the Canadian economy.  A study from the C.D. Howe Institute suggests that the impact of the TPP on the Canadian economy would be minimal at best.  It predicts there will be a mere 0.068 per cent growth in GDP by 2035 if we ratify the deal, and only a 0.026 per cent drop if we don’t.

So why would a country that has so little to gain even consider the TPP?  These are the important questions we need to be asking our government.

The good news is that the TPP is not a done deal. It needs to be ratified by at least six countries which represent at least 85 per cent of the GDP of the group of nations involved in the deal.

The Canadian government is interested in what we have to say and has already extended its public consultations twice.  The deadline for written submissions is now October 31, 2016.

If you care about the future of medicare, let the government know.  You can make a written submission on the TPP agreement to the House of Commons Standing Committee on International Trade and email it to: For more information on how to provide a written submission click on the following link: Guide for Submitting Briefs to House of Commons Committees.


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