Revised NAFTA means higher costs for medicines for Canada and Mexico

May 21, 2019: A new study of the health impacts of the revised NAFTA Agreement, (renamed the US-Canada Mexico Agreement or USMCA) by Dr Deborah Gleeson and other health experts shows the influence of the US pharmaceutical industry on the negotiations. These companies already have 20 years of monopoly patents on new medicines.

The USMCA contains extensions of monopoly patents beyond 20 years for all medicines, delaying the production of cheaper medicines. It also extends a separate monopoly on data protection for biologic drugs, which are the most expensive drugs increasingly used to treat cancer and other serious illness. Data protection delays the availability of data for production of cheaper versions of these medicines. These extensions are based on existing US laws. For Canada the data protection monopoly has been extended from eight to ten years, and for Mexico from zero to ten years.

Canadian studies show that this will raise medicine costs for their health system by between CDN$169 million-$305.8 million per year. The costs will be even greater for Mexico.

The US had also insisted on these stronger monopoly provisions in the original TPP-12. But they were suspended by the remaining 11 governments when the US left the TPP. The Trump administration is now insisting on these provisions in other trade deals and is likely to insist on them if it re-joins the TPP 11.

The study also shows that the USMCA also opens up markets in both Canada and Mexico for US food exports without reducing the subsidies the US provides to its own producers, and introduces a number of new regulatory reforms that weaken public health oversight of food safety. It reduces regulatory policy space through new provisions on ‘technical barriers to trade’ and requirements for greater regulatory coherence and harmonization across the three countries.

The authors conclude that the USMCA will increase medicine costs for Canada and Mexico, and that it places new, extended, and enforceable obligations on public regulators that increase the power of corporate interests during the development of new regulations. For these reasons they argue that the USMCA should not be used as a model for other agreements.