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TORONTO, ON--(Marketwired - July 20, 2015) - New research published by the Canadian Health Policy Institute (CHPI) suggests fears that the Trans-Pacific Partnership (TPP) will drive up health costs are unfounded. Critics argue provisions in the international trade deal that improve regulatory data protection (RDP) for new drugs could increase spending on health care.
The study tested this argument by examining the historical impact of changes to the length of regulatory data protection (RDP) for new drugs on levels of pharmaceutical and total health spending in Canada and Japan. It relied on data from the Organization for Economic Cooperation and Development (OECD) from 2005 to 2011.
In 2006 Canada changed its regulations in a way that effectively increased their RDP term from 0 years to 8 years. The data showed that pharmaceutical spending as a percentage of total health spending has actually decreased since then. Further, over the period 2005 to 2011 pharmaceutical expenditure as a percentage of GDP remained relatively stable after RDP was increased in Canada in 2006, whereas overall health spending as a percentage of GDP in Canada has gradually increased.
Similarly, Japan increased data protection in 2007 from 6 to 8 years. Fluctuations in pharmaceutical expenditures after that time have been in line with growth in health care spending as a percentage of GDP. In fact, in 2010 pharmaceutical spending decreased in a year where total health care spending increased.
According to the study's author Philip Stevens, "The past experiences of Canada and Japan indicate that spending on health care did not vary from previous trends when RDP terms were lengthened. Fears that the TPP trade agreement will drive up health costs are exaggerated."
Author: Philip Stevens is the Director of Geneva Network, a public policy research and advocacy organisation working at the nexus of international intellectual property, trade and health issues (www.geneva-network.com).
Get the Study
The study, Impact of improved data protection on health costs in Canada and Japan: lessons for the Trans-Pacific Partnership (TPP)
, was published at CHPI's online journal, Canadian Health Policy and can be downloaded at: www.canadianhealthpolicy.com or www.chpi.ca.
CHPI is a crowd-funded, consumer-driven, independent think-tank dedicated to conducting, publishing and communicating evidence-based research on health system performance and health policy issues that are important to Canadians.
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