As parties to the United States-Mexico-Canada Agreement (USMCA), Canada and Mexico have agreed to adopt important intellectual property protections for biologic medicines. Most significantly, both countries have agreed to increase the term of regulatory data protection (RDP) for new biologic medicines to ten years, thereby approaching the 12 years provided by the United States. Currently, Canada provides an eight-year term, while Mexico offers no protection.
Despite past evidence to the contrary, some have suggested that this provision of the USMCA will increase drug spending. For example, a memo prepared for Canada’s Health Minister suggested that the USMCA will result in additional medicine costs of CA$169m by 2029.
This research note presents evidence that extending the term of regulatory data protection is unlikely to drive up health spending beyond existing trends. Evidence from Japan and Canada, which both lengthened their respective terms of data protection unilaterally in 2007 and 2006 respectively, shows that the increased protection did not raise drug spending as a percentage of overall health care spending or lead to higher growth rates of drug spending.
The research note proceeds as follows. The first section gives an overview of methodology and data, followed by an overview of the role and rationale for regulatory data protection in the research and development of biologic medicines. The paper then presents evidence on health and medicines spending from Japan and Canada in the years immediately preceding and following the lengthening of their terms of protection for regulatory data.
[To read the original research, click here]
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