Author
Philip Stevens
Introduction
In the Trans-Pacific Partnership (TPP) negotiations, the U.S. and Japan have proposed that TPP trading nations increase their period of regulatory data protection (RDP) for biologic medicines to align with practice in other countries. These proposals have been strongly opposed by a number of academics who claim that such a move would significantly increase public spending on medicines.
Objective
To examine 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.
Data
Data on health and pharmaceutical and total health spending in Canada and Japan were obtained from the Organization for Economic Cooperation and Development (OECD). Canada data covered the years 2005 to 2011. Japan data covered the years 2005 to 2010.
Results
In 2006 Canada changed its regulations in a way that effectively increased their RDP term from 0 years to 8 years. Pharmaceutical spending as a percentage of total health spending has actually decreased since then. 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 (effectively 9 years). Fluctuations in 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.
Conclusions
The past experiences of Canada and Japan indicate that expenditures on medicines did not vary from previous trends when RDP terms were lengthened.
