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Why pharmaceuticals could be the prescription for trade warfare that truly hurts America
Opinion: If Canada wants to decisively threaten maximum pain and stop the escalating trade war with the U.S., it should propose expropriating pharmaceutical patents
If we are not to let the bully win, Canada must find an asymmetrical way to retaliate in this trade war. One that destroys American resolve, but spares us—or even benefits us. But how?
There are several ways, but Canada should consider—and threaten—expropriating American pharmaceutical patents.
Pharmaceutical patents are ultra-valuable assets. Whoever controls a drug’s patent has the exclusive right to make and export that drug. With typical drug prices growing an average of 12 per cent annually, and with certain specialty drugs priced over $500,000, controlling the right pharmaceutical patents is like having several gold mines.
But what makes pharmaceutical patents ripe for retaliation is the vulnerability of America’s pharmaceutical industry. Six of the world’s top ten pharmaceutical companies are American. No industry throws more lobbying dollars around Washington—more than the banking, defence, and automobile industries combined. Any trade retaliation aimed at pharmaceuticals certainly will be felt on Wall Street and heard in the White House.
Canada has already expropriated pharmaceutical patents in the past: The federal government did so hundreds of times in the 1970s and 1980s, but stopped because of the 1988 Canada-U.S. Free Trade Agreement, which later inspired NAFTA. Now that the White House wants to back out of our trading relations and NAFTA too, it is fair to revisit that decision.
If we are not to let the bully win, Canada must find an asymmetrical way to retaliate in this trade war. One that destroys American resolve, but spares us—or even benefits us. But how?
There are several ways, but Canada should consider—and threaten—expropriating American pharmaceutical patents.
Pharmaceutical patents are ultra-valuable assets. Whoever controls a drug’s patent has the exclusive right to make and export that drug. With typical drug prices growing an average of 12 per cent annually, and with certain specialty drugs priced over $500,000, controlling the right pharmaceutical patents is like having several gold mines.
But what makes pharmaceutical patents ripe for retaliation is the vulnerability of America’s pharmaceutical industry. Six of the world’s top ten pharmaceutical companies are American. No industry throws more lobbying dollars around Washington—more than the banking, defence, and automobile industries combined. Any trade retaliation aimed at pharmaceuticals certainly will be felt on Wall Street and heard in the White House.
Canada has already expropriated pharmaceutical patents in the past: The federal government did so hundreds of times in the 1970s and 1980s, but stopped because of the 1988 Canada-U.S. Free Trade Agreement, which later inspired NAFTA. Now that the White House wants to back out of our trading relations and NAFTA too, it is fair to revisit that decision.
https://www.macleans.ca/opinion/why-pharmaceuticals-could-be-the-prescription-for-trade-warfare-that-truly-hurts-america/
Hit where it hurts most. Wonder if Trump would even understand this.
Sid