Opportunities and Benefits of CETA for Canada’s Pharmaceutical Exporters
Why export to the EU?
- Significant Market: The EU is the world’s second-largest importer of pharmaceutical products, with imports totalling $107 billion (or 24% of the global import market for pharmaceutical products).
- Realizable Opportunities: The EU is Canada’s second largest export market for pharmaceutical products, with opportunities for further growth. Canadian exports of pharmaceutical products to the EU reached $1.3 billion in 2016.
How will CETA benefit Canadian pharmaceutical companies?
- Canadian service providers in the pharmaceutical sector will be on equal footing with their EU competitors and will receive better treatment than most of their non-EU competitors.
- CETA will provide a predictable and transparent investment climate for Canadian and EU investors in the pharmaceutical sector.
- Canadian pharmaceutical companies will also benefit from improved labour mobility provisions, expanded access to EU government procurement opportunities, and mutual recognition of compliance certification processes for pharmaceutical good manufacturing practices.
Opportunities for investment in Canada’s pharmaceutical sector through CETA
Canada is an attractive destination for pharmaceutical research and manufacturing, offering:
- the lowest business costs in the G7 for biomedical research and development; and
- the lowest cost structure in the G7 for both medical devices and pharmaceuticals.
Once CETA is provisionally applied:
- foreign direct investors in Canada will have guaranteed preferential access to both the EU and North American markets; and
- enhanced intellectual property rights will furthermore provide greater protection for investments made in Canada’s pharmaceutical industry.
Mutual recognition of pharmaceutical good manufacturing practices
- CETA will provide a mechanism for Canada and the EU to mutually accept the results of each other’s inspections of pharmaceutical manufacturers.
- Continued coverage under the Protocol for pharmaceutical good manufacturing practices may reduce the number of duplicative inspection and certification requirements for Canadian pharmaceutical manufacturers.
- CETA provisions will make it easier for short-term business visitors, intra-company transferees, investors, contract service suppliers, and independent professionals to conduct business in many EU Member States.
- This may include entry without the requirement of a work permit for 90 days in any six-month period for any of the following activities: meetings or consultations, research and design, marketing research, training seminars, trade fairs and exhibitions, sales, purchasing, after-sales or after-lease service, commercial transactions, translation and interpretation (some conditions apply in some Members States).
- Under CETA, Canada will gain new access at the sub-central level (regions and municipalities) to procurement by local contracting authorities and bodies governed by public law (e.g. hospitals, schools, universities).
- CETA’s government procurement provisions cover the procurement of pharmaceutical products as well as a broad range of services that may be of interest to the pharmaceutical sector, including technical testing and analysis services.
|Top 5 suppliers of pharmaceutical products to the EU||% of Import Market Share|
|Source: Eurostat (2016)|
Once CETA is provisionally applied, Canadian exporters of pharmaceutical products will enjoy the advantages created from the agreement over competitors based in countries that do not have a preferential trade agreement in force with the EU.
Non-CETA related factors to keep in mind when exporting pharmaceutical products to the EU
- Companies must apply for authorization at either the Member State or EU level to market pharmaceutical products in the EU. A Canadian company without a presence in the EU must use an EU-based importer or representative to market any pharmaceutical product in the EU.
- Pharmaceutical pricing and reimbursement systems are not uniform across the EU and will have varying rules, policies, and payment mechanisms. Prior to exporting, a Canadian company should have an understanding of the characteristics and particularities of the local reimbursement system.
For more detail on how CETA benefits your company, contact a Trade Commissioner today.
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