Fe NR A se in iil CANADA The cost of drugs in Canada will take a big jump in the near future, not because of any increase in the cost of production, but because of a special deal being engineered behind the scenes between the giant multi- national drug companies and the Tory government in Ottawa. The deal may cost Canadians an extra $75 million a year in higher drug prices. Here are some of the background facts. When international drug companies put a new brand of drug on the market (often it is just a change of name, nothing more), they take out-a patent on it. That patent is usually good for 17 years. During this time, the multinational drug companies can and do charge all the traffic will bear. Prices are exorbitant and the profits enormous. The victims are the sick and the poor. In 1969, the federal government stepped in to lessen some of this profiteering in Canada. The Patent Act was amended. Brand name drugs were licensed. Any firm would import or produce the drug pro- vided it paid a four per cent royalty to the patent-holder. Furthermore, the length of the patent in Harry Rankin Canada was reduced to four years. In 1983 alone, this saved Canadians $24 million. This also permitted Canadian companies to go into business producing these drugs, called generic drugs instead of by their brand names. They were able to sell these generic drugs at half the price charged by the multinationals and still make a good profit. The multinationals, many of them U.S. owned, have been pressuring the Cana- dian government to stop this practice, and allow the foreign firms to retain their monopoly and continue with their profit- eering. The U.S. government got into the act too, demanding that Canada change its laws to accommodate the U.S. compan- ies. Consumer Affairs Minister Michel Tory deal with foreign-owned drug firms will cost us Cote now proposes to change Canadian regulations. He is considering increasing the royalties from four to 14 per cent and increasing the length of the patent in Can- ada from four to six years. Many drug prices will double. These concessions to the big multi- national drug companies are being pro- posed despite the fact that the companies have been ripping off the federal govern- ment. According to Revenue Canada, 20 of them owe Ottawa $70 million in income taxes because they concealed their real income. Two of them are currently being sued by Ottawa for $18.8 million. It is a clear case of a sellout of Canadian interests to foreign interests. Is this another one of the deals cooked up , nationals are given higher profits, they between Mulroney and Reagan? The excuse given by Cote for the action he intends to take is that if the -multi- may spend some of it in Canada on research. What a sick joke that is. The multinationals will pocket the extra profit and continue to do their research abroad where they have always done it. A patent on a drug is wrong in princi- ple. No company should be allowed to profit on the illness of people, and their need of drugs to maintain their health or even life itself. Nor should any royalties be paid by Canadians. The big corporations always prate about “free enterprise” but they are afraid of free and open competition — they want monopolies for themselves. In Canada drugs should be produced by publicly-owned corporations and sold at cost. If we are to prevent this proposed increase in the price of drugs, we will have to let Prime Minister Mulroney know how we feel, just as the seniors did when he tried to reduce their pensions by de- indexing. De-indexing gives Tories ‘windfall Continued from page 1 Congress of Canadian Women, the Society of Transition Houses and others, and are expected to take up the campaign in this province. The petitions will be directed to Prime Minister Brian Mulroney and Finance Min- ister Michael Wilson as well as other MPs, Dulude said. While focusing on the de-indexation of family allowance payments, the NAC is also warning Canadians about the effects of reductions in child tax exemptions and the change in child tax credits. Under the Tories’ May 23 budget, family allowance payments will only be indexed to the extent that the official rate of inflation exceeds three per cent. Thus, if the inflation rate, as published by Statistics Canada, is four per cent, payments will only increase one per cent. The budget also reduced the child tax A new pamphlet by William Kashtan, leader of the Communist Party of Canada ORDER YOURS NOW $7 Available from: Communist Party, 2747 E. Hastings St. Van. B.C. V5K 1Z8 or Progress Books, 71 Bathurst St., Toronto, Ont. M5V 2P6 2 e PACIFIC TRIBUNE, JULY 10, 1985 exemption for income tax purposes from the current $710 to $560 in 1987 and $470 in 1988. The child tax credit has been increased but the family income level at which reduc- © tions in the credit begin has been lowered considerably — from the current $26,330 to $23,500. For many families at the old threshold level of $26,000, there will likely be little or no increase in child tax credits but the cuts in family allowance payments and child tax exemption will still apply. According to Finance Department fig- ures, some $15 million will be taken from families in 1985-86 and $40 million in 1986- 87. Couple that with the elimination of fed- eral tax reduction and increases in direct taxes and it is evident that the budget hammers low to middle income families while exempting the wealthy. In a summary of the May budget prop- osals prepared for the NAC, Dulude pointed out that the de-indexing of personal exemptions will provide the federal treasury with a windfall in extra revenue, mostly derived from low and middle income earners. Her charge is backed by a Globe and Mail article, July 1, which indicates de-indexing will take an extra $4.3 billion from taxpay- ers in 1990. Without de-indexing protec- tion, wage earners whose incomes rise to compensate for inflation will find them- - selves in a higher tax bracket and will be paying more. Although the move will hit all income earners, a couple making $10,000 a year will be taxed 115 per cent more than they would with full indexing, while a family earning $100,000 will have their taxes rise by only 2.8 per cent. At the same time the federal tax credit of $50 for individuals and $100 for couples earning under $40,000 has been abolished, bringing the total bill for the low income family to $291. A further study carried by the Globe July 4 found that low to middle income families would suffer the greatest increases in taxes over the period 1985-89, compared to high income families. For a single parent earning $27,000 with three children, for example, the increase in taxes as a result of the budget would be 53.8 per cent. For a couple with a total income of $81,000 and two children, the tax increase would only be 16 per cent, the paper reported. Even with the government’s backtrack- ing on pension de-indexing, proposed pen- sion reforms will still leave the majority of women ill prepared for retirement. No men- tion was made of the Canada Pension Plan, which NAC wants expanded. The propos- als deal only with employer-sponsored pen- sion plans, which cover less than one-third of employed women. Divorced women are also left in a precarious position since the courts or an ex-spouse can refuse to split pension credits when a marriage is dis- solved. Neither will the poor nor the vast major- ity of women be able to take advantage of the tax savings involved in tripling the Reg- istered Retirement Savings Plan to $15,500. Ina sleight-of-hand gesture, while restor- ing pension protection, Ottawa placed another percentage increase on the federal sales tax and moved to include some pre- viously exempt items. Among these are over the counter drugs, ointments and baby care products. As major users of these goods, women and the elderly will be particularly affected. It is estimated that a bottle of pain reliever currently retailing at $5 will soon cost $6.50 because of the tax increase. With women’s unemployment rates rapidly surpassing men’s there were no pro- visions in the budget for job creation. The $900 million allocated for job training in the previous Liberal budget has been reversed so that 80 per cent of it will now go to the private sector in subsidies with the remain- ing 20 per cent for government-sponsored programs. Although no immediate changes were advanced for unemployment insurance a review will be carried out by a special com- mittee composed of “leading Canadians from the private sector.” A hidden attack on women is the $2- billion reduction in transfers to the provin- ces by 1990. This will result in cuts in education, health care and social service programs. On the other hand defence spending will rise by 27 per cent between now and 1986-87 compared to a 20 per cent increase for all social development expenditures. The one year corporate surtax of 5 per cent on large businesses and 18-month sur- tax on high income earners is well compen- sated by the effective abolition of the capital gains tax. In 1982, 43 per cent of all capital gains went to those with incomes over $100,000, these account for less than 0.6 per cent all tax filers.