The investor-to-state dispute settlement (ISDS) provisions proposed in trade agreements give pharmaceutical corporations the right to sue governments for compensation if domestic laws negatively affect future earnings on their intellectual property or investments, and even if these laws are in accordance with public interests. Better access to medicines or preventing unsafe or ineffective medicines from entering the market could prove problematic.
Major US, Canadian and French pharmaceutical companies have recently challenged pro-public health measures through ISDS disputes brought under ISDS provisions.
Chemical corporations have also used ISDS in numerous occasions to challenge national bans on hazardous substances.
Most well-known cases include:
• Ethyl (US) vs. Canada: following Canada’s ban on the toxic petrol additive MMT, the US producer sued for US$201 million in compensation. In 1998, Canada agreed in a settlement to pay US$13 million and withdrew the ban (NAFTA invoked).
• Eli Lilly (US) vs. Canada: the pharmaceutical corporation challenged Canada’s patent standards after Canadian courts invalidated the company’s supplementary patents for Strattera and Zyprexa, claiming the drugs were not sufficiently innovative. The investor is claiming C$500 million. Case pending (NAFTA invoked).
• Dow Chemical (US) vs. Canada: the chemical corporation initiated a dispute for losses it alleged were caused by a Quebec provincial ban on lawn pesticides containing the active ingredient 2,4-D, classified as a possible carcinogen and one of the ingredients in Agent Orange, the herbicide widely used during the Vietnam war. In a settlement in 2011, the ban was sustained but Quebec was required to state that “products containing 2,4-D do not pose an unacceptable risk to human health or the environment provided that the instructions on their label are followed.” (NAFTA invoked.)