[Ip-health] Patent Protection for Drugs Puts Pressure on U.S. in Trade Talks

Claire Cassedy claire.cassedy at keionline.org
Thu Jul 30 14:15:12 PDT 2015


Patent Protection for Drugs Puts Pressure on U.S. in Trade Talks


LAHAINA, Hawaii — With 12 nations pressing to conclude the largest regional
trade accord ever, United States officials find themselves squeezed between
activists pressing to secure access to low-cost pharmaceuticals and
Republicans who say Congress will reject a deal without strong patent
protections for the drug industry.

Negotiators gathered this week in Maui hoping the long-sought accord might
be finished by Friday. But dozens of issues remain unresolved on the
Trans-Pacific Partnership, which would link nations like Canada, Chile,
Australia and Japan under rules of commerce covering 40 percent of the
global economy.

No issue seems to elicit more passion than pharmaceuticals, where both
sides are using the language of life and death.

“The goal of the pharmaceutical industry is to change the rules
internationally, to change global norms with a new monopoly that is cheaper
for the companies and stronger,” said Judit Rius Sanjuan, a legal policy
adviser for Doctors Without Borders’ medical access campaign, which wants
lower-cost drugs on the market faster.

On the other side, Senator Orrin G. Hatch, the Utah Republican who is
chairman of the Senate Finance Committee, singled out the next generation
of pharmaceuticals, called biologics, and warned on Wednesday that “a
strong intellectual-property chapter — including strong patent and
regulatory data protections for biologics — is vital to securing
congressional support for this trade deal.”

The complexity of the pharmaceutical issues illustrates how difficult it
will be to agree on broad trade rules for 12 countries, including giants
like the United States and Japan and developing counties like Peru,
Malaysia, Vietnam and tiny Brunei. United States negotiators are using
novel arguments to secure positions. For instance, they are pushing to
mandate open access to the Internet as an antipiracy measure, so Hollywood
can use streaming videos to completely cut out the often-copied DVD.

But medicines remain a delicate problem, and if Japan’s last stand is on
rice and Canada’s is on dairy, the United States’ might be on

About 5,600 medicines are in development in the 12 T.P.P. countries,
according to the Senate Finance Committee. Of those, 3,372 are in the
United States, including more than 900 biologics, which are grown from live
cells. The industry contributes nearly $800 billion to the United States
economy each year.

United States law protects data collected during the development of
biologic medicines for 12 years, allowing drug makers to recoup their
research and development investments before generic companies can come in
with far cheaper versions. Negotiators for the United States say they are
obligated to defend American law, even though President Obama has been
pushing to shorten the patent protection to seven years.

But Congress can always change that window to conform to trade deals, said
Representative Sander M. Levin, Democrat of Michigan and an observer in

“It happens all the time,” he said. “That’s what a transition period is

Countries in the negotiations have windows of eight years or fewer.
Australia has dug in at five.

“I’ve got a mandate for five,” Andrew Robb, Australia’s trade and
investment minister, said, arguing that with complex biologics, it takes
six or seven years for generic-drug makers to develop what are known as

Activists here who cut their teeth during the AIDS drug wars 15 years ago
want generic-drug makers to compete with pharmaceutical firms as soon as a
drug reaches the market.

James Love, an activist with Knowledge Ecology International, and his wife,
Manon Anne Ress, of the Union for Affordable Cancer Treatment, who has
cancer, spent the flight to Maui pressing Michael B. Froman, the United
States trade representative, to secure access to expensive cancer drugs for
people like Ms. Ress, who faces the potential of paying $30,000 out of her
own pocket for her drugs now.

Negotiators already seem to be backing away from the hard-line United
States position. Observers to the negotiations say the 12-year
data-protection window almost certainly will be scaled back to five to
seven years, a move that will probably satisfy neither the pharmaceutical
firms and their allies nor the activists pressing to overturn the whole
patent system.

The Pacific accord is structured so that other countries can join in the
future, and the belief on both sides of the pharmaceutical fight is that
once 12 nations ratify rules, they will become international standards.

Then there are politics. Australian negotiators insist that their
Parliament will not accept any patent protection beyond five years for drug
companies that are so dominated by the United States. What left-wing
members of Parliament see as price gouging also comes straight out of the
government’s coffers, because pharmaceuticals are paid for by Australia’s
national health service.

Data protection may be arcane, but the stakes are high for both sides. Drug
companies are also pressing to make the data they collect during clinical
trials exclusive and protected for the longest period possible. That would
require generic drug companies to replicate much of the process that
created the drugs they seek to copy.

“Data exclusivity” is a more ironclad protection than a patent, because
smaller pharmaceutical makers cannot afford to file patent applications in
every country they do business in.

The pharmaceutical firms also want access to the extrajudicial tribunals
envisioned in the T.P.P.’s investor-state dispute settlement chapter. The
tribunals are intended to give investors legal recourse if a government
changes policies in ways that hurt the value of their investments.

The United States team is trying to find some middle course that preserves
pharmaceutical companies’ ability to recoup their research investments and
maintains an incentive to innovate while finding alternative ways to ensure
access to drugs.

That might mean transition periods for poorer countries that let cheap
alternatives in and keep older drugs on the market longer. It could also
mean incentives for United States drug companies to invest in T.P.P.
countries that accept stronger intellectual-property protections.

The activists have been pressing for much more significant changes, such as
a mandatory government fund to finance clinical trials, taking that cost
off drug developers’ balance sheet. But that approach seems to be a
restructuring of the pharmaceutical industry that most negotiators,
including Mr. Froman, the United States trade representative, cannot accept.

“There’s been no effort on U.S.T.R.’s part to foster innovation outside the
private sector,” Mr. Love said. “None.”

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