[Ip-health] CQ Roll Call on TPP Attack on White House Budget / Meds-Biologics Cost Savings

Peter Maybarduk pmaybarduk at citizen.org
Fri May 22 08:26:00 PDT 2015

Trade Deal Seen as Route to Delay Generic Drug Competition

By Kerry Young, CQ Roll Call

Critics of the Trans-Pacific Partnership, the 12-nation trade talks that stumbled in the Senate Tuesday, see congressional resistance to fast-track trade authority as helping their bid to prevent a deal on pharmaceuticals that would raise the cost of advanced medicines.

According to the critics, the Trans-Pacific Partnership would give makers of expensive and innovative medicines known as biologics 12 years of exclusivity to sell the drugs. The critics say the 12-year provision would even prevent the United States from shortening exclusivity, a change the Obama administration has proposed.

The Trans-Pacific Partnership is a priority on President Barack Obama's business agenda. The deal would set terms of trade between the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Talks are nearing completion.

The president has asked Congress to give him Trade Promotion Authority (S 995), known as fast-track, that would let Congress approve or reject a trade pact, but not amend it. The Senate blocked a vote for such authority Tuesday, but will try again Thursday as advocates and critics turn up the rhetoric on both fast-track and the Trans-Pacific Partnership. The House has yet to take up the bill.

The pact has the potential to be the "most harmful trade agreement for access to medicines ever," according to Doctors Without Borders, a group that campaigns to make medicines affordable in poor nations. "Companies would be able to charge high prices for longer periods of time ... It would be much harder for generic companies to produce cheaper drugs that are vital to people's health."

At issue is how long the biologics would be protected from competition. TPP countries currently protect the drugs for various lengths of time and some offer no restrictions on competition.

The Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization (BIO) want the trade agreement to give them a 12-year period of exclusivity for biologics, a drug that is based on copies of proteins. The groups say they need the protection to recoup investment in the drugs. The 2010 health law (PL 111-148, PL 111-152) granted 12 years of exclusive sales.

Groups including AARP and Public Citizen are also against the 12-year provision.

If the United States agrees to the 12-year protection in the Trans-Pacific Partnership, the Obama administration would have to drop its idea of moving to a seven-year guarantee period, said Peter Maybarduk, director of Public Citizen's Global Access to Medicines Program, said in an interview. The administration included the seven-year idea in its fiscal 2016 budget request, saying it could help save Medicare $4.4 billion over a decade. The administration and lawmakers could find such reductions attractive with budgets tight.

"The United States would be bound to the same rule in a treaty meaning that Congress can't revisit the subject," Maybarduk said.

"Some TPP countries currently have no data protection for biologic drugs. Some have five years. Others have eight," the U.S. Trade Representative's office said in a 2013 blog post. "Traditionally, the U.S. approach to trade negotiations has been to base proposals on existing U.S. law, where the current standard is 12 years."

PhRMA and BIO have significant support for lawmakers for the 12 years of protection under TPP.

PhRMA and BIO are likely to prevail if efforts to clear the TPP succeed, said Vince H. Suneja, a former pharmaceutical executive who also earlier aided with Commerce Department work in India.

"If you're sitting in the White House's shoes, you are trying to increase trade and continue to revitalize the economy," said Suneja,  now the chief executive life-sciences consulting firm TwoFour Insight Group, LLC, which has an emphasis on India.

India, which isn't involved in TPP talks, would feel the outcome of an agreement, according to TwoFour Insight. India's generics drug industry "has positioned itself as the `pharmacy' of the developing world and is vying for increased market share in developed countries such as the United States," the post said. The TPP would encompass about 800 million customers and its intellectual property agreements would reach beyond the countries in the pact.

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