[Ip-health] Politico: Obama delivers TPP hard sell to pharma CEOs

Thiru Balasubramaniam thiru at keionline.org
Thu Oct 8 20:45:53 PDT 2015


<SNIP>


Last week, Froman enlisted the help of HHS Secretary Sylvia Mathews Burwell
to call health ministers in other countries to convince them to sign on to
eight years. Froman himself made late night calls to U.S. lawmakers, in one
case persuading a critic to withdraw a letter that would have undermined
his efforts by criticizing the eight-year period as too lengthy. He also
fielded angry calls from several U.S. lawmakers and industry executives
concerned about the way the talks were shaping up.

In the final round of negotiations, not even a phone call between Obama and
Australian Prime Minister Malcolm Turnbull could budge the Aussies from
their position of five years.

"They used everything they could," said a source who closely followed the
talks.

In the end, political concerns in Australia won the day. Anything more than
the five years already in Australian law
<http://go.politicoemail.com/?qs=38c5a74c3207c14c2c16bf2ba64f0ed886ed02ef8d332aee0a8a121971f8411e>
would
have been political suicide for Turnbull's center-right Liberal party.
Australian Trade Minister Andrew Robb had strict orders: Don't return to
Canberra with a deal that could shut out cheaper generic versions of the
drugs for a longer period and potentially raise costs for the country's
national health care system.

"This would not have gotten better with time," Froman said.

--


*Obama delivers TPP hard sell to pharma CEOs*

By Adam Behsudi and Sarah Karlin

10/08/2015 04:11 PM EDT
Updated 10/08/2015 09:26 PM EDT

*President Barack Obama failed to move top pharmaceutical executives
Thursday afternoon on their position that a landmark trade pact falls far
short of their demands for strong monopoly protections for a new class of
drugs.*

The president argued the pact offers them big gains, nonetheless, by
setting the first international standard for biological drugs where there
are none now. Five of the countries in the Trans-Pacific Partnership talks
have no such protections.

The meeting was set up as drugmakers and powerful lawmakers have panned the
agreement reached earlier this week after nearly six years of talks.
Drugmakers' demands for 12 years of protection for a new class of
medications that treat cancer and other afflictions bedeviled the talks for
nearly six years.

A pharmaceutical industry source said the CEOs walked into the meeting
still pressing for 12 years and walked out sticking to this position, but
added that the industry is waiting to see the full details of the trade
deal before it decides how it will move forward, describing their strategy
as "formless" right now.

The industry is "bewildered" as to how after the years of negotiations, the
administration was not able to get Australia to budge on its position on
the topic, the source added.

The industry lobby PhRMA said the company CEO's emphasized their
disappointment and that the deal "will compromise the next wave of
innovation and disrupt thedevelopment of new, critically-needed medicines."

The White House declined to comment on the outcome of the meeting, but said
it was part of the President's broader attempt to make his case for the
trade deal.

Now the compromise threatens to blow up the deal in Congress.

"A good compromise usually results in something of greater overall value
for all the parties involved," Senate Finance Committee Chairman Orrin
Hatch (R-Utah) said on the Senate floor Wednesday. "And, at least according
to the information now available, it is unclear whether this administration
achieved that kind of outcome for American innovators."

Hatch and other pro-trade Republicans have carried the banner for the
pharmaceutical industry in the talks, pressing the Obama administration to
demand that other countries accept the 12 years of monopoly pricing power
that biologics have under U.S. law. The time period would keep test data
off limits to companies wanting to create cheaper, "bioimilar" versions of
the drugs made from living organisms. Companies making cheaper versions of
the drugs made from living organisms, known as "biosimilars," could not
enter the market during this time period.

"This was an issue that affected everyone and probably was a make-or-break
issue for the negotiations," U.S. Trade Representative Michael Froman said
in an interview.

A sleep-deprived Froman walked out of the Atlanta Westin on Monday having
reached a compromise establishing a baseline of five years protection for
the drugs, with language that could eventually bring the protection period
up to eight years.

But the night before trade ministers announced a final deal, the industry
was already deriding reports of a compromise. The head of the Biotechnology
Industry Organization said he was "disappointed" the U.S. would not stick
to 12 years, a time period the industry argues is necessary to recoup the
millions of dollars required to develop these drugs.

"The Congress set 12 years as the appropriate period to both foster
innovation and provide access to biosimilars in a reasonable time frame,"
BIO President and CEO Jim Greenwood said.

By all accounts, Froman and the administration pushed hard to get
Australia, Chile, Peru and other countries in the talks to agree to at
least eight years of protection - below the 12 years in U.S. law but more
in line with the Obama administration's complicated view on the issue.

The administration agreed to 12 years of data protection for biologics as
part of a compromise with the drug industry to secure passage of the
Affordable Care Act. Since then, however, the administration has repeatedly
tried through budget proposals to cut that period to seven years.

Last week, Froman enlisted the help of HHS Secretary Sylvia Mathews Burwell
to call health ministers in other countries to convince them to sign on to
eight years. Froman himself made late night calls to U.S. lawmakers, in one
case persuading a critic to withdraw a letter that would have undermined
his efforts by criticizing the eight-year period as too lengthy. He also
fielded angry calls from several U.S. lawmakers and industry executives
concerned about the way the talks were shaping up.

In the final round of negotiations, not even a phone call between Obama and
Australian Prime Minister Malcolm Turnbull could budge the Aussies from
their position of five years.

"They used everything they could," said a source who closely followed the
talks.

In the end, political concerns in Australia won the day. Anything more than
the five years already in Australian law
<http://go.politicoemail.com/?qs=38c5a74c3207c14c2c16bf2ba64f0ed886ed02ef8d332aee0a8a121971f8411e>
would
have been political suicide for Turnbull's center-right Liberal party.
Australian Trade Minister Andrew Robb had strict orders: Don't return to
Canberra with a deal that could shut out cheaper generic versions of the
drugs for a longer period and potentially raise costs for the country's
national health care system.

"This would not have gotten better with time," Froman said.

It's also an issue U.S. officials say cannot be easily reopened, since the
final deal pushed the boundaries of what was politically possible for
countries like Australia.

The administration had rebuffed earlier suggestions from lawmakers that it
drop countries from the deal that refused to agree to the high standards
the industry was seeking.

"The fact that other countries have political constraints should not be the
thing that sets policies for innovative medicines over the next 40 years,"
said one source who closely followed the talks.

After more than two days of almost continuous meetings in Atlanta, Robb and
Froman finally emerged from a hotel conference room at 3 a.m. on Sunday
with a drug deal that had eluded them for years but which could turn the
industry against the agreement and complicate efforts to get it through
Congress.

Japan's Minister of Economic Revitalization, Akira Amari, played a key role
in mediating the talks. The country has the equivalent of an eight-year
protection period and also a profitable biopharmaceutical sector.

"It would be nice to get a hard eight years of protection for everyone, but
you have to be realistic," a Japanese official said. "We didn't want this
issue to blow up the entire agreement."

While lawmakers may lament a deal that falls well short of U.S. law, health
advocates point out the industry actually scored a victory by establishing
protections for biologic drugs where there were none before.

"They haven't failed," said Burcu Kilic, research director for Public
Citizen's Global Access to Medicines Program. "The reality is, there is
currently no rule in international law which provides data protection for
biologic drugs."

Of the 12 countries in the trade pact, Peru, Vietnam, Malaysia, Mexico and
Brunei had no previous protection period for biologics. Australia, Chile,
Singapore and New Zealand say the compromise won't require them to pass new
legislation changing the five years of data protection already provided for
biologics. Japan and Canada provide eight years of protection.

Wall Street analysts also agreed the deal is a net gain on drugmakers'
bottom lines.

"Net, the TPP appears to be a positive for the industry," said Mark
Schoenebaum, a biotech analyst with Evercore ISI.

The compromise provides a country two options for "effective market
protection." The first option allows a government to have a straight-up
eight year protection period. The other option would allow Australia to
maintain the five years it now has on its books but add time to the
protection period to achieve something comparable to eight years through
"other measures" that take into account "local market circumstances."

Robb argued that monopoly protection for biologics in Australia usually end
up being eight years when the regulatory process is included. In Atlanta,
negotiators called on pharmaceutical companies to share their experiences
establishing protection for biologic drugs in countries that provide a
five-year period.

An industry source argued there was nothing in the language to compel a
government to add any more than a minimum of five years of protection.

"There is nothing in there that has enforceability," he said. "It was
designed so the United States could say we got eight and Australia can say
we got five."

The countries also agreed to revisit the compromise in 10 years since many
governments are currently devising regulatory pathways for biosimilars.

*Brett Norman also contributed to this report.*

*To view online*:
https://www.politicopro.com/trade/story/2015/10/pro-trade-tppbiologics-behsudi-059493
<http://go.politicoemail.com/?qs=38c5a74c3207c14cd401d43db9f862ea83ad4a691d9737db66867079e985d1b9>


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