[Ip-health] Trans-Pacific Partnership: U.S. Negotiating `Biologics' Proposal, Marking End to `Period of Reflection'

Jamie Love james.love at keionline.org
Thu Aug 29 10:24:59 PDT 2013

Reproduced with permission from International Trade Daily, 167 ITD-BUL
(Aug. 28, 2013). Copyright 2013 by The Bureau of National Affairs, Inc.
(800-372-1033) <http://www.bna.com>

Aug 28, 2013

Trans-Pacific Partnership: U.S. Negotiating `Biologics' Proposal, Marking
End to `Period of Reflection'

Trans-Pacific Partnership (TPP)

Key Development: “Period of reflection” on biologics has ended.

What's Next: 19th round of TPP talks set to conclude Aug. 30.

By Len Bracken

The United States is negotiating the terms of the provisions it will
propose in the Trans-Pacific Partnership (TPP) talks concerning
intellectual property rights protections for the bio-pharmaceutical
medicine commonly known as “biologics,” a civil society source in Brunei
for the 19th round of negotiations told BNA Aug. 27.

The negotiations mark the end of what U.S. trade officials have called a
“period of reflection” in which, for longer than a year, the administration
has been in consultations on the issue of biosimilar medicines that are
envisioned as cheaper, follow-on or generic versions of expensive biologics.

“I think the United States is getting ready to table something on this,”
the source said, referring to a concrete yet confidential proposal on
biologics in particular, and possibly on the pharmaceutical sector as a
whole. “I don't think it will happen at this round, but the negotiations
are taking place, and the proposal will be tabled soon.”

U.S. trade negotiators have said their goal on the issue is to strike a
balance between innovation that results in the development of new medicine
and access to medicines for all people in the region. The period of
reflection stemmed from strong opposition by the other TPP partners to a
previous U.S. proposal, the source said.

Companies such as Baxter, Eli Lilly, Novartis and Pfizer are notable
manufacturers of biologics, which are created using living organisms and
often treat diseases such as cancer and diabetes.

“Push-Back From Consumers” Cited.

While current U.S. law provides for 12 years of test data protection, a
form of nonpatent exclusivity, for biologics, there are indications that
the United States may be willing to compromise on the issue with the other
11 TPP partners—Australia, Brunei Darussalam, Canada, Chile, Malaysia,
Mexico, New Zealand, Peru, Singapore, Vietnam and Japan.

The data exclusivity means that potential manufacturers would have to
conduct their own clinical trials, as with a branded drug, and would
therefore not have the cost savings afforded to generics.

“There has been push-back from consumers in developing and developed
countries, so in order to get something on pharmaceuticals, the United
States would have to give up something in another area,” the source said,
referring to those who want to limit the length of data protections to make
less-expensive generics more quickly accessible.

Certain House Democrats have in the past recommended that the United States
refrain from negotiating any provisions related to exclusivity for
biosimilar medicines in the TPP talks, arguing that it would thwart
Congress's ability to trim that exclusivity to seven years without running
afoul of U.S. trade obligations. Lawmakers on both sides of the aisle,
however, have said that 12 years of regulatory data protection for
biologics should be included in the TPP agreement.

Pharmaceutical Research and Manufacturers of America (PhRMA), which
represents research-based pharmaceutical and biotechnology companies, told
BNA that it expects the administration to propose 12 years of data
protection for biologics in TPP because that is current U.S. law.

Mark Grayson, deputy vice president for international public affairs for
PhRMA, said that it is important for the administration to take the time to
“get the substance right” and ensure intellectual property rights are

Trade-Offs Needed to Close Deal.

James Love, director of Knowledge Ecology International (KEI), told BNA
that so far President Obama has not proposed 12 years—or any specific
term—for test data protection in the TPP.

“The president's own domestic budget assumes billions of savings from
rolling back the 12-year period that is now U.S. law to seven years,” Love
said, referring to the potential cost savings to Medicare and Medicaid if
generic versions of expensive biologics could be made in seven years rather
than 12.

“Many members of Congress, all receiving ample money from the
pharmaceutical industry, have pushed for 12 years, but there is opposition
from OMB [Office of Management and Budget], which has to budget to pay for
drugs, and opposition from some companies that want to market biosimilars,
and from businesses concerned about exploding USA health care costs.”

Love said the United States could seek different deals with different
countries, as there is considerable opposition to some of the U.S.
positions. He noted that transition periods have varied in past agreements,
such as the Agreement on Trade Related Aspects of Intellectual Property
Rights (TRIPS), and side letters have been used to provide for special
understandings about certain issues.

“The thing is that the TPP has a lot of chapters in it—there is more to it
than just pharmaceuticals—and there are a lot of countries that are not of
a like mind on many issues,” he said. “The United States will have to make
trade-offs regarding different sectors of the economy in the final end
game—not everybody gets everything, so it becomes a question of whose
interests will be sacrificed to get a deal.”

KEI views the 12 years of data exclusivity as a mistake and opposes what
its sees as the worldwide rapid rise in drug prices. The group advocates
that trade policy be used to encourage countries to contribute more to the
cost of public sector medical research and to follow the National Institute
of Health lead with regard to publicly releasing the results of studies.

“Other countries are beginning to think this is a productive way because
they don't want a future in which no one can afford cancer drugs,” KEI's
Love told BNA. “Apparently 11 out of the last 12 cancer drugs to hit the
market were priced at over $100,000 per course of treatment.”

President's 2013 Budget Has Biologics Component

The president's 2013 budget has two subsections concerning biologics that,
if enacted, the administration claims would generate $15 billion in savings
over 10 years.

The first subsection is entitled “Prohibit ‘Pay for Delay' Agreements to
Increase the Availability of Generic Drugs and Biologics.”

It reads as follows: “The high cost of prescription drugs places a
significant burden on Americans today, causing many to skip doses, split
pills, or forgo needed medications altogether. The Administration proposes
to increase the availability of generic drugs and biologics by authorizing
the Federal Trade Commission to stop companies from entering into
anti-competitive deals, known also as ‘pay for delay' agreements, intended
to block consumer access to safe and effective generics. Such deals can
cost consumers billions of dollars because generic drugs are typically
priced significantly less than their branded counterparts. These agreements
reduce competition and raise the cost of care for patients both directly,
through higher drug and biologic prices, and indirectly through higher
health care premiums. The Administration's proposal facilitates greater
access to lower-cost generics and will generate $11 billion over 10 years
in savings to Federal health programs including Medicare and Medicaid.”

The second subsection is entitled “Modify the Length of Exclusivity to
Facilitate Faster Development of Generic Biologics.”

It reads: “Access to affordable lifesaving medicines is essential to
improving the quality and efficiency of health care. The Administration's
proposal accelerates access to affordable generic biologics by modifying
the length of exclusivity on brand name biologics. Beginning in 2013, this
proposal would award brand biologic manufacturers seven years of
exclusivity rather than 12 years under current law and prohibit additional
periods of exclusivity for brand biologics due to minor changes in product
formulations, a practice often referred to as ‘evergreening.' Reducing the
exclusivity period increases the availability of generic biologics by
encouraging faster development of generic biologics while retaining
appropriate incentives for research and development for the innovation of
breakthrough products. The Administration's proposal strikes a balance
between promoting affordable access to medications and encouraging
innovation to develop needed therapies. The proposal will result in $4
billion in savings over 10 years to Federal health programs including
Medicare and Medicaid.”

By Len Bracken

James Love.  Knowledge Ecology International
http://www.keionline.org, KEI DC tel: +1.202.332.2670, US Mobile:
+1.202.361.3040, Geneva Mobile: +41.76.413.6584,   twitter.com/jamie_love

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