[Ip-health] NYT: Utah Senator, Crucial Ally for the Pacific Rim Trade Deal, Is Now Its Main Hurdle

Zack Struver zack.struver at keionline.org
Fri Nov 13 08:46:08 PST 2015


Utah Senator, Crucial Ally for the Pacific Rim Trade Deal, Is Now Its Main

WASHINGTON — Senator Orrin G. Hatch, with his long record of promoting
trade, was a natural and crucial Republican ally for President Obama
earlier this year, helping him conclude negotiations among 12 Pacific Rim
nations on the largest regional trade accord in history.

But now that the deal is done, another longstanding record of Mr. Hatch’s —
as perhaps the pharmaceutical industry’s single biggest advocate on Capitol
Hill — has helped turn him into the principal impediment to Congress’s
approval of the legacy-making agreement in Mr. Obama’s final year.

In a vast deal covering myriad goods and services, Mr. Hatch is objecting
to language that would limit brand-name drug makers’ monopoly protections
abroad for their new, cutting-edge medicines known as biologics. In recent
days he went so far as to call for the agreement to be renegotiated, during
a speech at the U.S. Chamber of Commerce, which backs the accord.

Now all sides are mulling whether Mr. Hatch’s remarks are a potentially
fatal blow to Mr. Obama’s chance of winning Congress’s approval of the
Trans-Pacific Partnership, or just the latest legislative bluff in a long
line of them from the wily, deal-making senator, intended to extract
advantage elsewhere.

“At the end of the day,” Mr. Hatch said at the chamber, within view of the
White House, the administration “may need to go back to the negotiating
table and try again.”

The administration was quick to reject that idea as impossible for a deal
among a dozen nations. Separately, Japan’s minister ruled out a do-over,
calling the pact a “glass ornament” that would break if reopened.

Yet Mr. Hatch’s words matter. The 81-year-old senator from Utah next year
will celebrate the 40th anniversary of his first election (a contest in
which Mr. Hatch successfully argued that the 20-year incumbent should be
“called home” for staying too long), and he has risen to president pro
tempore of the Senate.

More important to the fate of Mr. Obama’s legacy-making accord with Japan
and 10 other nations, he also is chairman of the Finance Committee, which
has jurisdiction over trade. Without his support, the pact cannot even
reach the Senate floor for a vote.

In June, Mr. Hatch, who was unavailable in recent days for further comment,
according to his office, co-authored the legislation that granted Mr. Obama
so-called fast-track authority to expedite congressional action on a deal
with the Pacific Rim trading partners. He then shepherded that bill to
Senate passage.

By giving that power to the president, and denying itself the ability to
amend or filibuster the accord, the Republican-controlled Congress helped
persuade the other nations to conclude years of talks. Trade promotion
authority, as fast-track is officially known, gave America’s trading
partners greater confidence that Mr. Obama could secure Congress’s approval
without deal-breaking changes.

But the nations’ differences over patent protections for drug makers were
the last to be settled during the trade ministers’ final round of talks
last month in Atlanta. Once the full agreement was announced, Mr. Hatch
quickly complained that Mr. Obama’s trade representative, Michael B.
Froman, had capitulated by accepting a drug compromise that would give
companies a minimum five to eight years of exclusive rights to their
biologics data before it becomes available for development of lower-priced
generic drugs and vaccines.

The Obama administration and the pharmaceutical industry had wanted 12
years of monopoly protection, as provided in the United States under
federal law. They argued, and so does Mr. Hatch, that because the newest
breed of medicines are expensive to develop, only extended protection of
the drug manufacturers’ data can ensure that they will continue investing
in such ventures.

Privately, even some industry representatives concede that the United
States had little choice but to compromise. Nearly every other country
opposed its stance on biologics, which are made from living organisms and
believed to hold promise against cancer and other serious illnesses. At
stake was the rest of the accord, which would eliminate thousands of
tariffs and trade barriers for American exporters in a growing market
extending from Canada to Chile, and Australia to Japan.

That seemed immaterial to the man who for nearly four decades has been
known for his support of the pharmaceutical industry — and its support for

Since 1990, Mr. Hatch has received more contributions from the
pharmaceutical and health products industry than any other member of
Congress — $2.3 million — according to the Center for Responsive Politics,
a nonpartisan group that tracks political money and lobbying. No other
industry accounts for a bigger share of his fund-raising.

When Mr. Hatch faced a re-election threat in 2012 from a more conservative
Utah Republican, a “super PAC” formed to back him, and the bulk of its
money, $750,000, came from the Pharmaceutical Research and Manufacturers of
America, or Phrma, the lobbying group for American drug companies.

Federal tax documents show that for years the drug lobby has also
contributed $40,000 annually to the Utah Families Foundation that Mr. Hatch
and his wife, Elaine, founded in 1990 to aid groups that work with the
needy. Individual drug companies including Merck, Allergan, Lilly and Amgen
have given tens of thousands of dollars more.

As a candidate for the 2000 Republican presidential nomination, Mr. Hatch
used a Gulfstream jet owned by Schering-Plough. His son Scott Hatch, a
lobbyist, has represented the drug lobby and individual drug companies, and
there has long been a revolving door between his Senate office and the
industry for employees.

“One minute they’ll be working for Hatch and the next thing we know, we
find out they’ve taken a job at Phrma or at some company,” said James Love,
a director of Knowledge Ecology International, a nonprofit that serves as
an advocate for the poor and has often opposed Mr. Hatch’s efforts for drug
companies, including on the biologics issue.

Over the decades, Mr. Hatch has co-sponsored a number of laws governing the
drug industry, working to protect its financial incentives in compromises
with Democrats seeking more regulation and lower prices.

In the early 1980s, after opposing legislation first to encourage
production of so-called orphan drugs, which were for rare conditions and
thus costly, and then to promote lower-cost generic drugs, Mr. Hatch
compromised in both instances to co-sponsor what are landmark laws with
Representative Henry A. Waxman, a liberal Democrat of California.

“I have a great deal of respect and affection for Orrin Hatch,” said Mr.
Waxman, who retired this year. “What we tried to do, and what we did do, is
to develop a balanced approach.” But he added, the balance has tipped to
the drug makers’ favor, “and it’s led to less competition and higher drug

Mr. Hatch has also helped keep the dietary supplements industry largely
unregulated. In the 1990s, that put him in conflict with David A. Kessler,
the commissioner of the Food and Drug Administration who was named by
President George Bush and kept on by President Bill Clinton — and who had
been a very junior aide to Mr. Hatch years before.

“He fiercely opposed me on dietary supplements, but he was always
respectful,” Dr. Kessler said. To this day, “we fundamentally disagree”
about the 1994 law that Mr. Hatch won on dietary supplements. But, Dr.
Kessler added, “He had the votes.”

Zack Struver, Communications and Research Associate
Knowledge Ecology International
zack.struver at keionline.org
Twitter: @zstruver <https://twitter.com/zstruver>
Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428

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