[Ip-health] The Hill: Pharma flap imperils president’s trade deal

Thiru Balasubramaniam thiru at keionline.org
Tue Oct 20 07:43:23 PDT 2015


“The president wanted to try to explain how they did the work and the
companies still believe we need to get 12 years,” said Grayson, the PhRMA
spokesman. “They told the president the companies still need the 12 years.”



Pharma flap imperils president’s trade deal

By Sarah Ferris - 10/20/15 06:00 AM EDT

The most important trade deal of Barack Obama’s presidency could hinge on a
single provision that’s reigniting a years-old debate on monopoly rights
for drugmakers.

The exact details of the pharmaceutical provision, which involves a class
of drugs called biologics, won’t be made public until later this month.
Still, it’s already threatening to drag out — and possibly derail — the
approval process for a deal reached by a dozen nations that together make
up 40 percent of the world’s gross domestic product.

Under the Trans-Pacific ­Partnership, pharmaceutical companies could get up
to eight years of exclusive rights to their clinical trial data, compared
to 12 years currently in place in the U.S, five years in Australia and
little to none in developing nations.

American drugmakers were intent on preserving the existing standard in a
final deal.

“They were supposed to come back with U.S. law on [intellectual property]
rights, and they didn’t, and our board is very disappointed,” said Mark
Grayson, a spokesman for PhRMA, which represents dozens of top
pharmaceutical companies.

The U.S. pharmaceutical industry is now in a standoff with the Obama
administration, searching for a playbook in its effort to keep Congress
from ratifying the deal next year. Because the deal will be considered in
an up-or-down vote, a vote in favor of PhRMA would mean a vote against the
entire deal.

“I think everybody’s still figuring out what’s next. We’ll look at the rest
of agreement, then decide what the next steps are,” Grayson added.

As the Obama administration prepares to hand over a copy of the deal to
Congress this month, all eyes will turn to Sen. Orrin Hatch (R-Utah), who
led the fight this spring to pass the bill giving Obama fast-track trade
authority.  As Finance Committee chairman, Hatch wields considerable power
in approving the deal when it comes up for a vote early next year. But he
has been sharply critical of what he has seen, including the pared-down
monopoly protections for drug companies.

“What’s going to happen is that a lot of companies are just going to go out
of business because they cannot recoup the monies,” Hatch told NPR three
days after the deal was struck. “Everybody would like lower drug costs, but
the drug costs are going to skyrocket.

Biologics, described as the next frontier of pharmaceuticals, are among the
most complicated and expensive types of drugs to produce. Companies have
said it takes between 12.9 years and 16.2 years to break even on the costs.

The drugs also hold life-saving potential that remains out of reach for
many populations outside the United States’.

The biologics provision is drawing criticism from all sides: It’s been
condemned both by Republicans siding with Big Pharma and Democrats
advocating for global health groups that want to end monopoly rights

Democratic presidential front-runner Hillary Clinton singled out
pharmaceuticals when she declared her opposition to the deal last week,
warning that drug companies “may have gotten more benefits, and patients
and consumers fewer.”

Obama can only afford to lose support from a handful of lawmakers from the
GOP, a party has been reliably pro-­pharma over the years.

The powerful lobby spends about $10 million a year, not including campaign
contributions. During the last election cycle, the biggest recipient of
PhRMA cash was Senate Majority Leader Mitch McConnell (R-Ky.), according

Hatch is already warning that the trade deal is losing support in the
Senate. Though the trade vote cannot be filibustered and supporters need
only a simple majority to pass it, the potential losses could threaten the

“I’ve heard some very trying things that may very well make it impossible
to pass,” Hatch said last week, pointing to lawmakers representing dairy
and tobacco industries who are beginning to walk back their support. “We
passed it with 62 votes. We’re already starting to lose those.”

Drugmakers’ exclusivity rights have been one of the biggest sticking points
for trade ministers during the years-long process of crafting the trade
deal. As negotiators worked out the final details in Atlanta earlier this
month, they twice had to extend their stay because of disagreement over the

“That was one of the issues that broke down the agreement in Hawaii and
that was for sure the last issue remaining on the agenda in Atlanta,” said
Judit Rius Sanjuan, a legal policy adviser for Doctors Without Borders who
was in Atlanta to await the deal.

“It was highly contentious. I think that was the potential for the whole
agreement to fail if the government had agreed to what they agreed,” she

It’s also a fight Obama’s familiar with— after a drawn-out fight in 2008,
his administration agreed to 12 years of exclusivity during the crafting of
the Affordable Care Act. The administration said then that seven years
would be a “generous compromise.”

Since striking the deal last week, the president has personally tried to
court the powerhouses of the pharmaceutical industry by inviting a
coalition of CEOs to the White House last Thursday.

That group included Merck chief and PhRMA Chairman Ken Frazier and Biogen
CEO and PhRMA Chairman-elect George Scangos. Both companies declined to
comment, deferring to PhRMA.

After the executives walked out, they said Obama’s remarks did not break
the stalemate.

“The president wanted to try to explain how they did the work and the
companies still believe we need to get 12 years,” said Grayson, the PhRMA
spokesman. “They told the president the companies still need the 12 years.”

More information about the Ip-health mailing list