[Ip-health] FT: As Pacific trade deal is signed pharma holds key to US ratification

Thiru Balasubramaniam thiru at keionline.org
Thu Feb 4 21:19:14 PST 2016


February 4, 2016 5:31 pm

As Pacific trade deal is signed pharma holds key to US ratification

Shawn Donnan in Gaithersburg

US President Barack Obama’s plan to get a vast Pacific Rim trade deal
through Congress this year is taking flak from the presidential campaign
trail, where disdain for the pact appears to be one of the rare unifying
themes for almost everyone from Donald Trump to Hillary Clinton.

But a more immediate obstacle to the Trans-Pacific Partnership signed by
the US, Japan and 10 other countries on Thursday lives in Jan Kemper’s
laboratory an hour’s drive from the White House. It can be found in the
finicky Chinese hamster ovary cells in the glucose-rich sludge at the
bottom of bioreactor BRX-099 — part of a biological assembly line for a new
generation of drugs to fight everything from asthma to cancer.

“Cells get very cranky when they don’t get enough sugar,” says Ms Kempner,
a researcher. “Just like people.”

The cells are part of biotech company Medimmune’s research and development
programme for medicines known as biologics — complex molecules built out of
biological material rather than chemicals, like most traditional drugs.
They represent the cutting edge of treatment for all manner of diseases and
a future that the pharmaceuticals industry is betting on. Biologics now
make up half the pipeline of medicines being developed by parent
AstraZeneca, which bought Maryland-based Medimmune in 2007.

What makes them a threat to Mr Obama’s efforts to get the TPP, which covers
40 per cent of the global economy, through a Republican-controlled Congress
is that key GOP leaders such as Utah Senator Orrin Hatch, chairman of the
Senate Finance Committee, do not like the intellectual property protections
his administration negotiated for biologics in the TPP. They have vowed to
block ratification until something changes.

US law calls for 12 years of exclusivity for biologics, something
Washington sought to have replicated in the TPP. But, backed by campaign
groups such as Médecins Sans Frontières who argue that such long periods
help inflate drug prices by preventing generic competitors, Australia, Peru
and other countries pushed for a five-year period. Under a fudge reached at
the end ofmarathon negotiations in Atlanta in October, the deal eventually
called for a period of either five or eight years depending on

The compromise drew the ire of the pharmaceuticals industry, which has been
lobbying heavily since for a change. It managed to have a caveat added to
endorsements of the TPP from major business groups in recent weeks, who
have urged the administration to resolve “outstanding issues” with

Trade is a good thing. But trade has got to be fair. And the TPP is
anything but fair

Bahija Jallal, Medimmune’s top executive, says it takes an average of 10
years to bring a biologic to the market, and without intellectual property
protections the incentives to pour millions into research are not there.

“Someone didn’t just wake up and say 12 years,” she says. “There is solid
research behind that.”

Administration officials insist they will not renegotiate the TPP, which
took five years of discussions to get done. But they have begun talks with
members of Congress that are set to intensify in the coming weeks.

“I’m confident at the end of the day because of the strong benefits to the
US economy . . . that members of Congress will see the benefits for their
constituents, and we’ll have the necessary bipartisan support to be
approved,” Mike Froman, the US trade representative, told reporters at the
TPP signing ceremony in New Zealand on Thursday.

Transpacific ambivalence

In TPP deal, what’s good is very good and what’s bad is very bad

The goal, officials say, is to find another compromise with Congress in the
coming weeks that would allow the TPP to be presented for ratification as
soon as May or June, a plan already complicated by the fact that Mitch
McConnell, the Republican leader who controls the Senate, does not think
the trade deal should be voted on until after November’s presidential

Possible solutions suggested by administration officials range from a
promise that future trade deals would include a longer exclusivity period
to a simple promise not to pursue any change in the 12-year period now in
US law.

Any pledges the Obama administration makes now are complicated by the fact
that the president has less than a year left in office and both Democrats
and Republicans running to succeed him are sceptical of the TPP.

“Trade is a good thing. But trade has got to be fair. And the TPP is
anything but fair,” says Bernie Sanders, the Vermont Senator challenging
Mrs Clinton from the left for the Democratic Party’s presidential
nomination. Among the reasons for his opposition: “Skyrocketing drug

US business groups insist a deal will be done and that the TPP is more
likely than not to be ratified before Mr Obama leaves office in January
2017. “I’m very confident that they are going to work this out,” says John
Engler, who heads the Business Roundtable.

But for Mr Obama, his economic legacy, the TPP and the Chinese hamster
cells in Medimmune’s bioreactors there are still significant hurdles to get
over in the months ahead.

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