[Ip-health] KEI Statement on Trump Administration Efforts to Raise Drug Prices Internationally

Claire Cassedy claire.cassedy at keionline.org
Fri May 11 11:03:50 PDT 2018

**Re-posting for formatting**

11 May 2016
For Immediate Release

James Love
Email: james.love at keionline.org
Tel.: (202)332-2670
Cell: (202)361-3040

Statement also available via: https://www.keionline.org/27768

Knowledge Ecology International statement on Trump Administration efforts
to force price increases for drugs sold in foreign countries

The following statement can be attributed to James Love, Director, on May
11, 2018.

“The Trump Administration is proposing that the U.S. government advocate
higher drug prices in foreign countries. We’ll have to see the details of
how this effort will be managed, but the overall policy proposal is not
new. Since the Reagan administration, every U.S. president has worked
closely with big drug companies to advocate for broader, stronger and more
durable intellectual property rights for new medicines, regulatory barriers
to competition, and to weaken national efforts to lower drug prices through
restrictions on reimbursements, price controls or other measures. For
example, Presidents Obama, Bush and Clinton all sought similar outcomes,
efforts that are easily documented by merely reading two reports published
annually by the White House Office of the United States Trade
Representative (USTR). These include:

1. National Trade Estimate Report on Foreign Trade Barriers (see below for
examples), and

2. Special 301 Report (see: https://www.keionline.org/ustr/special301 for
all 30 years of these reports).

There is much that can be said about this issue, but the following are the
most critical points.

1. Raising foreign drug prices, as was the result of early NAFTA
negotiations in Canada or the WTO negotiations that lead to the TRIPS
agreement, does not lower US prices. In fact, the higher foreign prices
are, and the harder it is to obtain low cost generics outside the United
States, the easier it will be to charge higher prices in the United States.

2. Raising drug prices here or in foreign markets does in fact enhance
global incentives to invest in R&D for new products. That said, it is not
an efficient way to do so, since companies at best only reinvest a small
portion of revenues in R&D.

3. Governments around the world do not want higher drug prices, they want
lower prices, so influencing foreign drug prices is hard, particularly when
the higher prices lead to larger budget deficits and/or less access, and
contribute to otherwise preventable death and suffering of the countries’
own citizens.

4. The consequence of high drug prices is predictable access barriers,
greater disparities of access (based upon incomes), and abandonment of all
pretense that “access to medicine for all” is actually a goal.

5. A less expensive and more effective way to promote innovation and to
address freeriding is to focus on the low levels of public sector funding
for biomedical research in many countries. Switzerland, for example, is
getting rich off its policy of letting the NIH finance much of the R&D it
licenses from universities and other NIH grant recipients, while providing
very little government funding for biomedical R&D itself.

6. The U.S. government should support rather than oppose new global norms
that would require our trading partners to match the R&D subsidies that the
NIH and other federal agencies provide, as well as the U.S.
government-funded Orphan Drug Tax Credit. This is a way to address
cross-border contributions to R&D without killing people.

We have watched several shifts in policies over the years in regards to
foreign drug prices. The most constant has been the steady collaboration
between the U.S. Congress and the Executive Branch to impose policies on
foreign countries designed to raise drug prices, something that takes place
year in and year out. There have been a few notable exceptions to the
pro-pharma and anti-patient drift of policy, including decisions from 1999
to 2000 by President Clinton on HIV drug patents in sub-Saharan Africa
(following considerable outside pressure from HIV activists), the 2001 Doha
Declaration on the TRIPS Agreement and Public Health, and the 2007 new
trade policy adopted by President Bush which relaxed trade pressures on
some issues. The Obama Administration worked very closely with big pharma
in ways too numerous to mention here, including involvement by Vice
President Joe Biden among others, and the Trump Administration has taken a
hard pro-pharma line on issues, almost immediately.

The whole state of affairs is appalling, given what is known about the
human suffering associated with high and abusive drug prices, and the U.S.
government’s continued opposition to work on an R&D agreement in the World
Health Organization or other fora, and its opposition to work on the
delinkage of R&D incentives from drug prices, measures that would, if
embraced, provide for a more promising future where innovation, access,
affordability and fairness would all be feasible.”

James Love
Email: james.love at keionline.org
Tel.: (202)332-2670
Website: www.keionline.org

Links to USTR Special 301 Reports

See: https://www.keionline.org/ustr/special301

Links to NTE reports

Several available via: https://catalog.hathitrust.org/Record/002061620

Obama Administration:





Bush Administration:





Clinton Administration:

Claire Cassedy
Knowledge Ecology International
1621 Connecticut Avenue NW
Suite 500
Washington, DC 20009
Tel.: 1.202.332.2670

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