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Friday, September 16, 2011

Why is U.S. Trade Policy Reducing Access to Pharmaceuticals?

Pharmaceutical pricing and intellectual property issues have been front-and-center in the debate over the Korea-US free trade agreement under consideration by Congress, as well as in the Trans-Pacific Partnership Agreement (TPPA) still under negotiation. In past years, NLARx and member legislators raised concerns about both the Australia and the Korea trade agreements, which included pharmaceutical provisions that could have conflicted with the effective implementation of Medicaid and reduced access to affordable medicines. In January 2011, NLARx adopted aResolution opposing these provisions in the TPPA.

On September 10 in Chicago, NLARx Executive Director and Maine Representative Sharon Treatpresented on the potential impact of the TPPA on access to affordable medicines in the US. Concerns included conflicts with the usual procedures followed by states and the federal government in Medicaid, 340B and Part B of Medicare, delayed access to generics, conflict with provisions of the Affordable Care Act, and locking the US into high market-based pricing of pharmaceuticals in the future. Similar concerns were raised by Vermont Governor and NLARx co-founder Peter Shumlin in a letter to President Obama. See Pharmalot storyquoting Rep. Treat and Prof. Sean Flynn's analysishere.

In the TPPA, according to an analysis of leaked textand analysis of a rather general public medicines white paper that was issued this week by USTR, the US has proposed provisions that would extend monopoly rights of pharmaceutical companies; would remove safeguards that allow patent applications to be challenged before they are granted; would allow patents to be granted for minor variations to existing drugs; and would provide extra rights for pharmaceutical companies in court.

The pharmaceutical industry is also lobbying for further restrictions on the use of clinical trial data by the manufacturers of generic medicines seeking to register their generic versions - turning to secret trade deals to prop up profits as their blockbuster drugs go off patent. Secret cables leaked by WikiLeaks confirm the industry's hands-on approach to USTR on these issues.

The Center for Policy Analysis on Trade and Health(CPATH) and other public health experts have called on trade officials to reverse course and protect health. CPATH's research established that intellectual property rules in the Central American Free Trade Agreement (CAFTA) raised medicine prices in Guatemala by up to 856%. The Austrialia-U.S. Free Trade Agreement authorized drug company intrusions into Australia's cost-effective drug purchasing system, resulting in increased prices for statins.

The US is also seeking investment provisions in the TPP agreement that would expose governments to legal action by foreign companies if governments introduce policies (including policies to protect public health) that affect these companies' profits. Similar trade provisions are the basis for a legal challenge by Phillip Morris to Uruguay's tobacco packaging warning label rules.

All of this is cause for real concern, and NLARx has called on USTR to act now to safeguard access to affordable medicines. Read more about trade agreements and pharmaceutical policy.