The Korea-US Free Trade Agreement (FTA) and Australia-US FTA included provisions for the first time that directly addressed drug pricing for reimbursement purposes by government health programs like Medicaid. These provisions were applicable to the U.S. as well as our trading partners, but a footnote in the Korea agreement, which was strongly advocated for by NLARx and governors in several U.S. states, clarified that Medicaid rebates would not be affected by these provisions. Now the U.S. government is involved in negotiations over the 9-country TransPacific Partnership or TPP trade deal (soon to be 11 countries), and similar provisions have been proposed. These provisions are being advocated for by PhRMA and the biomedical and medical device industries, and would limit how effectively governments can negotiate prices. Once again, NLARx and a number of states have objected to this languagewhich seems intended to drive drug prices ever higher, and which also includes provisions that raise safety concerns. Although the US government has indicated an interest in again "carving out" Medicaid, state legislators worry that other safety net programs such as 340B will be caught in this net.
There are some useful new materials to help understand this issue. At the NLARx meeting in Burlington, Executive Director Sharon Treat presented on the TPP issues. In addition, a recent report commissioned by the Maine Citizen Trade Policy Commission analyzed the potential impact of these pharmaceutical provisions on the Maine Medicaid program, and other states would be similarly affected. Finally, although not limited to pharmaceutical issues, a resolution finally passed July 15 by the NCOIL International and Executive Committees calls for more consultation with state legislators and greater transparency in the TPP and other trade negotiations.
