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Sunday, July 7, 2013

Pharmaceutical Prices and Patents Impacted by Trade Policy

The federal government is currently negotiating two trade deals that could have great significance for drug pricing. Negotiations for the Trans-Pacific Partnership (TPP) have been ongoing for several years and the Obama Administration is seeking to wrap up the 11-country deal by the end of 2013. While the agreed-to text of the TPP is secret, leaked negotiating offers and past experience with similar treaties with Australia and Korea, as well as recent cases under NAFTA, raise big concerns.

The TPP as well as the Trans-Atlantic partnership, which begins negotiations next month, will likely contain provisions that would empower foreign pharmaceutical corporations to directly attack our domestic patent and drug-pricing laws in foreign tribunals. Already under NAFTA, which does not contain the new rules proposed for TPP, drug firm Eli Lilly has launched such a case against Canada, demanding $100 million for the government's enforcement of its own patent standards - see Fact sheet on NAFTA patent case. In Australia, where a trade agreement similar to what is proposed in the TPP has regulated drug pricing for several years, a recent report shows price hikes as a result. Read more on Australia's experience and the public health community's concerns about the TPP here. Closer to home, the Maine Citizen Trade Policy Commission's 2012 assessment of trade impacts focussed on the potential that the TPP would increase drug prices generally and limit the operation of state Medicaid and other programs that negotiate or set reference prices. See also NLARx Executive Director Sharon Treat's analysis of the leaked text and its implications for state medicaid programs.

What can state legislators do? Get involved! Call your members of Congress and ask if they have reviewed the TPP text and understand the implications. Likely, they have not as the text is kept under wraps and only recently has at least one member - Congressman Alan Grayson - been able to read it. Here is a resolution adopted by NLARx in 2011 on trade and pharmaceutical policy; it remains relevant and could be a model for resolutions in state legislatures.