Trans-Pacific Partnership Talks in Lima, Peru Focus Attention on Access to Medicines Issues Disclosed in Leaked Text on Pricing and Patent Policies

NLARx Executive Director Sharon Treat attended the TPPA stakeholder events in Lima, Peru last month and presented on medicines issues at the official forum October 25. The talks include nine Pacific Rim nations, including the US, but could expand to include as many at 22 nations before the ink is dry on a final deal, with Canada, Japan and the Philipines poised to get involved soon, according to US negotiators. Here is a nice roundup on the Peru talksposted by Knowledge Ecology International. While the trade talks haven't received much media attention here in the US, they are a big deal in Peru where health advocates worry that the trade deal will make drugs unaffordable, and in New Zealand, where the national Pharmac program, under which New Zealanders can purchase most drugs for a few dollars a script, is exceedingly popular (see this "Pharmac attack" web posting.) Leaked negotiating text was posted on the Internet during the Lima talks, including texts on healthcare transparency and pricing and intellectual property. The leaked provisions are somewhat similar to the Korea and Australia agreements and raised many concerns among access to medicines groups, state legislators, and even law professors. More For complete leaked text, relevant documents and analysis, we recommend the InfoJustice website as well as Public Citizen's Access to Medicines Campaign. Read Sharon Treat's statement on the leaked text here. NLARx, state legislators and other state officials have raised concerns about both procedural and substantive provisions in the Australia and the Korea FTAs, which include pharmaceutical provisions that could conflict with the effective implementation of Medicaid and reduce access to affordable medicines under 340B and other programs. Although the Australia FTA's pharmaceutical provisions [Annex 2-C] and now the Korea agreement are a done deal, the Trans-Pacific Partnership Agreement is still being negotiated, and thus is still open to change. While state legislators were able to convince the USTR to include a footnote in in the Korea FTA "carving out" Medicaid from its provisions, we continue to have concerns because this carve-out does not include other important programs such as 340B, and because the FTAs would essentially lock the US into the current way of pricing drugs in Medicare Part D and call into question reforms in the Affordable Care Act. From the leaked text, it is impossible to know whether the USTR intends to carve out Medicaid, expand the carve-out to other programs, or delete the carve-out altogether, and the USTR's chief negotiator did not answer a question about the carve-out at the stakeholder briefing in Lima. For more information:Sharon Anglin Treat, NLARx Executive Director207-622-5597streat@reducedrugprices.org

Free Trade Shouldn't Increase the Cost of Medicine

The National Legislative Association on Prescription Drug Prices (NLARx) endorsed a resolution calling on the U.S. to halt the use of trade agreements to enact international disciplines on pharmaceutical pricing programs. The resolution was passed at the Association's winter meeting in Washington, D.C.

NLARx is a nonpartisan, nonprofit organization of state legislators who work on health issues, with a particular focus on prescription drug pricing and access to medicines.

The resolution specifically targets the ongoing negotiation of the Trans-Pacific Partnership (TPP), a plurilateral trade agreement among eight nations. To date, no negotiating text has been publicly released. But the branded drug lobby has requested the inclusion of a chapter in the agreement that would require countries to "appropriately recognize the value of patented medicines" in public drug reimbursement programs and provide appeals for drug manufactures to challenge listing and reimbursement decisions of public health authorities.

As explained in the resolution, public health programs run by states, including the administration of Medicaid drug benefits for over 40 million Americans, use the same types of price restraining preferred reimbursement formularies (known as preferred drug lists, or PDLs) as foreign governments. Many federal programs, including drug programs for Medicare and veterans hospitals, achieve reductions on drug prices through similar preferred reimbursement programs.

"It is not in the best interest of the United States to promote limitations on the types of evidence-based drug pricing used by private companies, U.S. state governments, the U.S. Department of Veterans affairs - and by foreign governments - to control runaway pharmaceutical prices. At a time when health budgets everywhere are strapped, the federal government should not be promoting a new global regulatory agenda that would attack the most effective tools we have to combat excessive medicine prices in our health programs," said Sharon Treat, NLARx Executive Director.

The resolution recounts that these effective programs would be threatened by the kind of new international restraints on pharmaceutical pricing programs that the drug industry seeks:

"Trade Agreements are reciprocal by nature, and state government policies that violate the terms may lead to foreign government retaliation. The federal government may preempt state law thorough international agreements. And proposals to limit the operation of foreign reimbursement programs are likely to lead to increased foreign pressure to limit similarly operating programs in the U.S."

The first trade agreement to include a pharmaceutical pricing provision was the Australia-US FTA. That program required pharmaceutical company participation and appeal opportunities that state officials warned would cripple Medicaid if applied to states. More

The issue came to the fore again with the Korea - US FTA negotiation, during which the U.S. proposed language in the agreement that would prohibit Korea's "positive list" drug formulary. NLARx opposed that language, warning that such proposals would threaten Medicaid programs that use similar preferential purchasing lists to restrain drug prices. More

The USTR has not thus far backed down from its agenda to craft new international restraints on effective drug price controls. In a public statement in late September 2009, for example, Ambassador Kirk expressed his "support" for broadening the discussion of a proposal by Pfizer to promote new international rules that "discipline" pharmaceutical reimbursement programs in the U.S. and abroad.

The NLARX resolution will be transmitted to the USTR and to members of Congress. NLARx officials will meet with the USTR on January 31 to discuss TPP and drug pricing issues further.

For more on this issue, see the Forum on Democracy & Trade and PIJIP.