Trade Deals Don’t Deliver on Drug Provisions: Analysis
Researchers from Harvard Medical School and the Council on Foreign Relations say that recent trade deals containing protections for the drug industry have not always delivered benefits to Americans promised in return for the greater pharmaceutical protections. Writing in the New England Journal of Medicine, the researchers say the 1994 North American Free Trade Agreement was the first to include a chapter dedicated to intellectual property rights, including those related to pharmaceuticals. The authors say the pending United States-Medico-Canada Agreement (USMCA) “once again breaks new ground in expanding protection for brand-name pharmaceutical manufacturers, this time by requiring member nations to provide 10 years of data exclusivity to new biologic agents — a longer time period than any other U.S. trade agreement has mandated.”
“The inclusion of pharmaceutical provisions in trade deals has a mixed record in delivering on its goals,” the analysis says. “One the one hand, the pharmaceutical industry has been among the most profitable in the United States and directly employs hundreds of thousands of Americans, including in research, development, and marketing. On the other hand, drug companies have increasingly shifted their manufacturing and ownership of their patents abroad to low-tax countries so as to avoid paying U.S. taxes…. Although most U.S. free-trade deals are more than a decade old, they do not yet appear to have raised other countries’ drug prices close to those in the United States, and they certainly have not resulted in Americans paying less for brand-name medicines.”
The researchers point out that even though trade deals have offered the industry increasing levels of protection, it has opposed three of the last four agreements for not going far enough in advancing its interests. However, it has not opposed the USMCA and its extended protection for biologics. The authors say the Trans-Pacific Partnership negotiated by the Obama administration would have mandated either five or eight years of data exclusivity for biologics, depending on the member nation’s market circumstances. The USMCA would include 10 years of protection. “This provision would force Canada and Mexico to lengthen their own exclusivity periods for new biologics by two years and five years, respectively, delaying market entry of future biosimilars,” the researchers write. They say the agreement also would bind the U.S. to granting 10 years of exclusivity to new biologics. While current U.S. law provides 12 years of protection, the Federal Trade Commission and some lawmakers have questioned the need for that much protection.
“Americans and their representatives are ignoring history if they expect the inclusion in the USMCA of longer exclusivity for biologics to redress the U.S. trade deficit, loss of manufacturing jobs, and high prescription drug prices,” the article concludes.