What the TPP Trade Agreement Could Mean for Drug Prices

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Few of America’s international trade deals attract much public scrutiny. But they should. These agreements can impact domestic jobs and wages (see: NAFTA), or rewrite rules on copyright law, and the negotiations—led by the United States Trade Representative—are carried out in closed door meetings.

Such is the case with the Trans-Pacific Partnership, or TPP, a trade agreement championed by Barack Obama and US corporations that would economically link 12 Pacific Rim countries, or about 40 percent of the world’s GDP. While the deal’s copyright provisions have generated a lot of controversy since the TPP negotiations opened in 2010, what might be even more troubling is the trade agreement’s impact on medicines, life-saving and otherwise.

In secret negotiations, Big Pharma has sought 12- and then eight-year patent monopolies on biologic medicines, or pharmaceuticals derived from living organisms. The eight years would include five years of data exclusivity and another three years for pharmacovigilance, or research into drugs’ adverse effects. If Congress passes TPP and Obama signs it into law (as he surely would), Big Pharma companies wouldn’t have to share information on their drugs for eight years. In other words, for eight years they would be able to block competitors from manufacturing generic drug options.

Doctors Without Borders expressed dismay over what they see as a monopoly provision that will likely raise the price of medicines for millions and delay price-lowering competition.

“The big losers in the TPP are patients and treatment providers in developing countries,” said Doctors Without Borders’ Judit Rius Sanjuan, US Manager & Legal Policy Adviser, in an official statement. “Although the text has improved over the initial demands, the TPP will still go down in history as the worst trade agreement for access to medicines in developing countries, which will be forced to change their laws to incorporate abusive intellectual property protections for pharmaceutical companies.”

The Pharmaceutical Research and Manufacturers of America (PhRMA), a group that lobbies on behalf of the industry, was also dismayed. They believe the only way to innovate biologic medicines is through corporate monopoly.

“We are disappointed that the Ministers failed to secure 12 years of data protection for biologic medicines, which represent the next wave of innovation in our industry,” said PhRMA President and CEO, John Castellani in an October 5 statement. “This term was not a random number, but the result of a long debate in Congress, which determined that this period of time captured the appropriate balance that stimulated research but gave access to biosimilars in a timely manner.”

The greater lesson of TPP? If people want to see a playbook for how the free market is rigged to be not-so-free, then this trade agreement just might be it.