Consumer advocates lambasted the White House this weekend after reviewing leaked trade-negotiation documents they say show that a pending regional deal is more generous to drug companies than free-trade agreements passed under former President George W. Bush.
The U.S. is in the ninth round of negotiations relating to the Trans-Pacific Partnership with eight Asian and Latin American countries. Consumer advocates say Obama administration trade negotiators appear willing to give brand-name drugs stronger patent protections and pricing power than a 2007 bilateral trade deal with Peru.
"The leaked text confirms the worst fears of health officials," said James Love, of the nonprofit Knowledge Ecology International. "Obama is now objectively much worse than Bush on these issues."
"The US position in TPP facilitates access to medicines and actually seeks to drive such access in places where it's most needed through new, innovative policy ideas not seen in any previous trade agreement," said USTR spokeswoman Carol Guthrie. The U.S. partners are Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.
A USTR briefing document describes the trade deal as creating a new initiative — Trade Enhancing Access to Medicines — that is "designed … to promote trade in, and reduce obstacles to, access to both innovation and intellectual property protection that is vital to developing new medicines and achieving other medical breakthroughs."
Consumer groups make three broad arguments against the deal: that its patent protections for brand-name drugs are too generous; it gives drug companies new rights to challenge pricing and formularies that public health programs use to keep prices affordable; and it could weaken national regulations.
Lawmakers have also gotten involved.
Last week, the four top House Democrats dealing with trade issues wrote to USTR Ambassador Ron Kirk raising some of the same questions. The letter urges Kirk to adopt generic-friendly policies that would limit a brand-name manufacturer's exclusive marketing rights based on clinical trial data to five years, running concurrently with such protections in the U.S.
"A core objective" of that policy, the letter says, is to ensure that free-trade agreements "do not put patients in poor countries in a position in which they could have to wait longer than patients in the United States to obtain affordable life saving generic medicines."
Brand-name drugmakers want the exclusivity period to begin in each country when approval for a drug is received in that country.
Mark Grayson, a spokesman for the drug lobby Pharmaceutical Research and Manufacturers of America, said the pending deal's "provisions provide a more balanced, practical pathway" than the Bush administration's more generic-friendly deal with Peru. "It also provides the balance between providing access and putting together a climate for innovation."
Jay Taylor, vice president for international issues at PhRMA, said the new deal was "largely based" on the recently enacted pact with South Korea.
"There is nothing in that text that would prevent a country from developing a formulary," Taylor said. "Both the generic and research based pharmaceutical industry have supported efforts to improve transparency and due process in trade agreements."
Not so fast, said Sharon Treat of the National Legislative Association on Prescription Drug Pricing (NLARx).
The leaked documents "would essentially require state agencies and the U.S. government to negotiate prescription drug prices in public," Treat said in a statement, "and to justify deviations from 'market prices' with detailed written explanations, as well as insert multiple levels of appeals into a process that currently does not provide for appeals."
"There are multiple concerns about this proposal from a U.S. state government point of view," Treat added. "Taken together, these provisions will turn the formulary development process into a lawyer's dream with multiple opportunities to challenge state decision-making."
Advocates are also assailing the trade pact's secrecy.
Last week, 22 labor and consumer groups wrote to Kirk urging him to make more negotiation information public.
"While we applaud your efforts to be more inclusive than the previous Administration, particularly with respect to reaching out to Congress and non-business stakeholders, the requested transparency, particularly with regard to Trans-Pacific FTA negotiating texts, has not occurred," the letter says.
UPDATE: This post was updated at 1:55 p.m. with further comment from PHRMA and at 5:40 p.m. with comment from NLARx.