Millions of Americans daily rely on medicines of all kinds to manage health conditions. And while we tend to think of healthcare only in the context of our personal experience and national perspectives, our healthcare is impacted by international policies as well.
Indeed, a proposed international trade agreement, known as the Trans-Pacific Partnership (TPP), will affect the way some 800 million people around the world take their medicine by limiting access to safe and affordable prescription drugs. The generic industry supports balanced trade agreements that promote competition and access to affordable medicines.
Instead, the United States must promote balanced intellectual property provisions that support investment in innovative drugs while also ensuring that generic versions are available as soon as possible after the expiration of patent terms. This balanced approach will ensure that generic manufacturers in the United States are able to increase exports and add jobs to the U.S. economy by making generic drugs available to its trading partners.
Government officials often refer to the TPP, which the United States is negotiating with 11 other Pacific Rim countries, as being an “ambitious” trade negotiation that seeks to respond to the needs of the 21st century. When it comes to medicines, however, the TPP does not begin to live up to that description.
An “ambitious” TPP would strive to increase access to medicines for the citizens of the 12 countries subject to the agreement. Yet, by pursuing patent provisions that extend brand-name drug monopolies, the current TPP will deprive nearly 800 million people timely access to safe and affordable medicines. An “ambitious” TPP would reduce, not grow, national healthcare budgets.
Yet, the current TPP would make it harder for all 12 governments, including that of the United States, to contain costs. An “ambitious” TPP would support U.S. exports of all medicines, brand-name and generic, and support the continued growth of vibrant industries. Yet, this TPP would only support brand-name pharmaceutical exports, at the expense of generic drugs.
In the United States, generic drugs have been a rare bright spot in a trend of rising health costs. Indeed, the world’s leading healthcare analytics firm, IMS Institute for Healthcare Informatics, found that generics saved $239 billion in 2013 (a 14 percent increase in savings from 2012) and more than $1.46 trillion over the recent decade.
Today, generics are also a major economic driver, employing more than 60,000 people in 31 states. Generic-drug manufacturers have become major exporters whose future growth rests on their ability to sell their products to other nations.
However, this success results from a domestic generic utilization rate of 86 percent. To continue to generate savings, growing and creating new jobs, this industry must have access to overseas markets.
Unfortunately, the current TPP discussions do not reflect today’s robust, competitive pharmaceutical marketplace, which any trade agreement should support and encourage.
Further, the current discussions could hinder our trading partners’ efforts to confront such worldwide epidemics as HIV/AIDS, malaria, tuberculosis and cancer.
Broadening the scope and duration of the protection granted to brand-name pharmaceuticals undermines access to much-needed generic medicines to treat these and many other diseases. It also undermines innovation, which rests on competition from generics.
This makes it more difficult for countries from Japan to Peru to control their healthcare budgets, which, as in our own country, are growing exponentially. This, in turn, makes them less effective trading partners for the United States.
If we want a truly “ambitious” TPP agreement for medicines, the United States government must adjust its proposals to reflect current realities by striking a balance that promotes both innovation and competition.
There is a model that works: the Peru, Colombia and Panama free trade agreements, which reflect the bipartisan “May 10th Agreement” struck between the George W. Bush administration and Congress in 2007. This approach, while expanding intellectual property protections, also restored some balance to United States trade policy by ensuring access to generic medicines.
By basing the TPP’s intellectual property provisions on the Peru, Colombia and Panama model instead of the extreme and unbalanced model it now favors, the U.S. could maximize the export of all pharmaceuticals, allow hundreds of millions of people increased access to safe and affordable medicines, improve the world’s economy by reducing healthcare budgets, and support jobs and economic growth here at home.
I call upon our U.S. negotiators and our future trading partners to negotiate a final TPP agreement that reflects this balanced approach to pharmaceutical intellectual property and ensures access to medicines.
Neas is president and CEO of the Generic Pharmaceutical Association (GPhA).