US trade policy could raise drug prices, at home and abroad

At the turn of the century, millions were dying because pharmaceutical companies priced AIDS drugs far beyond people’s ability to pay. The Office of the United States Trade Representative (USTR), to our nation’s shame, pressed countries like South Africa and Thailand to protect drug company monopolies, rather than people’s lives. 

Treatment activists rebelled and inspired a global response. Generic competition reduced prices by ninety-eight percent. President George W. Bush built an AIDS relief program on affordable generics. The ensuing treatment revolution has saved ten million lives. The United States put public health needs ahead of pharmaceutical industry profits and made a transformative contribution to global health.   

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Now we are backtracking. Even as we reduce budgets for U.S.-led global health programs, our trade policy would raise future health care costs at the expense of people’s access to needed medicines, not only for HIV, but for cancer, heart disease and many other deadly conditions. The same trade rules would constrain our ability to improve treatment access in the United States. 

The Washington Post’s recent editorial about the proposed Trans-Pacific Partnership (TPP) dismissed that human cost without seeming to understand it. Contrary to The Post’s assertions, the administration’s proposals for this trade pact – including rules for patents, medical test data, pharmaceutical reimbursements and investment – would in fact “change the status quo dramatically.” The proposals go further than previous trade agreements in the breadth of their powers to exclude generic competition and otherwise raise costs. 

For example, many new cancer treatments are biologic drugs priced at more than $100,000 per year. With lobbying and millions in election spending, the drug giants got inserted into the Affordable Care Act measures that block the U.S. sale of cost-reducing competition for biologics for 12 years. The rule is unprecedented for most TPP countries and would put patients’ lives at risk. 

Each additional year of exclusivity costs Americans many billions of dollars. The President’s budget proposes to reduce this monopoly period to seven years. The Federal Trade Commission found no need for a special monopoly period to finance biotech innovation. 

Despite that, in the closed-door TPP negotiations, the USTR is pushing for the 12 years monopoly. If the TPP is adopted with a biologics rule, any future action by Congress to reduce the monopoly period for Americans would effectively be foreclosed.  

Medical illnesses and drug prices are the leading cause of personal bankruptcies for Americans. All of this is in the richest country on earth. For developing countries, including those negotiating the TPP, the consequences of high drug prices are even more severe. Cost-sensitive public programs will have to ration cancer drugs, or not offer them at all. People will suffer and die. 

Even if widespread opposition from other countries forces the USTR to reduce its proposed biotech monopoly period, a TPP rule would tie the hands of Congress and hurt people abroad. Every year of exclusivity matters, because people who are sick cannot wait an extra year for medicine. 

Moreover, the supposed health compromise referenced by The Post, to mitigate harms for poor countries like Vietnam, applies to only a few of the rules under discussion, is only a transitional measure and ignores the impacts of higher costs on U.S. consumers.  All countries, including those that might join the TPP in the future, would be expected to adopt all damaging proposed rules. 

The USTR’s patent and investment proposals are highly unpopular with our trading partners. They have nothing to do with “free trade”; they are protectionist in the worst sense, in that they require governments to protect the pharmaceutical industry from competition. Yet the USTR clings to these demands which are so lucrative for the pharmaceutical lobby. 

Trade policies negotiated in secret should not be allowed to undermine our global health work or the opportunity to reduce costs at home. The TPP proposals illustrate why Congress must not abdicate its constitutional authority over trade policy through a “fast track” process. We know from history the terrible cost in human lives from trade policies that enshrine and enhance drug company monopolies. We must not replicate that tragic mistake. 

Schakowsky has represented Illinois’ 9th Congressional District since 1999. She sits on the Energy and Commerce Committee. Maybarduk is director of Public Citizen’s Global Access to Medicines program.