Democrats declare victory for eliminating drug protections in trade deal
House Democrats are taking a victory lap after getting rid of controversial protections for biologic drugs in the new North American trade agreement.
House Democrats and the White House on Tuesday announced a deal on a trade pact to update the North American Free Trade Agreement (NAFTA), securing a major legislative goal for both Democrats and President Trump.
The final version of the deal does not include a provision that would have locked in 10 years of patent protection for biologic drugs, which are made from living organisms rather than synthetic chemicals.
Democrats said the provision would have contributed to high prescription drug prices, and insisted on changing it before supporting the deal.
“We now have a new and improved renegotiated NAFTA that prevents Big Pharma from raising the price of prescription drugs across the United States, Mexico and Canada,” Rep. Jan Schakowsky (D-Ill.) said during a press conference.
Democrats argued that removing the protection language preserves Congress’s ability to change current law without being bound by the constraints of the trade deal. In the U.S., biologics are protected from generic competition for 12 years.
“The Trump administration tried to tuck in big corporate gifts to Big Pharma. This trade bill would have tied Congress’s hands and prevented us from enacting legislation … But that provision is now out of the trade deal. It is gone,” Schakowsky added.
The change is a major shift in Republican priorities, and a significant blow to the pharmaceutical industry.
Rep. Greg Walden (Ore.), the top Republican on the House Energy and Commerce Committee, said he thinks Republicans would have preferred the protections to remain in the final agreement, but will accept the compromise.
“I think most Republicans are ready to vote for USMCA pretty eagerly,” Walden told reporters Tuesday. “I don’t blame people for being upset about it, but it’s probably not enough to upend it. I think overall, getting USMCA done, even if you have to have a few hiccups along the way, is better for the country.”
Rep. Kevin Brady (R-Texas), ranking member of the House Ways and Means Committee, told CNN in an interview that he had “strongly urged” the administration to keep the patent protection provision intact.
“Clearly that was a compromise Ambassador Lighthizer reached with Democrats,” Brady told the network, but added that he thinks removing the provision completely is a better option than lowering the number of years of protection, because the companies still have 12 years under current law.
Democrats took control of the House in part by campaigning on lowering drug prices, and one of the legislative solutions eyed by House progressives is a bill that would lower the exclusivity period of biologics to seven years.
The trade deal leaves open the possibility that lawmakers will try to have that fight later next year.
Biologic drugs make up a small portion of prescriptions but can cost thousands of dollars. They are one of the main drivers of drug spending in the country and have little competition.
The industry argues that a lengthy protection period, like the one already in current law, allows companies to recoup the significant research and development costs in bringing new drugs to market.
Stephen J. Ubl, president and CEO of the Pharmaceutical Manufacturers of America (PhRMA), said the deal “puts politics over patients.”
Ubl said eliminating the biologics provision “removes vital protections for innovators while doing nothing to help U.S. patients afford their medicines or access future treatments and cures … We cannot support abandoning provisions that protect American companies and raise standards abroad.”
Jim Greenwood, president and CEO of the Biotechnology Industry Organization, said the trade deal leaves American companies unprotected.
“Small U.S. biotechnology companies depend on their government to protect them in global markets and to ensure a level playing field. Today’s announcement declares open season on these innovators and sends a clear message that the U.S. government will stand idly by while foreign entities attack American intellectual property,” Greenwood said.