The Trans-Pacific Partnership discussions are coming to a head. United States Trade Representative Michael Froman, President Obama’s principal advisor and spokesperson on international trade issues, is anticipating a vote on this leviathan trade pact by the end of the summer, and possibly as early as the end of the month.
Because of fast-track legislation, when Congress votes on the TPP, it will be an up or down vote, with no opportunity to modify the language or amend specific provisions. TPP advocates are excited by the increased prosperity that implementing this trade pact could generate, including an estimated boost of $285 billion in real incomes in the TPP member countries by 2025 -- a 1% gain that will continue indefinitely.
How TPP could hurt its citizen-members
However, after more than six years of intense debate, face-to-face discussions and behind-the-scenes negotiations, there are still several hotly debated and contentious (leaked) provisions in the TPP, including many of the intellectual property provisions -- specifically provisions related to patent linkage, biosimilars and the integrity of the Hatch-Waxman Act.
There are many issues, but the most prominent in this battle is patent linkage -- the system or process by which a country links drug-marketing approval to the status of the patent or patents corresponding to the originator's product. For GPhA, the concern with linkage is that the USTR would put a system in place that would have all of the patent protections but none of the checks and balances or incentives that our system--bolstered by the Hatch-Waxman Act---affords generics manufacturers, and by extension, patients and consumers.
GPhA is also alarmed by the exclusivity provisions in the TPP. According to the new provisions, TPP could extend 12 years of exclusivity to the TPP countries, which for some countries, including the U.S., goes beyond the current laws and would require countires to adopt a more restrictive policy. The net effect of extending more restrictive exclusivity laws will be to keep generics and biologics manufacturers out of the market for a longer period of time, and to significantly decrease normal competition---all of which will have enormous impact in terms of economics and human lives.
It's a losing proposition: Although generic and biosimilar manufacturers will be hamstrung in terms of their ability to enter TPP markets with affordable biosimilar treatment options, they will have none of the protections and incentives enjoyed by companies in the US as a result of Hatch-Waxman. Those include automatic substitution, ANDA application laws and 180 days of exclusivity.
“This is a crucial moment for the GPhA, the International Generic Pharmaceutical Alliance and all of our allies in the ongoing battle to ensure access to safe, affordable medications for people worldwide. If the TPP passes with the IP provisions as currently written, it will have a draconian impact on hundreds of millions of people around the world, including the 800 million people in the TPP countries,” said Ralph Neas, president and CEO of the Generic Pharmaceutical Association. The group supports passage of the TPP in a modified form.
Neas asserts that if the TPP provisions are allowed to pass unmodified, they will permanently disadvantage the international generic pharmaceutical industry and roll back hard-won progress in the U.S., where 86% of all medications dispensed are generics. But it’s not just about the health of individuals, according to Neas. Maintaining balanced IP laws that allow generic manufacturers to provide affordable options for people who need life-saving medications is an economic issue. Access to generic pharmaceuticals provided $239 billion in savings in 2013, and $1.5 trillion over the last decade.
The Pharmaceutical Researchers and Manufacturers of America (PhRMA) says IP protection “is essential to sustain the U.S. biopharmaceutical sector’s continuing investments in new research and development,” and that of every 5,000 to 10,000 experimental compounds considered, only one will gain FDA approval, at an average cost of $2.6 billion after more than 10 years of R&D.
For the last several years, the brand manufacturers have unfurled an army of lobbyists to support certain IP provisions in the TPP. In fact, for years, industry advocates have pushed hard for IP laws that provide the longest period of protection for branded pharmaceuticals, while essentially making it harder for generics and biosimilar manufacturers to develop more affordable options.
Striking a balance
According to the U.S. Trade Representative’s office, the broad goal of TPP is “to enhance trade and investment among the TPP partner countries to promote innovation, economic growth and development, and to support the creation and retention of jobs.”
Based on the goals of the TPP, its member states, including Brunei, Chile, Singapore, New Zealand, Australia, Canada, Japan, Malaysia, Mexico, Peru, Vietnam and the United States, stand to benefit through the eventual reduction of traditional market-access barriers to goods, services and agriculture. The large goal is greater prosperity, as well as a way to leverage cooperative scale for the greater good.
Neas and the GPhA are supporters of these goals and the use of a large-scale trade pact to accomplish these goals; however, Neas considers current TPP IP provisions unbalanced.
“We don’t want to kill the TPP, but we want to persuade President Barack Obama, who has traditionally been an advocate of affordable health care, to have his trade representative broker a more balanced trade pact. Ultimately, the agreement should strike a balance between fostering innovation and ensuring expedited access to safe, affordable, life-saving medications in line with the principles of the Hatch-Waxman Act.”
Creating a legacy
Just as passage of the TPP could become the crowning achievement of President Obama’s second term, Ralph Neas, who has announced that he will be leaving his position at GPhA at some point this year, is also taking a last stand to help create a long-lasting, international agreement that protects access to generic and biosimilar medications---while still upholding the most cherished principles of free trade and biopharmaceutical innovation.
While the vote could come within the next three weeks at the earliest, there is still a built-in 90-day period after the TPP bill is passed before President Obama will legally be able to sign the it. Undoubtedly, the stakes are high and the time is now---but the battle is far from over.
Photo captions: Ralph Neas, president of the Generic Pharmaceutical Association, Credit: Biopharma Dive and Leaders of TPP Member States. Credit: Gobierno de Chile.