WASHINGTON – Makers of expensive brand-name drugs scored a victory when the United States’ new trade deal with Canada and Mexico included language preventing generic copies of their prescription medicines from hitting shelves for at least a decade.
The protections granted to pharmaceutical companies could complicate efforts to win congressional approval of the trade agreement in Congress. Consumer groups and some lawmakers fear the market restrictions would delay efforts to get cheaper medicines to those who need them most.
“This trade agreement, if left in its current form, will keep drug prices high in the United States to the detriment of our nation’s patients, job creators, workers and taxpayers,” nearly three dozen organizations wrote in a letter to U.S. Trade Representative Robert Lighthizer in November.
On Capitol Hill, the pharmaceutical language is under close scrutiny as Congress prepares to take up the trade agreement next year. House Democrats, who will return to the majority in January, are likely to demand changes to the deal if it is to win approval. The drug provision is among those sections targeted for revision.
If approved as it is, the trade deal “would not only raise drug prices in Canada and Mexico but would tie Congress’ hands, preventing us from enacting essential reforms needed to lower prescription drug prices,” said Rep. Jan Schakowsky, D-Ill., one of the lawmakers demanding that the provisions benefiting large pharmaceutical companies be stricken.
Under U.S. law, pharmaceutical makers are given 12 years of market protection for their drugs, which essentially provides them with a limited monopoly against competition from manufacturers of generic medicines. Canada grants drugmakers eight years of market protection, and Mexico provides five.
The U.S.-Mexico-Canada Agreement, a trade deal reached between the three countries in late September after months of negotiations, would provide drugmakers with a minimum of 10 years of market exclusivity.
That will mean a longer wait time for residents of Canada and Mexico before generic copies of drugs will be available. In the USA, the time frame won’t change since the 12 years enshrined in law exceeds the minimum required under the trade deal.
Pharmaceutical companies argued that the 12 years of market exclusivity granted under U.S. law strikes the right balance between the need to get effective new drugs to the market while protecting manufacturers’ risk and investment in developing them.
“When the U.S. and other countries protect innovation, it leads to the discovery of more new medicines, better health outcomes and increased competition,” said Jay Taylor, vice president of international advocacy for the Pharmaceutical Research and Manufacturers of America, orPhRMA.
“There needs to be a balance between encouraging competition and incentivizing innovation – and we think the (new trade deal) is a positive step in the right direction toward ensuring balance abroad for the biopharmaceutical sector,” Taylor said. “Implementing strong intellectual property standards in our trade agreements will help us pave the way for new treatments and cures for patients around the globe.”
Consumer groups, trade unions and others countered that giving drugmakers a minimum 10-year monopoly stifles competition and discourages other companies from developing cheaper generic drugs or biosimilars, which are complex, almost identical copies of an original prescription drug manufactured by another company.
“Biosimilars are so important because these are the affordable versions of some of the most expensive drugs in the world,” said Jeff Francer, general counsel of the Association for Accessible Medicines, which advocates for improved access to safe and effective medicine.
In the USA, consumer groups and generic-drug makers have pushed Congress for years to lower the market exclusivity period to seven years. The minimum 10-year requirement in the trade deal “would lock us in in the United States and handcuff Congress from using a tool that could bring prices down,” Francer said.
“Folks who are invested in prescription drug affordability should demand that the 10 years in the treaty either be removed or brought down to a number like seven,” he said.
Other organizations that raised concerns about the minimum requirement in the trade deal include AARP, the American Federation of Teachers, the AFL-CIO and the American College of Physicians.
Several Democrats in Congress, including Massachusetts Sen. Elizabeth Warren, Oregon Sen. Ron Wyden and Ohio Sen. Sherrod Brown, sounded the alarm about the pharmaceutical provisions in the trade deal.
“The senator has long opposed big pharma’s role in writing our drug policy, including our trade agreements, to boost their bottom line at the expense of American families,” Brown spokeswoman Jennifer Donohue said. “And he will take advantage of any opportunity, whether through domestic legislation or our trade agreements, to lower the cost of drugs for American consumers.”
Schakowsky said the trade deal will keep drug prices high and inaccessible for too many Americans.
“We must eliminate big pharma provisions that will increase pharmaceutical profits at the expense of patients,” she said.