Public Health Organizations Urge Congress to Reject Trans-Pacific Partnership Agreement

By Donald Zuhn --

In a letter sent to members of Congress earlier this month, 58 public health organizations urged Congress to reject the Trans-Pacific Partnership (TPP) in its current form, stating that the coalition was "alarmed by the implications for access to medicines" of the TPP.  According to the signatories, the TPP, which was signed by the U.S. and eleven other countries in February, includes intellectual property, investment, and reimbursement listing provisions that "would do more to undermine access to affordable medicines than any previous U.S. trade agreement."

Arguing that "[g]eneric competition has consistently proven the most effective means of reducing prices and ensuring prices continue to fall over time," the group declares that:

By expanding the monopoly power of pharmaceutical companies, TPP provisions would restrict generic competition and thereby enable medicine prices to keep spiraling out of reach -- locking in a broken system here at home and exporting that system to the eleven other TPP countries and those that may join later, including lower-income developing countries where public resources are limited and most people pay for medicines out-of-pocket.

Among the TPP provisions causing the greatest concern for the coalition are the following patent-related provisions:

- Measures that enable patent "evergreening" by requiring countries to grant additional 20-year patents for new uses, new methods or new processes of using existing medicines.  These provisions facilitate abuse of the patent system and extend the monopoly protection that enables patent holders to keep prices high over many more years for products that are already on the market.

- Extension of patent terms beyond 20 years when the patent office review exceeds a certain period, and when patent holders allege delays in drug regulatory review of a medicine's safety and efficacy in order to grant marketing approval.  Patent term adjustments significantly delay market entry of generic medicines.

The signatories also found the following regulatory provisions to be of concern:

- Rules requiring data/marketing exclusivity of at least 5 years for small molecule medicines plus at least 3 years of additional exclusivity for modifications of existing medicines or 5 years for combinations.  These exclusivity periods create additional monopoly power separate from and independent of patents by blocking the registration and marketing approval of generic products.  This delays generic competition even if there is no patent on the medicine.

- For the first time in a U.S. trade agreement, there is a separate provision for monopoly protection for biologic medicines -- such as monoclonal anti[]bodies that are rapidly becoming the treatments of choice for many cancers and other illnesses.  Provisions include at least 8 years of exclusivity, or 5 years of exclusivity plus "other measures", either of which could undermine the Administration's budget proposals to provide no more than 7 years of exclusivity to allow less expensive follow-on biologics to come to the U.S. market sooner.  The Federal Trade Commission has concluded no exclusivity period for biologics is necessary for companies to recoup costs and incentivize innovation.  There is also concern that these provisions could keep prices higher for even longer if TPP parties enter into side agreements guaranteeing lengthier monopoly protection for these already high-cost medicines.

According to the coalition, "[i]ntellectual property protection is a public policy instrument intended to stimulate innovation in exchange for technological advancement that benefits the public," and governments are responsible for maintaining "an appropriate balance between promoting access to, and fostering innovation in, medicines."  The group of public health organizations argues that the TPP provisions described above "significantly skew that balance away from consumer access to medicines by unduly expanding pharmaceutical industry monopoly power."  In the U.S., the signatories contend that:

[T]he TPP is a danger to public health and fiscal responsibility because it would lock in policies that keep prices of too many medicines unaffordably high.  It would tie Congress's hands, potentially for decades to come, preventing policymakers from having flexibility as they formulate sensible policies to promote access and keep medicines affordable.

The following organizations signed the letter:

ACRIA Center on HIV & Aging
Act Up Boston
Adrian Dominican Sisters, Portfolio Advisory Board
African Services Committee
AIDS Alabama
AIDS Healthcare Foundation
Alliance for a Just Society
Alliance for Retired Americans
American Medical Student Association
Article 25
AVAC- Global Advocacy for HIV Prevention
Breast Cancer Action
Cancer Families for Affordable Medicine
Center for Policy Analysis on Trade and Health (CPATH)
Communications Workers of America (CWA)
Community Organizations in Action
Connecticut Citizen Action Group
CREDO Action
DC Fights Back
Dominican Sisters of Hope
Global Justice Institute of Metropolitan Community Churches
Health Alliance International
Health Global Access Project (GAP)
Hepatitis Education Project
Hesperian Health Guides
HIV Prevention Justice Alliance
Icahn School of Medicine at Mount Sinai
Indian People's Action
Initiative for Medicines, Access & Knowledge (I-MAK)
Interfaith Center on Corporate Responsibility, Domestic and Global Health Leadership Teams
Main Street Alliance
Maryknoll Office for Global Concerns
Médecins Sans Frontières/Doctors Without Borders USA
National Nurses United
National Physicians Alliance
NETWORK, A National Catholic Social Justice Lobby
Northwest Coalition for Responsible Investment
Other98
Oxfam America
People's Health Movement USA
Physicians for a National Health Program
Physicians for Social Responsibility
Project Inform
Public Citizen
RESULTS
Social Security Works
Student Global AIDS Campaign
Sum Of Us
Treatment Action Group
United Church of Christ, Justice and Witness Ministries
Universities Allied for Essential Medicines
Ursuline Sisters of Tildonk, U.S. Province
US Action
Virginia Organizing
Voices of Community Activists & Leaders (VOCAL-NY)
Washington Community Action Network
Yale Global Health Justice Partnership
Young Professionals Chronic Disease Network

Comments

[Dan Feigelson]

High drug prices in the US and low prices elsewhere mean that US citizens are shouldering a disproportionate amount of the burden of drug development for the world.

According to the group discussed here, the TPP would put mechanisms in place that might help shift some of that burden to Asia, by allowing for IP protections that more accurately follow the real-world development of medicines. (There's no guarantee of such burden-shifting actually coming to pass, of course: those signatories that do not presently treat drug registration information as confidential and proprietary, for example, are already in violation of their obligations under TRIPs, so why assume that they'll change their practices under the TPP? And price caps on drugs, or poor economies, might simply ensure low or no profits for the drug companies in certain countries.)

But this group's response is not, It's good that the TPP countries are trying to find a way to share the cost of drug development so that more medicines are developed more quickly. Instead, its response is, Let's make sure that the cost of drug development continues to be borne disproportionately by the USA.

Couple that thinking with the recent Sanders/Leahy/Franken et al. letter to the NIH about march-in rights (reported in Patentdocs last week) and you've got a recipe for less drug development, as you encourage capital to flow away from drug development and into other areas.

But hey, at least medicines that were developed 30 years ago or more will be cheap and available to everyone...just like they already are.

[Sidford Brown]

The article and the comment would be more useful if they provided some metric for assessing whether the provisions of the TPP were too rich or too poor for the pharmaceutical companies. We already know both stories -- too poor a deal for pharmaceutical companies is bad for drug development and too rich a deal is bad for consumers or their insurers. Is there anything in either this post or the comment that suggests how to test the proposition that the TPP is too rich for pharmaceutical companies?

[Kevin E Noonan]

The only data point, Sidford, is a peer-reviewed study from Duke that estimated the break-even point for ROI occurs at about 17 years after product approval for biologic drugs. In the US, the BPCIA provides 12 years as a compromise; despite this the Obama administration has advocated for 7 years, based (in part) on a think tank sponsored (but not peer reviewed) study.

The FTC's argument for no regulatory exclusivity is based on a series of specific assumptions that may be true in the US but are untested in the other signatories.

We discussed all three of these reports prior to passage of the ACA; "biosimilar" in the search engine should find them for you.

Thanks for the comment

[skeptical]

Dr. Noonan,

Are each of these terms (17, 12, and 7) AFTER the twenty year term that a patent provides....?

[Kevin E. Noonan]

Dear Skeptical:

Totally unrelated to patenting - these are regulatory exclusivities that are given to biologic innovators upon approval. The Hatch-Waxman regime, for example, gives you 5 years exclusivity and a generic competitor can apply for ANDA approval only by agreeing to wait until patent expiry or alleging non-infringement, invalidity or unenforceability. But those are special provisions for patents; the 5 year exclusivity is absolute.

Similarly for biologics - only here the exclusivity term is longer, to increase the likelihood of sufficient ROI for anyone to invest.

Thanks for the comment.

[skeptical]

Thanks Dr. Noonan. So if indeed separate (and one has gone the patent route), are these time frames after the patent term or concurrent?

[EG]

Hey Skeptical,

As Kevin would surely tell you they are concurrent and unrelated to each other. For example, you don't even have to have a patent on the drug to get this data exclusivity.

[skeptical]

Thanks EG - I was interested in those cases in which patents are in play, and the possible interactions (in time) of the various protections.

[Kevin E Noonan]

For small molecule drugs the patent exclusivity frequently extends after the regulatory exclusivity - hence the prevalence of ANDA litigation.

It is a mixed bag with biologics due to the delay in even having a biosimilars route - many of the patents on these drugs have expired or will expire, and the regulatory exclusivity is long past. That, and the fact that the Europeans have been permitting biosimilars to be marketed for some time, means that many of the first biosimilars will be drugs like Neulasta and Neupogen and others of that vintage.

In other words, lots of competing interests at play here.

Thanks for the comment, and thanks, EG, for providing clarity.

[Simon Elliott]

Generic competition lowers prices, but where do the original drugs come from without a profit motive?
Currently, US consumers are effectively subsidizing drug development for the rest of the world, through high drug prices and research infrastructure. TPP aims to equalize that.

A fundamental problem is that trade deals focus on more obvious trade barriers and inequalities like tariffs. But e.g. a Canadian law that harms US pharma is just as much favoring local interests as a US tariff on Canadian maple syrup.