How 'ObamaTrade' Will Drive Up The Cost Of Medicine Worldwide

Tyler Durden's picture

Authored by Julia Belluz, originally posted at Vox.com,

After nearly eight years of negotiations, the United States and 11 other countries have finally reached consensus on the Trans-Pacific Partnership, one of the largest trade deals in a generation that'll involve nearly half the world's GDP.

The sprawling deal would affect a variety of issues, including tariffs, labor rights, and international investment. But the deal's most controversial provisions are the ones limiting competition in the pharmaceutical industry. According to Doctors Without Borders, "The TPP will still go down in history as the worst trade agreement for access to medicines in developing countries."

Though the final text of the agreement won't be available for at least another month, here's what we know so far.

The TPP will drive up costs for some of the most expensive drugs on the market in the poorest countries

One of the biggest sticking points in the negotiations had to do with data protection for biologic drugs.

Biologics are treatments made from biological sources, including vaccines, anti-toxins, proteins, and monoclonal antibodies for everything from Ebola to cancer. As the Brookings Institution explains, biologics are much more structurally complex than regular "small-molecule drugs" and are therefore more difficult and expensive to make, costing on average 22 times more than nonbiologic drugs.

Because of the high prices of these drugs, companies are very interested in developing "biosimilars" - cheaper copies of the original drugs, similar to generic versions of pharmaceuticals. The reason these biosimilars are so cheap is that manufacturers can usually just rely on data from clinical trials submitted by the maker of the original biologic. But, of course, the maker of the original drug doesn't want everyone using its data and making cheap knockoffs.

So in the United States, there are really protective rules around this: Any maker of a biologic gets 12 years of data exclusivity. The FDA can't approve a similar drug that relies on the original data during this time. (Theoretically, other companies could conduct their own trials to create a biosimilar, but because this is so expensive, it defeats the point.) By contrast, in other countries, there are looser rules - or no rules - around such data exclusivity. Japan offers eight years, for instance. Brunei offers zero.

As part of the TPP, the United States (and the pharmaceutical lobby) had been pushing to get every country to agree on 12 years of data protection for biologics. The final agreement falls somewhere in between, with a period of data exclusivity from at least five to eight years, according to the New York Times.

This means the agreement will prevent more affordable biosimilars from entering the market for a longer period of time in places that previously had no bar to entry. And the burden of this provision will be felt by the world's poorest countries, according to Judit Rius Sanjuan, the legal policy adviser for Doctors Without Borders.

"Peru, Vietnam, Malaysia, and Mexico - they had zero monopoly protection on data for biologics," she said. Now they'll have to wait at least five years before allowing cheaper biosimilars onto the market. "It's a loss for people in developing countries. They'll face higher prices for longer periods of time, and there are many products we need that are biologics."

The TPP could also delay cheaper, generic versions of drugs

Meanwhile, every country has systems for granting patents and legal privileges to the first company to invent a drug - a reward for innovation. After these expire, other companies can apply to get their cheaper "generic" copies of these drugs on the market.

At the moment, it's up to countries to decide whether things like a small change in a drug molecule should warrant a patent extension. But the final TPP creates patent-related obligations in countries that never had them before, explained Rius Sanjuan. To put it simply, this would directly target a country's ability to define its own patent law and put a higher standard on when generics can become available.

Critics believe these provisions will likely to limit the availability of cheaper generics. "We know from experience that more expansive patent laws end up reducing the availability of generic medicines," said Yale law professor and global health researcher Amy Kapczynski, who wrote about the deal's health impact in the New England Journal of Medicine. "When you start mucking around in the precise ways countries can define your patent laws," she said, "you limit everyone’s policy flexibility."

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A Lunatic's picture

We need to pass this so we can see what is in it. Business as usual for the criminal cabal......

BurningFuld's picture

That's funny. Instead of less than 1 cent per dose like in a tablet these things cost a whopping 22 cents a dose to manufacture.

Having worked in the prescription drug "industry" my entire life you can call me a cynic. Most of this crap is barely above snake oil status. And most all of it comes from University research paid for by your tax dollars in the first place. 

Billy the Poet's picture

The governments of the world are preparing a so called "free trade" bill which will highly regulate the economic activities of billions of people. There are some folks here (like LTER) who will insist that this proves that free trade and in fact freedom itself are bad and that therefore the government must regulate us to protect us.

Lots of people seem to fall for that argument but it really doesn't stand up to real world examples such as this.

sun tzu's picture

Yet they ignore the fact that if it wasn't for big government preventing re-importation of drugs, medical care in the US would drop 50%. The government caused medical care costs to skyrocket, then the government rides in to save the day by forcing everyone to buy overpriced, crappy health insurance. That's their proof that Orwellian socialism is the best system.

macholatte's picture

 

Don’t allow yourself to be fooled and enter the debate over what makes a good trade agreement. The corporatocracy bought the Congress for just a little more than $1M to get them to lay down for it. Now that’s what you call a bunch of cheap whores.

 

This Is How Little It Cost Goldman To Bribe America's Senators To Fast Track Obama's TPP Bill

 

http://www.zerohedge.com/news/2015-05-30/how-little-it-cost-bribe-senates-fast-tracking-obamas-tpp-bill

 

 

Paveway IV's picture

I don't want to point fingers, but there's a certain small country in the Middle East that's been quietly buying up all generic drug makers. Almost as if they know they will have a free hand to extort the U.S.-mandated healthcare and the military/VA healthcare and Medicare systems in the near future. They're gaming the system now for a loophole they're creating in the future. That doesn't seem fair. We should punish them for this dishonest, thieving business practice and question the decisions of any dual-citizens they ever lobbied.

How about if we pass a U.S. law making it illegal to buy ANY drug on earth that has any Israeli financial interest, is owned wholly or in part by an Israeli company, utilizes Israeli or Israeli-owned supply, manufacturing or distribution facilities in any nation on earth or pays royalties to Israeli entities? Oh, wait... that will be ILLEGAL under the TPP.

Congress is approving a fake law ('trade partnership') that circumvents and overrules the Constitution of the U.S. - how about that? Isn't that illegal or something?

junction's picture

The bombing of Doctors Without Borders hospitals will continue until they learn that Obama is their master and criticsim of the TPP will be dealt with severely by Lord High Executioner Obama. 

Big_Hitman's picture
Big_Hitman (not verified) A Lunatic Oct 11, 2015 7:26 PM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.wallstreet34.com

dreadnaught's picture

wow! you must work for Big Pharma.....

QEsucks's picture

Last I checked Peru Vietnam Malaysia and Mexico didn't contribute 

Jackshit to R+D Pharma Ever.

Parasite. 

 

TBT or not TBT's picture

Au contraire, they have hugely profitable drug manufacturers.  

DanDaley's picture

Doctors Without Borders...guess they didn't get the hint last time.

FredFlintstone's picture

Geographers without borders would be an interesting organization

JohnG's picture

See "US Foreign Policy" for that...

Teh Finn's picture
Teh Finn (not verified) Oct 11, 2015 3:39 PM

Vox?  LMAO...

Anyway it would be about time for the rest of the world to pony up for these life saving drugs.

Son of Loki's picture

Eat your Broccolli!

 

... and hemp seeds, carrots [not the $5 ones at wf], spinach, apples, etc. Wash thoroughly to get all the pesticides and fuki radiaotn off the stuff if it comes from Cali. Peel whatever you can. Wash again then eat!

 

Cancer and Alzheimers are very very expensive and you will make Big Pharma [and all thier lobbyists] very very rich.

Feel it Reel it's picture

TPP = Trans Pacific Partnership in Population Control

localizer's picture

Yet another "victory" for the Nobel Prize Winner... when they get all 3 "free trade" agreements through (and looks like they will sooner or later 'cos they don't give a shit about what people think 'cos people are not even allowed to see what's being signed...) the generics industry is as good as dead so the poor countries are really fucked. The only hope is with the BRICS...

I Write Code's picture

>Now they'll have to wait at least five years before
>allowing cheaper biosimilars onto the market.

Um, five years from when?  Most of the first generation biologics have been on the market for over ten years now, if they are all unprotected on day zero this will have only modest effect.

I thought the FDA was still waffling on allowing generics at all for biologics here in the states.  Generic Enbrel, anyone?

cigarEngineer's picture

It's about time they started paying their fair share. Drugs are so expensive in the USA because they're free-loading off the USA.

The socialists in Europe tell companies: we're going to pay you $X for this. Take it or leave it. Companies can either take the price, or they can refuse, and the Europeans will have no problem violating patents to produce the drugs themselves.

End the FDA.

Teh Finn's picture
Teh Finn (not verified) cigarEngineer Oct 11, 2015 7:14 PM

The FDA, like all the other alphabet Bureaus aer OUT OF CONTROL.  The regulations they are pumping out every day are killing American drug manufacturing.  Sorry, I don't want my meds made by an uneducated, barefoot, $1/mo. paki.

RadioactiveRant's picture

Most European medical regulators undertake analysis to assess whether a new drug is cost effective, essentially what it costs per quality-adjusted life year. This analysis will/should form part of the negotiation on the price, "we're not buyers at $X but we'd be interested at $Y".

You imply European "socialists" breach IP law if they don't get the price they want; they don't, just don't buy. Its almost as if you think patient should be able to demand any drug they want irrespective of cost AND the drug company should be able charge whatever it wants irrespective of the effectiveness of their product, or the cost of R&D.

cigarEngineer's picture

I hear what you're saying. If it's true, it still smacks of central planning. We know the "price problem" is never solved satisfactorially in a centrally-planned system; the decisions of millions of customers are better than the decisions of a committee. It sounds great in theory but it's a fairy tale: just like the FDA. We allow almost unlimited competition in technology (because nobody dies from it), and look how much cheaper the same computer gets as time passes...

I think the biggest driver of high prices for drugs are the regulations of the FDA, which then makes the market problem so much worse. Another example of the "ratchet effect" of regulation.