Trans-Pacific Partnership Could Reduce Market Exclusivity Period

The historic Trans-Pacific Partnership (TPP) negotiations finalized today could affect the cost of health care in significant ways.

This morning, the United States and its 11 Pacific Rim trade partner countries finalized what will be the largest regional trade accord in history, if enacted. The signatory nations control about 40% of global trade.

According to the parties, the overall objective of the TPP is to lower trade tariffs between signatory nations and enact new regulations to make way for cheaper goods, including food, medicines, and everyday household items.

Negotiations were stalled and then extended due in large part to differences over the appropriate amount of time that pharmaceutical companies should enjoy market exclusivity for a new drug.

Although the negotiations were conducted in secret, leaked portions of the TPP draft text revealed that the pharmaceutical provisions were poised to make it difficult for generics to challenge brand-name drugs abroad.

Earlier iterations of TPP intellectual property provisions enhanced patent and data protections for pharmaceutical companies in all signatory countries, which public health advocates and generic industry organizations argued would have worked to obstruct price-lowering generic competition for drugs and thereby hinder public health interests worldwide.

Former Generic Pharmaceutical Association (GPhA) president and CEO Ralph G. Neas previously said that the pharmaceutical provisions in the TPP would “fail to strike the right balance between fostering innovation and ensuring expedited access to more affordable medicines.”

Speaking to the TPP’s effects on the overall US health system, Neas said it “would adversely affect generic utilization rules used in healthcare programs such as Medicare, Medicaid, and the Veterans Health Administration.”

US negotiators eventually conceded and agreed that brand-name drug manufacturers would have a market exclusivity period of 5 to 8 years. Currently, biologic makers enjoy 12 years of market exclusivity and patent protection.

In response to the updated TPP provisions, current GPhA president and CEO Chip Davis said the agreement brings the generics industry closer to "improv[ing] worldwide patient access to affordable medicines [by] embracing competition from safe, effective biosimilar therapies."

The reduction in specialty drugs’ exclusivity period falls in line with Presidential hopeful Hillary Clinton’s recently outlined plan to overhaul the pharmaceutical industry and reduce skyrocketing prescription drug costs in the United States.

Others believe that TPP pharmaceutical provisions are especially harmful for foreign counties that had no prior protections for biologics. For instance, Peru, Vietnam, Malaysia, and Mexico had absolutely no monopoly protection on data for biologics whatsoever.

Doctors Without Borders contends that the TPP “will still go down in history as the worst trade agreement for access to medicines in developing countries.”

The TPP debate will likely continue to face stringent opposition both domestically in the US Congress as well as abroad in other countries. It is also likely to play a key role in US candidates’ presidential campaigns in the lead up to next year’s election.

Presidential hopeful Senator Bernie Sanders has already condemned the TPP, saying he is “disappointed” that “Wall Street and other big corporations have won again.”

Sanders has aggressively pushed for more government intervention to maintain the affordability of generic drugs, contending that “For years, generic drugs have made it possible for people to buy the medicine they need at lower price…We need to make certain that generics remain affordable.”

The 12 trade partner countries —Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, the United States, Singapore, and Vietnam—must now individually vote on the negotiated provisions.

The full text of the TPP is expected to be available to the public within the next month.