America’s trade policy should reflect U.S. law and promote a balance between supporting the development of innovative medicines and promoting competition through greater access to generic and biosimilar medicines. Unfortunately, this policy objective, included in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA), is often absent in U.S. trade policy.
U.S. trade has too often put the interests of pharmaceutical monopoly owners over the needs of the larger U.S. healthcare sector and, specifically, America’s generic and biosimilar manufacturers. As the U.S. government works to lower barriers for U.S. exports, the impact of trade policies on the U.S. economy must be considered. Restrictions and provisions included in trade agreements impact what laws and amendments Congress can and cannot pass. Therefore, it is critical that trade agreements, as they enter into force, have a holistic view of their benefits and costs.
U.S. trade policy should:
- Lower market access barriers for U.S. generic and biosimilar manufacturers
- Promote policies that do not prop up high U.S. drug prices
- Encourage patent and exclusivity policies that meet the needs of each trading partner and do not impede access to generic and biosimilar drugs
- Incentivize generic and biosimilar market access in the United States and in foreign markets
On October 1, 2018, the U.S. Trade Representative (USTR) announced a proposed agreement with Canada and Mexico to revise the North American Free Trade Agreement (NAFTA). The trade agreement—now called the U.S.-Mexico-Canada Free Trade Agreement (USMCA)—will decrease competition from more affordable generic and biosimilar medicines and keep patients paying high drug prices for longer.
Without changes to the agreement, USMCA will slow the development of biosimilars in the U.S., increase brand-name drug exclusivity (monopolies) for biologics in Canada and Mexico, restrict the enactment of policies aimed at lower the cost of biologic medicines and expand protections for brand-name drugs beyond current U.S. law.
Competition from generic and biosimilar medicines is a centerpiece of the president’s Blueprint to Lower Drug Prices and is a proven solution to bring down the cost of prescription drugs in the U.S. When patients are able to access more affordable generics and biosimilars, significant cost savings are realized at the pharmacy counter. However, the USMCA undermines the Blueprint by decreasing prescription drug competition.
Allied Organizations Express Concern About USMCA and High Drug Prices
Concern about delaying patient access to more affordable generics and biosimilars in the USMCA is widespread:
- The AFL/CIO issued a statement opposing USMCA, including its pharmaceutical provisions. “The new NAFTA will … keep drug prices high by expanding monopoly power for brand-name pharmaceutical companies. This provision will hurt workers in all three countries, but it will especially hurt Mexico’s workers. We cannot limit the future health policy choices for North American countries simply because Big Pharma seeks to use NAFTA to lock in and increase its profits.”
- Over 100 organizations sent a letter in January noting, “It is vital that the NAFTA party governments reject any provisions that would expand or strengthen pharmaceutical monopolies and enforcement at the expense of access to affordable medicines.”
- In June, AARP wrote to U.S. Trade Representative Robert E. Lighthizer, “AARP strongly opposes efforts to add harmful provisions to the renegotiated text of NAFTA that would extend or enhance monopoly protections for already-expensive biologic drugs.”
- The Leadership Council of Aging Organizations commented, “It is absolutely wrong to grant new monopoly protections sought by pharmaceutical CEOs for biologic medicines, like insulin. We would also oppose revising NAFTA to force countries to allow ‘evergreen’ patents … or to issue new patent terms for new uses of old drugs. All such schemes are used to block the entry of generic drugs into the market and raise prices for working families.”
AAM promotes and protects access to affordable medicines in trade agreements and represents these interests before the U.S. Trade Representative, the Department of Commerce, Congress, The White House and other stakeholders.
Together with 28 groups, AAM submitted a letter to U.S. Trade Representative Robert E. Lighthizer, Health and Human Services Secretary Alex M. Azar and congressional leadership expressing concern that USMCA, if left in its current form, will keep drug prices high and out of reach of Americans. The letter states that the draft agreement contains provisions that are inconsistent with U.S. law and includes monopoly protections and deterrents to competition that will slow biosimilar development, hurt generic competition and disrupt the critical balance between access and innovation in the market.