[CTC] Senate GOP Open to Revising Drug Provisions in Trade Deal

[Arthur Stamoulis]

https://www.nationaljournal.com/s/677027/senate-gop-open-to-revising-drug-provisions-in-trade-deal 
Senate GOP Open to

Revising Drug Provisions

in Trade Deal

Republicans have not shut the door on revisiting language in the North American trade agreement that guarantees 10 years of market exclusivity in Mexico and Canada.

 March 3, 2019, 8 p.m.

Senate Republicans are not dismissing Democratic concerns over a provision in the new North American trade agreement that could drive up drug prices, setting the stage for a battle with pharmaceutical companies and their political backers.

The trade pact would guarantee the makers of complex, expensive drugs known as biologics 10 years of exclusive rights to sell their product in Mexico and Canada. Patient advocates argue this provision would stymie Congress’ fight against high drug prices.

The United States-Mexico-Canada Agreement was announced late last year. For it to take effect, legislation implementing the pact must pass through each country’s legislature: Mexico’s Senate, Canada’s Parliament, and the U.S. Congress.

On Capitol Hill, talks are in their early stages, but pharmaceuticals—particularly biologics—have become (https://www.nationaljournal.com/s/676903/wednesday-qa-with-earl- blumenauer) an early sticking point for Democrats, who had little input on the agreement before reclaiming the House majority in January.

Now, Republicans and the Trump administration will need to negotiate with House Democrats if they want to move an implementing bill. Some Senate Republicans did not completely discount the idea of revisiting the 10-year market exclusivity in the agreement.


“I think we ought to look at all that,” Sen. John Cornyn said when asked if he would be willing to revisit this provision in the agreement as part of his efforts to lower drug prices. “I mean, [there] is not the same competition in the biologics area as there is [for] other, non-biologic drugs.”

As part of their efforts to reduce drug prices, Democrats have been trying to slash the current 12-year exclusivity period for biologics—which prevents competitors from entering the market with cheaper copies, known as “biosimilar” drugs—in the U.S. down to seven years.

But patient and health policy groups argue the trade agreement as currently written would take away lawmakers’ ability to rewrite the exclusivity period. Congress would risk violating the trade agreement, should it move forward, and invoke tariffs, they argue.

“By including these special protections for biologics like Humira, we handcuff the ability of the U.S. Congress to change the system that is driving high prescription-drug prices,” said Jeff Francer, general counsel for the Association for Accessible Medicines, which represents generic and biosimilar drugmakers.

House Ways and Means Trade Subcommittee Chairman Earl Blumenauer will play a major role in crafting legislation implementing the USMCA. Blumenauer is firm on making changes to the trade agreement over a variety of issues: labor, environment, and drug prices, especially the 10-year provision for biologics.

Blumenauer said the USMCA deal on biologics is based on a deal negotiated with Pacific nations as part of the Trans-Pacific Partnership trade pact, which President Trump withdrew from during his first week in office.

The Obama administration negotiated an eight-year exclusivity period for biologics in the TPP. Writing an even longer deal into the USMCA is a move in the wrong direction for some progressives like Blumenauer.

“We’re locking ourselves into a 10-year protected [period], a longer use, a monopoly,” Blumenauer said. “So that’s two years more than the Obama administration was when they were negotiating [TPP].”

Ways and Means ranking member Kevin Brady defended the exclusivity period as a way to protect the intellectual property of U.S. companies.

“I’m worried that inadvertently an agreement like this could weaken the intellectual-property protections here in the U.S. and make it easier for foreign countries to not share in the cost of research and development of these expensive, lifesaving drugs,” Brady said. “The U.S. law is 12. I think the compromise at 10 is a fair one that both protects these intellectual-property rights as well as creates a path to biosimilars in these other countries as well. So I think the administration got it right.”

Brady’s comments directly echo the drug-lobbying group Pharmaceutical Research and Manufacturers of America, which has argued that the 10-year time frame will strengthen regulatory data protections in Mexico and Canada.

“The USMCA’s provisions prioritize innovation and competition and do not increase medicine costs, despite what a few loud critics have said,” wrote (https://catalyst.phrma.org/fact-check-biologics-regulatory-data-protection-and-the-united-states- mexico-canada-agreement) Douglas Petersen, PhRMA’s deputy vice president for international trade. “PhRMA is committed to working with policymakers on both sides of the aisle to ratify the USMCA and push for solutions that will improve patient access and affordability.”

But Senate Republicans appeared more open to discussing the provision as part of their efforts to address drug pricing. Cornyn wants the Senate Judiciary Committee to examine whether drug companies game the patent system to delay the introduction of cheaper pharmaceuticals. He told National Journal that the North American trade agreement provisions could be examined.

Judiciary Chairman Lindsey Graham also didn’t rule out examining the USMCA provision, though he didn’t identify it as a key factor inflating drug prices.

“I don’t know if that’s the problem or not, but yeah, we’ll look at anything,” Graham told reporters Wednesday.

How lawmakers would go about revising the USMCA, agreed upon by all three countries late last year, is unclear. One option would be a side agreement, also known as a side letter, in which all three countries agree on a new provision without amending the original language. Similar agreements were made in the original North American Free Trade Agreement.

Senate Finance Chair Chuck Grassley said he would be open to looking at a change only if it were made through this process.

“If their concerns can be addressed with side letters or annexes, I’d be willing to take a look at it. ... But if what they’re asking to do takes you back to the negotiating table—you ain’t going to get Canada and Mexico to go back to the negotiating table,” he said.

Blumenauer has said it is too early to discuss the vehicle for changing the biologics provision, but other Democrats want concessions written into the trade deal’s actual text.

“Things being put in annexes make it more difficult to reinforce them and enforce them, so we want things in the main body,” Rep. Bill Pascrell, a member of Blumenauer’s subcommittee, told reporters Tuesday.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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