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Intellectual property rights on new drugs is a major issue in new trade deal.

Intellectual property rights on new drugs is a major issue in new trade deal.

Laura Gilmore/Flickr (CC BY-NC-ND 2.0)

Trade agreement praised and panned

The Trans-Pacific Partnership (TPP) announced this week promises to lower the cost of manufactured goods and agricultural products for consumers, enhance labor and environmental protections, and strengthen rules against counterfeiting and intellectual property theft. But experts say that some aspects of the deal—signed by the United States and 11 other Pacific Rim countries representing two-fifths of the global economy—could harm public health.

A major concern is intellectual property (IP) rights for drugs. Pharmaceutical companies had been pushing for enhanced protection for biologics: drugs derived from living organisms that are a hot area of R&D. The United States provides the most generous terms for data exclusivity, which keeps critical information about the drugs out of the hands of generic drugmakers. With biologics, "to [make drugs] safe for the consumer" generics makers need access to information about the drugs’ manufacturing, says Tim Mackey, a global health policy analyst at University of California, San Diego. If the makers of “biosimilars”—the term for generic biologics—don’t have access, “they just may give up.”

The United States currently gives drug companies 12 years of exclusivity before biosimilar manufacturers can access their data for new submissions to the Food and Drug Administration (FDA). TPP partners Australia and Chile offer 5 years of exclusivity, and others none at all. “Most of the countries in the world have zero data exclusivity; this is a new data monopoly that doesn’t exist under many national laws,” says Judit Rius Sanjuan, a legal policy adviser for Doctors Without Borders (MSF), which opposes the agreement’s IP protections.

The United States was reportedly pushing for 8 years of protection. As a compromise, all TPP parties have agreed to provide at least 5 years of data exclusivity. (The United States retains 12 years.) The deal "fell short of Big Pharma’s most extreme demands but will contribute to preventable suffering and death," said Peter Maybarduk, an official with the consumer rights group Public Citizen in Washington, D.C. That’s not how the drugmakers see it. "We are disappointed that the ministers failed to secure 12 years of data protection for biologic medicines," Pharmaceutical Research and Manufacturers of America President John Castellani said in a statement. "The Ministers missed the opportunity to encourage innovation that will lead to more important, life-saving medicines that would improve patients’ lives.”

But pharmaceutical companies may have won additional patent rights. The details are not yet clear, as the TPP wording has not yet been made public. But Brook Baker, a law professor at Northeastern University in Boston, says the agreement likely includes provisions covering patent term extensions to compensate for regulatory and patenting delays and patenting of new uses of known medicines. "With the higher IP protections obtained in the TPP, it will be harder for developing country members to develop their own local capacity," says Baker, who is on the board of the Health Global Access Project, which advocates for people living with HIV/AIDS.

Last spring, a team of Australian and U.S. public health experts looked at the potential impact in Vietnam of provisions in a leaked draft of the TPP agreement. As they reported online in April, under that version of the TPP the cost of treating an HIV-infected person in Vietnam could rise from $304 to $501 per year. Given the country's tight budget, that increased cost could reduce Vietnam’s HIV treatment rate from 68% to 30%, depriving more than 45,000 people of life-saving treatment each year, they argued. Study co-author Brigitte Tenni, a public health adviser at the University of Melbourne in Australia, says the team cannot determine to what extent their analysis is still valid because they haven't seen the final agreement. But "any increase in intellectual property protection stands to have devastating consequences for access to medicines especially for people living in developing countries like Vietnam," she asserts.

The TPP offers a partial victory for antismoking efforts. Tobacco companies have used trade agreement clauses known as investor-state dispute settlement (ISDS) provisions to initiate arbitration over plain packaging laws that they say deprive them of their trademark benefits. After losing a court battle against Australia's plain packaging law, Philip Morris Asia Limited relied on an ISDS provision in a 1993 agreement between Australia and Hong Kong to initiate arbitration. A TPP provision says "A Party may elect to deny the benefits of Investor-State dispute settlement with respect to a claim challenging a tobacco control measure of the Party," according to the website of the United States Trade Representative. The U.S.-based antitobacco organization Action on Smoking and Health called this provision a "major victory for public health."

But "the devil is in the details," says Sharon Friel, a public health expert at Australian National University in Canberra. Without examining the agreement’s language, she says, "it is hard to tell exactly what is still possible." She thinks tobacco companies could still file ISDS claims, leading in some instances to a "regulatory chill" or to reluctance on the part of governments to enact tobacco control measures that might invite costly litigation. Australian newspapers have recently reported that the country has run up AU$50 million ($36 million) in legal bills in its dispute with Philip Morris. Avoiding such confrontation, "is of course much more likely to happen in poorer countries, where tobacco smoking is on the rise and hence the risk for public health," Friel says. She adds that tobacco companies will still be able to use ISDS provisions in other trade agreements, such as the one Philip Morris is utilizing.

The TPP’s ultimate fate is not decided. In many countries, including the United States, governments must win approval from their legislatures.