GPhA argues that Trans-Pacific Partnership agreement will impede generic utilization

WASHINGTON — The Generic Pharmaceutical Association on Wednesday expressed concerns that the current structure of the Trans-Pacific Partnership agreement (TPP) will impede generic utilization and outlined five areas where the agreement could be improved. 

 

TPP is a trade agreement that the United States currently is negotiating with 11 other countries throughout the Asia-Pacific region (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam). 

 

"The TPP fails to strike the right balance between fostering innovation and ensuring expedited access to more affordable medicines," charged Ralph Neas, GPhA president and CEO, in identifying the first opportunity to improve the trade agreement. "It does too much to extend already generous monopolies enjoyed by brand-name drugs, and too little to ensure that safe, low-cost generic versions are available to patients as soon as legally possible. This is a very serious concern for our industry and for global health." 

 

Neas noted that in the United States, generic utilization has increased to 86% of all prescriptions at only 27% of total prescription costs that has resulted in a $1.5 trillion savings to the U.S. healthcare system. 

 

Neas also noted that every intellectual property provision affecting pharmaceuticals proposed in the TPP — including patent linkage, patent-term extensions and exclusivity provisions — would delay the launch of generic drugs.

 

In addition, as the agreement is being negotiated now, it would lock in policies covering biologic medicines "that would contribute to putting these very expensive drugs and vaccines beyond the reach of patients and governments," Neas said in identifying the second area in which the TPP could be improved. "By delaying the entry of biosimilars, the TPP would be setting a terrible precedent in one of the highest-stakes areas of medicine."

 

 

The TPP provision on biologics even runs contrary to some of the Obama administration’s own proposals, Neas said. "Specifically, U.S. negotiators are lobbying for an exclusivity period of 12 years for biologics, while for the last four years President Obama’s budget proposals have included a reduction to seven years. Moreover, any trade agreement the United States signs should not undermine Congress’ authority to reduce exclusivity and help the U.S. healthcare system save billions of dollars," Neas said. 

 

In constricting the utlization of generics, the TPP would also hinder employment opportunties, Neas said, marking a third area that would improve the TPP. The U.S. generic industry employs more than 60,000 people in 31 states. And generic manufacturers have become major exporters. "To continue to grow and create new jobs, this industry must have access to overseas markets," Neas said. "Trade agreements are supposed to open markets. The current TPP opens markets for big pharma but closes them for generics. And by doing so, it limits an avenue of vigorous growth for the U.S. economy."

 

"My fourth point is that the TPP is bad healthcare policy," Neas said. "The current TPP would limit the ability of foreign nations from Japan to Peru to achieve their generic utilization and healthcare savings goals, [and] it would make it harder for participating governments to contain costs in publicly supported healthcare programs," he said. "In the United States, for example, it would adversely affect generic utilization rules used in healthcare programs, such as Medicare, Medicaid and the Veterans Health Administration."

 

GPhA pointed to the Peru, Colombia and Panama Free Trade Agreements that were based on a 2007 bipartisan compromise as a trade agreement model that works in making its fifth point. "While expanding intellectual property protections, they also restored some balance to U.S. trade policy by ensuring access to generic medicines. We should follow the lead of these agreements in repairing the TPP," Neas said. "GPhA is working hard to ensure that access and fairness are priorities in international trade agreements. The TPP fails both those tests, as well as the tests of economic growth and sound healthcare policy. For all these reasons, we need to radically improve this agreement. We must hope it’s not too late to do so.”