House Democrats Skeptical of Trade Deal's Rx Provisions

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By Nathaniel Weixel

Dec. 8 — House Democrats said they are concerned about how the Trans-Pacific Partnership (TPP) trade agreement's pharmaceutical provisions could affect U.S. drug prices.

During a Ways and Means Committee hearing Dec. 8 that was organized and attended exclusively by Democratic lawmakers, members expressed skepticism that pharmaceutical companies needed additional protections for their biologic products.

“We have a crisis in drug prices right now,” Rep. Jan Schakowsky (D-Ill.) said, citing recent data that has shown drug companies charge what the market will bear, rather than what it actually costs to develop the drugs. “How much do you spend on innovation and research, and how much do the taxpayers pay?”

Under the agreement struck by 12 Pacific Rim nations, pharmaceutical companies will get at least five years of exclusivity before they have to share biologic drug data with competitors seeking to make imitations of their products. In the U.S., drugmakers get to hold on to the data for 12 years, and the industry has been pushing for a similar period for America's trade partners. Some Republican lawmakers have also criticized the deal as one that harms innovation and doesn't protect American interests.

While patents can keep lower-cost versions from coming on the market, data exclusivity keeps manufacturers of biologic copycat drugs, called biosimilars, from accessing the brand-name companies' data to help develop their products.

Promote Innovation

“All the 12-year protection period does is create a level playing field for biologics,” said Joseph Damond, senior vice president of international affairs at the Biotechnology Industry Organization. “But allowing competition in the first year right after the drug is developed is not the way to subsidize medicines to people, especially in developing countries. That’s just a way of preventing people from getting new treatments and cures that they don’t already have.”

Weakening the exclusivity period, Damond told the lawmakers, “is basically saying Chinese companies come in and take American business from us and sell in Asia.”

Stephen Ezell, vice president of global innovation policy at the Information Technology and Innovation Foundation, told lawmakers “it’s critical we preserve a system that strikes an appropriate balance between supporting generics competition in the United States and globally with one that retains incentives for innovative biologic companies to engage in the risky, expensive, time-consuming process of developing new biologic drugs.” The ITIF is a think tank that advocates for policies that accelerate innovation.

High Prices, Rationing 

Citing a “transparency annex” to agreement, the consumer advocacy group Public Citizen said the administration is relaxing protections for drug pricing, which would give pharmaceutical manufacturers undue influence over setting reimbursement rates and prevent Medicare from negotiating prices.

“Pharmaceutical companies could attempt to exploit the general language of the annex to mount challenges to Medicare and health programs in many TPP-negotiating countries,” Peter Maybarduk, director of Public Citizen’s Global Access to Medicines Program, said.

“Most countries, under pressure from high prices, ration treatment. Treatment rationing is getting worse, including in the United States. The more monopoly powers policymakers provide to the pharmaceutical industry, the more treatment we will have to ration,” Maybarduk said.

To contact the reporter on this story: Nathaniel Weixel in Washington at

To contact the editor responsible for this story: Brent Bierman at

More information on the hearing is at