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By Len Bracken
Sept. 7 — Progress has been made between the administration and Congress on a key drug-related issue in the trans-Pacific trade pact, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said Sept. 7.
Hatch would not provide details to reporters at the Capitol on the progress, but he expressed hope that a solution could be found and noted that President Barack Obama was involved in the discussions on the issue of intellectual property rights protections for biologic drugs in the 12-nation Trans-Pacific Partnership (TPP) agreement.
“We haven't decided the final terms, buy they have indicated to me that they know they have to make” an acceptable offer, Hatch said. “It's up to the White House—I've told them this is a serious situation and not one they can blithely step aside on.”
The administration would like the TPP to be ratified during the lame-duck session of Congress, and Hatch said resolving what he called “the biggest problem” with the pact would “go a long way” toward improving prospects for post-election consideration of the agreement.
Officials at the Office of the U.S. Trade Representative could not be reached for comment.
Without a biologics solution, the TPP would not pass Congress, he said. However, even with a solution, the agreement would have a “rough time passing,” he added.
At issue is the discrepancy between the 12 years of intellectual property protection for name brand manufacturers under U.S. law and the shorter-term options in the TPP, after which other manufacturers could make lower-priced “biosimilar” drugs using the original test data. The other TPP countries need to commit to a 12-year term, Hatch said, adding that a binding side agreement involving all other parties to the agreement would be one way to do this.
Australia, New Zealand and Peru have all indicated at various points during the last six months that they will not change their positions concerning biologics and stand by the agreed-upon language contained in the TPP.
“I don't know what they're going to offer, but they know I'm at 12 years of data exclusivity,” he said of the administration. “They're going to have to find a way of having the countries agree to change that formality in the TPP to 12 years or come up with something that will be acceptable.”
Hatch said he knew which TPP countries would be willing to go up to 12 years but would not identify them. Australia, Chile, New Zealand and Peru put up the most resistance in the TPP negotiations to U.S. efforts to secure a longer term of protection for brand name biologics, with Canberra taking the lead in this opposition.
“If Australia wants to be part of it, they have to meet our terms,” Hatch said, adding that he and the Australian trade minister discussed how they might solve this problem.
Steven Ciobo, Australian's minister for trade and investment, said after his meeting with Hatch in July that he told the Utah lawmaker Australia would try to help sort out the problem but intended to keep its current law, which provides a five-year exclusivity period (136 ITD, 7/15/16)
Incentives have to be in place so that drug manufacturers can recoup their investments, Hatch said. But he acknowledged that some drugs were overpriced and expressed his support for creating as much competition as possible.
The issue of the exclusivity term for biologics is a major one for both the TPP, which was signed in February, and the Transatlantic Trade and Investment Partnership (TTIP), which is under negotiation with the European Union, Hatch said. The Europeans, he said, have indicated that they effectively have a 12-year exclusivity period.
On another TPP front, Sen. Elizabeth Warren (D-Mass.) said on a conference call hosted by Public Citizen that she supported a letter signed by more than 200 law and economic professors urging lawmakers to oppose the TPP because it includes provisions that allow investors to bring cases against nation-states on the basis of commitments in the agreement. Warren noted that Democratic presidential candidate Hillary Clinton and her running mate Sen. Tim Kaine (D-Va.) oppose the TPP in part because of these provisions known as the investor-state dispute settlement mechanism (ISDS).
To contact the reporter on this story: Len Bracken in Washington at email@example.com
To contact the editor responsible for this story: Jerome Ashton at firstname.lastname@example.org
The letter from the law and economic professors is available at http://www.citizen.org/documents/isds-law-economics-professors-letter-Sept-2016.pdf.
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