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infojustice.org: Shape of U.S. TPP Pharmaceuticals Chapter
infojustice.org: Shape of U.S. TPP Pharmaceuticals Chapter Emerges
Full post: http://infojustice.org/archives/3871
By Sean Flynn
Sources knowledgeable about the U.S. negotiating position in the TPP confirm that the U.S. has now drafted a pharmaceutical chapter for the TPP negotiations. The chapter is modeled on the Korea-US (KORUS) FTA’s pharmaceutical chapter, as expected, but goes beyond it in various ways.
Objectives. The objectives of the section include a statement recognizing the ability of governments to apply appropriate standards to monitor the quality, safety and efficacy of medicines. But this language does not include recognition of governments’ need to promote the affordability of medicines.
[…]
U.S. Carve-Outs. As has been widely reported, programs for the purchasing and reimbursement of medicines in the U.S. do not comply with most of these standards. Medicaid programs, for example, do not provide substantive appeals for decisions to list a drug on a preferred drug list. The U.S. proposal attempts to protect most U.S. programs from being effected by the proposal through a series of technical carve outs.
[…]
Big picture. The ultimate goal of the TPP chapter, and the Korea and Australia agreements before it, appears to be to turn the negotiation of drug reimbursement rates with pharmaceutical companies into formal rule making, complete with appeals and potential litigation at the back end. The procedural hurdles would decrease the negotiating power of governments to exact price reductions through the kind of market means used by larger insurers. If widely followed in the U.S., one would predict that government programs would begin to pay higher prices than private insurers not bound by the same restrictions, rather than the lower prices that public programs are often able to receive (given their larger economies of scale).
An overriding question for those concerned about the protection of U.S. programs is how long U.S. negotiators can continue to succeed in an agenda to impose substantive restrictions on drug pricing programs by other countries, but not limit its own programs that have similar operation and effects. As Governor Shumlin noted in a recent letter to President Obama:
“[T]here is no guarantee that a TPP Pharmaceuticals chapter would contain the same carve-out (as the KORUS FTA). Even if a chapter was proposed that did include a Medicaid carve-out, state leaders believe it is inappropriate for U.S. trade policy to advance restrictions on pharmaceutical pricing programs that U.S. programs do not meet but for technical carve outs.”
The TPP chapter may be best seen as a significant step toward the pharmaceutical industry’s ultimate goal, which is a binding international agreement on drug pricing that would restrain the ability of governments to use collective purchasing power to demand prices below “market” levels.
Full post: http://infojustice.org/archives/3871
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