The Morning Call | May 7, 2007
Drug firms against trade changes
They are lobbying to stop moves that would curb benefits to the industry.
By Mark Drajem of Bloomberg News
U.S. drugmakers, among the biggest proponents of free-trade agreements, are now lobbying to stop Democrats and the Bush administration from reworking pending trade deals to curb provisions that benefit the industry.
In the works are proposals pushed by Democrats to revise trade agreements with Panama and Peru that would make it harder for U.S. drugmakers to keep testing information on their drugs secret from generic manufacturers, according to business lobbyists and activists briefed on the details.
The negotiators also want to remove requirements that drug patents be extended if the companies face long delays in getting approval to sell their products in those countries, they said.
The proposals, if adopted as part of a larger package of changes, would mean House Ways and Means Chairman Charles Rangel and the White House would cut provisions the United States insisted upon when those trade agreements were being negotiated.
’’This is something we’re giving up unilaterally, without asking anything in return,’’ said Grant Aldonas, a former Bush administration trade official and fellow at the nonpartisan Center for Strategic and International Studies in Washington. ’’But it’s become the quid pro quo to get the deal.’’
Health activists back the changes, saying they will mean cheaper life-saving medicines for AIDS victims and others in poor nations, according to Rohit Malpani of Oxfam America.
The Pharmaceutical Research and Manufacturers of America, a Washington-based trade group that lobbies on behalf of companies such as Pfizer Inc. and Merck & Co., counters that protecting patent rights abroad is crucial to their ability to develop new, life-saving drugs and to feel confident they will be able to export those drugs.
’’The proposals are evolving and there are ongoing discussions,’’ said Mark Grayson, spokesman for the industry group. ’’Mr. Rangel’s objectives and our objectives are similar: We want to get medicines to people who need them.’’
Also, prospects for an overall pact between the White House and Rangel on pending free-trade agreements with Panama and Peru dimmed this week, after both sides said they were ready to sign off on a deal a week ago.
Republicans ’’have serious reservations about what they agreed to,’’ Rangel said Thursday, according to The Hill newspaper. On Friday, Rangel and Jim McCrery, the top Republican on the panel, released a joint statement saying they would ’’continue working into the foreseeable future to resolve any remaining differences.’’
Health advocacy groups say the rules in previously negotiated trade deals increase the price of drugs for people in other nations.
Since the United States implemented a trade agreement with Jordan in 2001, prices for medicines there have increased by 20 percent, threatening the sustainability of the government-run health program, according to a study this year by Oxfam.
In Guatemala, thousands of protesters stormed the streets of Guatemala City in 2005 to resist U.S.-mandated changes to their drug patent laws as part of the Central American Free Trade Agreement. Sixty drugs not under patent in that country now have their efficacy data under seal, according to Luis Velasquez, senior director of the Association of Guatemalan Pharmaceutical Industries.
Generic drugmakers use the data of innovative drug companies to prove to local health regulatory bodies that their product is safe and effective. Without access to that data, they can’t prove that their copies work.
Velasquez plans a trip to Washington next month to try to persuade lawmakers to rework the protections in Guatemala’s already completed agreement.
The pharmaceutical companies, in filings to the U.S. Trade Representative’s office, argue that much of the $800 million they spend developing each new drug goes into that testing. They also say current trade accords with smaller, lower-income economies, which include drug protection provisions, should set a baseline for future U.S. trade deals with other nations.
’’If you get enough of your ducks lined up in these individual deals, you will get less resistance at the multilateral level’’ such as the World Trade Organization, said Susan Sell, a professor at George Washington University and author of ’’Private Power, Public Law: The Globalization of Intellectual Property Rights.’’
In March, Rangel announced a plan that he said was aimed at finding a balance between promoting access to medicine and protecting development of new drugs.
In each of the pending agreements, pharmaceutical companies can keep the testing data used to show the safety and efficacy of their product secret for five years from the time a company applies for a patent in that country. Under Rangel’s provision, patent protection would start five years from when the company first applies for a patent in the United States, said people familiar with it. Companies often patent medicines first in the United States, and only later move to do so in developing nations.
That step is part of a broader change, pushed by lawmakers such as Democrat Tom Allen of Maine, to align trade policies with public health concerns.