*Generics, Consumer, Labor Groups Press Obama To Change TPP Drug Rules* Posted: December 24, 2014
Five groups representing generic drug makers, workers, retirees and other interests have joined forces to urge President Obama to back off U.S. proposals in the Trans-Pacific Partnership (TPP) on intellectual property (IP), drug pricing and investment that they argue would adversely affect access to affordable medicines and undermine public health programs. In a Dec. 16 letter to Obama, the groups objected to U.S. demands in the IP chapter for countries to provide 12 years of data exclusivity for biologic drugs; require patents to be available for new uses of existing drugs; and put in place patent linkage systems. Second, they charged that the drug pricing annex proposed by the U.S. could "jeopardize" government efforts to contain costs in public health care programs. The annex would lay out procedural disciplines to be followed by government bodies that set drug reimbursement rates in such programs. Finally, some of the letter's signatories objected to the proposed investor-state dispute settlement (ISDS) mechanism on the grounds that it could be used by brand-name pharmaceutical companies to challenge laws and regulations put in place by governments to contain costs in public health care programs. Signing the letter were the Generic Pharmaceutical Association (GPhA); the AFL-CIO; the American Association of Retired People (AARP); Doctors Without Borders (MSF); and the anti-poverty group Oxfam. All of these groups have previously raised their objections to the administration separately, but their Dec. 16 letter to Obama represents the first time they have made their case jointly. The letter acknowledged that the groups have different "perspectives and interests," but emphasized that they are united by their shared worries about limiting access to affordable medicines and competition from generics. "We sincerely hope that the U.S. will take into account our concerns as the TPP negotiations proceed into their final stages, to ensure that trade commitments entered into by the U.S. do not undermine legitimate generic competition, access to affordable drugs or public health policies, whether here in the U.S. or around the world," the letter concluded. *At a Dec. 16 press conference, many of the groups indicated that they would oppose a TPP deal* if it reflected current U.S. proposals, but stopped short of saying they would oppose any agreement. The groups do not have any formal plans for joint lobbying efforts on TPP, but are open to further collaboration while also raising their objections individually. GPhA President Ralph Neas emphasized at the press conference that generic drug makers want to steer the TPP negotiations toward a balanced outcome that they could support. "We have said we do not want to kill the Trans-Pacific Partnership; we want to improve it," he said. GPhA supported U.S. free trade agreements with Colombia, Panama and Peru, but not the U.S.-Korea FTA. Thea Lee, deputy chief of staff to AFL-CIO President Richard Trumka, said the groups believe there is potential for a "bipartisan press" on the administration on the TPP public health issue next year when the trade battle heats up in Congress, including within the context of the debate over fast-track negotiating authority. AARP Director of Federal Health and Family Advocacy Ariel A. Gonzalez told *Inside U.S. Trade *after the press conference that it was "premature" to say at this time whether his group would oppose a final TPP and if it did, how hard it would fight against congressional passage. "If it's something that's so egregious that we get nothing that we ask for, for example, I think we would have to seriously consider mobilizing folks and going to our grassroots database," he said. The AARP, which has a membership of 37 million older Americans, has not previously been deeply involved in trade policy prior to TPP and has not yet taken a position on fast track. AARP first became active on TPP in fall 2013, and since that time has pressed the Obama administration for changes to its proposals on IP, the drug pricing annex and ISDS. It has continued to do so even after U.S. trade officials in January signaled they were backing off an earlier, more expansive proposal for the drug pricing annex (*Inside U.S. Trade*, Jan. 17). AARP has lobbied members of Congress to weigh in with the administration on these issues, including by generating a Dec. 1 letter from three Senate Democrats that urged U.S. officials to carve out U.S. government health programs from the scope of the drug pricing annex and ISDS. That letter to U.S. Trade Representative Michael Froman and Health and Human Services Secretary Sylvia Burwell was signed by Senate Finance Committee members Sherrod Brown (D-OH) and Ben Cardin (D-MD), as well as retiring Senate Health cCmmittee Chairman Tom Harkin (D-IA). One source argued that Cardin's signature carries weight since he has voted for past trade agreements and could thereby be a potential supporter of TPP. AARP will likely now turn its efforts to the House and try to generate a similar letter, this source said. "We would like to continue to put pressure on negotiators and other folks by meeting with members of Congress, hopefully having them weigh in," Gonzalez said at the press conference. Both he and GPhA's Neas said one way they will try to convince the administration to change course in the TPP is by arguing that its negotiating positions are at odds with some of the president's own proposals. For instance, Obama in his last three annual budget proposals has called for reducing the length of marketing exclusivity for biologic drugs in the United States to seven years from the current 12 years. "We'll try to explain to the president, why is your administration at war with itself? You're making all of these points in the budget about biologic exclusivity from 12 to 7," Neas said. *Oxfam and MSF have also objected to the current U.S. proposal in TPP to create two tiers of drug *IP protection -- a higher one that would ultimately apply to all TPP countries and a lower one that would initially apply to low-income TPP members. At the press conference, Oxfam America Senior Policy Adviser Stephanie Burgos argued that this approach is inadequate for two reasons. First, even the lower IP standard would contain obligations that go beyond those included in U.S. FTAs with Peru, Colombia and Panama as a result of the so-called May 10, 2007 agreement. In particular, she cited the requirement that TPP countries make patents available for new uses, which was not part of the May 10 template. The second reason, Burgos said, is that the options under consideration by TPP negotiators for determining which countries are included in which tier and what their transition period will be "are inadequate to give developing countries the flexibility they need to be able to ensure access to affordable medicines for their populations." She did not elaborate further at the press conference, but MSF and Oxfam outlined their arguments in a June 2014 brief that they shared with some TPP negotiators. The brief takes issue with the two-tiered U.S. IP proposal tabled in November 2013, which would have divided countries into low-income and high-income brackets based on the classification system established by the World Bank. Among other things, it argued that drawing any line between rich and poor countries is arbitrary and unfair; that the World Bank system is outdated; and that this approach fails to address that fact that poverty and income inequality exist even in richer countries, according to a copy obtained by *Inside U.S. Trade*. The U.S. proposal to use a country's income level as the threshold for determining when it would have to take on the higher IP standard is one of three proposals currently on the table in the TPP negotiations on the transition mechanism, although sources say it does not have much support among other countries. *Inside U.S. Trade - 12/26/2014, Vol. 32, No. 51*
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