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How 'ObamaTrade' Will Drive Up The Cost Of Medicine Worldwide

Authored by Julia Belluz, originally posted at Vox.com,

After nearly eight years of negotiations, the United States and 11 other countries have finally reached consensus on the Trans-Pacific Partnership, one of the largest trade deals in a generation that'll involve nearly half the world's GDP.

The sprawling deal would affect a variety of issues, including tariffs, labor rights, and international investment. But the deal's most controversial provisions are the ones limiting competition in the pharmaceutical industry. According to Doctors Without Borders, "The TPP will still go down in history as the worst trade agreement for access to medicines in developing countries."

Though the final text of the agreement won't be available for at least another month, here's what we know so far.

The TPP will drive up costs for some of the most expensive drugs on the market in the poorest countries

One of the biggest sticking points in the negotiations had to do with data protection for biologic drugs.

Biologics are treatments made from biological sources, including vaccines, anti-toxins, proteins, and monoclonal antibodies for everything from Ebola to cancer. As the Brookings Institution explains, biologics are much more structurally complex than regular "small-molecule drugs" and are therefore more difficult and expensive to make, costing on average 22 times more than nonbiologic drugs.

Because of the high prices of these drugs, companies are very interested in developing "biosimilars" - cheaper copies of the original drugs, similar to generic versions of pharmaceuticals. The reason these biosimilars are so cheap is that manufacturers can usually just rely on data from clinical trials submitted by the maker of the original biologic. But, of course, the maker of the original drug doesn't want everyone using its data and making cheap knockoffs.

So in the United States, there are really protective rules around this: Any maker of a biologic gets 12 years of data exclusivity. The FDA can't approve a similar drug that relies on the original data during this time. (Theoretically, other companies could conduct their own trials to create a biosimilar, but because this is so expensive, it defeats the point.) By contrast, in other countries, there are looser rules - or no rules - around such data exclusivity. Japan offers eight years, for instance. Brunei offers zero.

As part of the TPP, the United States (and the pharmaceutical lobby) had been pushing to get every country to agree on 12 years of data protection for biologics. The final agreement falls somewhere in between, with a period of data exclusivity from at least five to eight years, according to the New York Times.

This means the agreement will prevent more affordable biosimilars from entering the market for a longer period of time in places that previously had no bar to entry. And the burden of this provision will be felt by the world's poorest countries, according to Judit Rius Sanjuan, the legal policy adviser for Doctors Without Borders.

"Peru, Vietnam, Malaysia, and Mexico - they had zero monopoly protection on data for biologics," she said. Now they'll have to wait at least five years before allowing cheaper biosimilars onto the market. "It's a loss for people in developing countries. They'll face higher prices for longer periods of time, and there are many products we need that are biologics."

The TPP could also delay cheaper, generic versions of drugs

Meanwhile, every country has systems for granting patents and legal privileges to the first company to invent a drug - a reward for innovation. After these expire, other companies can apply to get their cheaper "generic" copies of these drugs on the market.

At the moment, it's up to countries to decide whether things like a small change in a drug molecule should warrant a patent extension. But the final TPP creates patent-related obligations in countries that never had them before, explained Rius Sanjuan. To put it simply, this would directly target a country's ability to define its own patent law and put a higher standard on when generics can become available.

Critics believe these provisions will likely to limit the availability of cheaper generics. "We know from experience that more expansive patent laws end up reducing the availability of generic medicines," said Yale law professor and global health researcher Amy Kapczynski, who wrote about the deal's health impact in the New England Journal of Medicine. "When you start mucking around in the precise ways countries can define your patent laws," she said, "you limit everyone’s policy flexibility."