Researchers raise TPP legislation concerns
pharmafile | January 25, 2016 | News story | Manufacturing and Production, Sales and Marketing |Â Â Legislation, Trans-Pacific Partnership, tpp, trade agreementÂ
Academics have warned that global trade regulations under consideration by the US and other countries could prevent access to medicines in developing countries.
The Trans-Pacific Partnership (TPP) is a multi-national trade agreement now being considered by 12 countries. And the ramifications of major components of the agreement are currently being discussed, by Governments and academics, especially those potentially impacting the global pharma industry.
In a commentary piece in the journal Research in Social and Administrative Pharmacy (RSAP), researchers argue that there are three potential areas of controversy. First, pharmaceutical prices will be driven up, with especially negative effects on low-income countries. Second, there is potential for litigation for individual countries whose policies might affect the financial health of large, multi-national pharmaceutical companies. Finally, the multi-national pharmaceutical industry has an undue, protectionist influence in the negotiations, and its negotiation positions are at odds with public health.
Editor-in-Chief of RSAP, Dr Shane Desselle, of Touro University California College of Pharmacy adds: “The effect on drug prices, particularly generic drugs, will diminish access to essential medications among underserved populations in developing nations.”
With regard to the pricing issue, the authors discusses the industry-wide form of price discrimination, known as Ramsey pricing, in which prices are set on the basis of a market segment’s or country’s wiliness and ability to pay. The concern is that if the agreement forces a single price for all countries party to the agreement, this price may well be lower than is economically viable for pharmaceutical companies to maintain.
The litigation question, governed by the investor-state dispute settlement (ISDS) proposal in the TPP, is formulated differently than the World Trade Organisation’s normal procedures for anti-competitive practices resolution. In the TPP, legal disputes would be tried before a court of private attorneys appointed by the World Bank or United Nations. It is feared that these lawsuits could challenge national laws that violate free market principles outlined in the agreement.
“The concern is very real; however, it may be overstated in that it is rare for a pharmaceutical company to litigate under current WTO provisions,” says the author of the article, Professor Robert Freeman, of the Department of Pharmacy Practice and Administration at The University of Maryland Eastern Shore, although he adds that he believes that the ISDS proposal may not survive as part of the TPP due to pressure from countries like Australia and New Zealand, which maintain low drug prices as a matter of national health policy.
Professor Freeman says that the pharma industry has been able to exert undue influence in past trade negotiations – and cites his personal experience as an industry trade association consultant during WTO negotiations. This, he warns, could imperil countries’ national drug policies, and might significantly affect the profitability of the biologic drug industry.
Professor Freeman concludes with a warning that the legislation could derail efforts to make sure drugs, in particular generic drugs, are affordably produced and sold. “While impact of the TPP on public health status in the member states is a valid public policy concern, it should be noted that trade agreements such as the TPP are not concerned with these outcomes, and that it is unrealistic to expect they will be an overriding consideration in the final agreement.”
Lilian Anekwe
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