I had the opportunity last week to attend the Chicago round of trade negotiations for the Trans-Pacific Partnership (TPP) and make a presentation to treaty negotiators from nine countries, including the United States. I believe I was the only state legislator participating in this event, where I spoke as part of a panel on pharmaceutical provisions in trade agreements that could undermine the ability of states to negotiate the lowest rates for drug reimbursements and pricing. (The Trans-Pacific Partnership Agreement is an Asia-Pacific regional trade agreement currently being negotiated among the United States and eight other partners, including Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam.)
Trade policy has direct impacts on Maine businesses – both positive and negative – and can override Maine law concerning environmental rules, health policy, and pharmaceutical pricing. I am lucky to have been appointed recently to the Intergovernmental Policy Advisory Committee, which was established by Congress to advise the U.S. Trade Representative on the impact of trade agreements on state laws. Even so, as one of only a few state officials who are directly consulted on trade policy, I can say that while I appreciate the access, state consultation is a pretty hit-or-miss affair.
This year the Maine Legislature unanimously passed a bipartisan joint resolution, HP 1552, regarding states' rights in international trade policy, posted here. The Joint Resolution calls on the President of the United States, the United States Congress and the United States Trade Representative to "seek a meaningful consultation system that increases transparency, promotes information sharing, allows for timely and frequent consultations," and urged and requested "that state laws that are subject to trade agreement provisions regarding investment, procurement or services be covered by a positive list approach, allowing states to set and adjust their commitments and providing that if a state law is not specified by a state as subject to those provisions, it cannot be challenged by a foreign company or country as an unfair barrier to trade."
I am one of many state lawmakers who are concerned that language that may be under consideration for inclusion in the TPP treaty will result in increased costs of health care for our citizens and for the state budget. My goal in going to Chicago and in participating in the official stakeholder presentations there, was to send the message that the trade agreements must not raise already expensive drug prices, limit the introduction of less expensive generic versions of drugs, or interfere with Maine's ability to negotiate prices under MaineCare and for seniors. Currently, Maine receives on average 50% of every dollar spent on prescription drugs in public programs back into the general fund in the form of rebates from drugmakers.
Obviously, especially in this time of fiscal constraints, we don't want to see any policy changes that would add to our state budget costs.
In the TPP talks, according to an analysis of leaked text and analysis of a rather general public medicines white paper that was issued this week by USTR, the US has proposed provisions that would extend monopoly rights of pharmaceutical companies; would remove safeguards that allow patent applications to be challenged before they are granted; would allow patents to be granted for minor variations to existing drugs; and would provide extra rights for pharmaceutical companies in court.
Some health activists have gone so far as to call the US position "whitewash" and "Orwellian." Read what American University law professor Sean Flynn has to say here.
The pharmaceutical industry is also lobbying for further restrictions on the use of clinical trial data by the manufacturers of generic medicines seeking to register their generic versions - turning to secret trade deals to prop up profits as their blockbuster drugs go off patent. Secret cables leaked by WikiLeaks confirm the industry's hands-on approach to USTR on these issues.
The Center for Policy Analysis on Trade and Health (CPATH) and other public health experts have called on trade officials to reverse course and protect health. CPATH's research established that intellectual property rules in the Central American Free Trade Agreement (CAFTA) raised medicine prices in Guatemala by up to 856%. The Austrialia-U.S. Free Trade Agreement authorized drug company intrusions into Australia's cost-effective drug purchasing system, resulting in increased prices.
The US is also seeking provisions in the TPP agreement that would expose governments to legal action by foreign companies if governments introduce policies (including policies to protect public health) that affect these companies' profits. Similar trade provisions are the basis for a legal challenge by Phillip Morris to Uruguay's tobacco packaging warning label rules. Maine, like other US states, has actively sought to reduce smoking rates, and the use of trade provisions to reverse hard-won gains in public health is very disturbing.
All of this is cause for real concern. Somehow, the US government seems to have confused the interests of large pharmaceutical companies with the public interest in access to medicines. Sometimes those interests overlap, but often they do not. Checking in with state legislators who struggle to maintain and expand access to affordable medicines with increasingly tight state budgets would be a useful reality check for US trade negotiators.