[Ip-health] State impacts of Korea FTA

[Sean Flynn]

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FOR IMMEDIATE RELEASE

March 21, 2007



CONTACT: Sean M. Flynn

202-274-4157 | sflynn@wcl.american.edu



Program on Information Justice and Intellectual Property and State
Legislators Warn House Committee on Ways and Means that Korea FTA May
Threaten States' Right to Control Medicaid Drug Costs



Sean Flynn, Associate Director of American University Washington College
of Law's Program on Information Justice and Intellectual Property
(PIJIP), submitted testimony to the House Ways and Means Committee today
warning that USTR and pharmaceutical company efforts to restrict South
Korea's drug formulary could threaten state drug price negotiations.



"At least 40 states use open formularies, commonly called Preferred Drug
Lists, to control Medicaid drug spending," Professor Flynn explained.
"These state policies, which have been instrumental in reducing Medicaid
prescription drug prices for cash-strapped state programs, may be
preempted by provisions in the Free Trade Agreement being negotiated
with Korea.  The Congress appears to have no notice that the USTR is
negotiating away the rights of states to hold down medicine costs as it
attacks so-called 'discrimination' against brand name drugs by Korea's
public health formulary."



Yesterday, Co-Chairs of the state government Working Group on
Prescription Drugs and Trade, which receives research and technical
assistance from PIJIP, submitted a letter to the Committee expressing
"strong opposition to USTR's efforts to use provisions in the proposed
US-Korea Free Trade Agreement (FTA) to undermine the use of drug
formularies for managing prescription drug costs."



At yesterday's subcommittee hearings, both USTR and PhRMA testified that
the US seeks substantive and procedural changes to the operation of the
Korean Health Insurance formulary-based reimbursement system.  These
changes could, in turn, be applied to states through the Federal
preemption clause included in every FTA.



PIJIP's testimony and the letter from the working group to the House and
Ways and Means Committee are available at
http://www.wcl.american.edu/pijip/us_korea_negotiations.cfm



The Working Group on Prescription Drugs and Trade was created by the
National Legislative Association on Prescription Drug Prices (NLARx) and
receives technical support from the Forum on Trade and Democracy and
PIJIP.  PIJIP is a program of American University Washington College of
Law that promotes public interest approaches in the law governing
information protection and dissemination and to the regulation of goods,
such as medicines, commonly subject to intellectual property protection.