[Ip-health] The Hill: Drug Makers Fear Trade Deal from House Dems, Administration

[Mike Palmedo]

http://thehill.com/the-executive/drug-makers-fear-trade-deal-from-house-dem=
s-administration-2007-05-02.html

Drug makers fear trade deal from House Dems, administration

Ian Swanson
May 03, 2007
The Hill

Research-based pharmaceutical companies could be among the biggest
losers if House Democrats and the Bush administration reach an agreement
on trade, industry sources said this week.

The administration is prepared to accept changes demanded by Ways and
Means Committee Chairman Charles Rangel (D-N.Y.) that would lessen
protections in trade deals for brand-name drugs, according to drug
industry sources and business lobbyists closely following talks.

These protections consistently had been included in U.S. trade deals
that were approved by the Republican Congress. For example, the Central
American Free Trade Agreement (CAFTA) included =93data exclusivity=94
provisions that can delay the arrival of generic drugs on the market,
sometimes even after a patent for a brand-name drug expires.

Some public health activists see the shift as a sign that the trend
toward ever-stricter intellectual property rules for drug patents is
turning with a Democratic Congress. =93We=92d see that as an improvement,=
=94 a
policy adviser at the advocacy group Oxfam, Stephanie Burgos, said.

Business lobbyists and some sources in the pharmaceutical industry also
said the trade talks reflect a tougher political climate for
pharmaceutical companies. They noted that while the administration is
drawing a line in the sand over labor talks related to the trade deals,
it is not being as aggressive in defending the pharmaceutical industry.

Industry sources said U.S. drug makers realize they cannot stop the
trade deals from being approved no matter how much they protest if there
is a deal between the administration and Rangel. As a result, they
questioned how strenuously the drug lobby would fight the deals if they
move forward.

Expending political capital on the trade agreements might not make sense
in a context in which U.S. drug producers are under siege on many other
issues, one industry source said, since while international patent rules
are important, U.S. rules are even more valuable. Just last week, the
Senate approved legislation lifting a prohibition on government
involvement in price negotiations between drug makers and Medicare Part
D plans.

One industry source predicted that at a minimum, U.S. drug makers would
oppose pending free-trade deals with Panama, Peru, Colombia and South
Korea that have different provisions than deals approved by the
Republican Congress. He also said the changes =93call into question the
value of the intellectual property protections in the free-trade
agreements=94 for the industry.

Rangel explained his position to drug industry representatives in a
meeting last week, sources said. A spokesman for the Pharmaceutical
Research and Manufacturers of America (PhRMA) said that discussions are
continuing and that proposals on patent rules for pharmaceuticals in
trade deals are still evolving. He said U.S. drug makers share Rangel=92s
objective of providing access to medicines for residents of trading
partners.

Other lobbyists, however, predicted there would be at best only minor
changes to the terms laid out by Rangel and his staff if there were a
separate deal on labor. Rangel is insisting on the changes in response
to long-standing complaints from members of his caucus, including House
Oversight and Government Reform Committee Chairman Henry Waxman (D-Calif.).

Labor issues have been the major sticking point in the talks, and labor
and business sources said those talks hit a snag last week after a
meeting between Rangel and AFL-CIO President John Sweeney when Sweeney
said labor could not support deals that would prevent U.S. labor laws
from being challenged for violating International Labor Organization
principles.

One of the biggest changes Rangel is pushing deals with data
exclusivity, which prevents generic-drug makers from using the clinical
test data used by brand-name drugs to secure marketing approval for
their generic drugs. In the Central American deal, this protection lasts
five years.

This has the effect of preventing generic drugs from coming to the
market. PhRMA has argued that such restrictions are justified to reward
the innovation of the research-based drug companies, and because of
delays that can prevent those drugs from coming to market during their
patent life.

The language Rangel is pushing would start the data-exclusivity clock
once a brand-name drug receives marketing approval in the U.S..

Some activists, however, argue this does not go far enough, and that
poor countries such as Peru and Colombia should not be subject to the
same rules as U.S. law. Burgos said Oxfam=92s position is that these
countries should only be subject to the standards of the World Trade
Organization, and not the stricter terms of U.S. law.

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu