Issues

Free Trade Agreements

GPhA Position

Current U.S. intellectual property law and regulation of the pharmaceutical market have helped to maintain a careful balance between supporting access to affordable medicine and protecting pharmaceutical innovation and intellectual property. So that Free Trade Agreements (FTAs) do not disrupt this balance, the terms of these agreements should not provide more intellectual rights and protections to brand companies than afforded under U.S. law. Correspondingly, FTAs should include provisions that support consumer access to affordable medicine. GPhA urges the Obama Administration to build upon recent progress made in U.S. trade policy that has helped to secure such balance. Further, GPhA encourages the Office of the U.S. Trade Representative to work with Congress to make certain that future FTAs also reflect that balance.

Key Points

FTAs should not delay timely access to affordable medicines by providing brand pharmaceutical companies with greater intellectual property rights than they enjoy under current U.S. law.

Future FTAs should put the consumer interest of having access to affordable medicine on an equal footing with the protection of pharmaceutical innovation.

Any reauthorization of Trade Promotion Authority should restore the balance in U.S. trade agreements between drug innovation and access to affordable medicines through generic competition.

Background

The United States has built a strong health care system by fostering a balance between pharmaceutical innovation and access to affordable medicines. Unfortunately, past U.S. FTAs upset this balance by "cherry-picking" features of the U.S. system - features designed to enhance the brand pharmaceutical sector - but neglecting to include critical provisions that support generic competition.

In May 2007, the "bipartisan agreement on trade policy" corrected the worst excesses of recent trade agreements for developing country trade partners. Yet, while these changes reflect sound public policy and were adopted for a few developing countries, they did not extend to any other free trade agreement. The new bipartisan trade policies strengthen protection for patents and test data in these markets, and incorporate flexibilities that reduce the likelihood of: (1) generic companies being unable to challenge questionable patents that block market entry; and (2) affordable generic versions of life-saving drugs becoming available in the United States but remaining unavailable in our trade partner nations.

GPhA worked closely with Bush Administration officials and Congressional staff to ensure that the bipartisan agreement on trade policy represented a positive step forward for our nation’s trade agreements. The U.S.-Peru Free Trade Agreement, which fully incorporates these changes, passed the U.S. Congress with overwhelming bipartisan support in November 2007.

Done properly, free trade agreements are an important tool in promoting competition, which is good for consumers here and abroad and good for a strong, vibrant pharmaceutical industry. We believe it is critically important to ensure that FTAs balance the interests of access and innovation, especially as U.S. negotiations expand to Asia. Thus, GPhA strongly urges that the new trade policies be extended to all future FTAs and those currently under negotiation, regardless of whether the trading partner’s economic status is deemed "developing" or "developed."

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