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The Trans-Pacific Partnership agreement will actually raise drug prices, especially in developing countries, Judit Rius, MSF’s U.S. legal policy adviser says. (Alexander Raths/Getty Images/iStockphoto)
The Trans-Pacific Partnership agreement will actually raise drug prices, especially in developing countries, Judit Rius, MSF’s U.S. legal policy adviser says. (Alexander Raths/Getty Images/iStockphoto)

Trans-Pacific Partnership

Drug prices expected to rise as result of TPP deal Add to ...

The intellectual-property provisions in the Trans-Pacific Partnership agreement will drive up global drug prices and make it harder to treat diseases in developing countries, Médecins sans Frontières (Doctors Without Borders) says.

A month after the final text of the TPP was released, the medical humanitarian organization has completed its analysis of the portions of the massive trade pact that will affect drug costs. Despite changes from earlier leaked versions of the text, there are still serious problems, Judit Rius, MSF’s U.S. legal policy adviser, said. “This is catastrophic. This is very negative. The impact is going to be at multiple levels,” Ms. Rius said in an interview. “First of all, it is going to delay access to generic competition [for brand-name drugs], which is a proven intervention to reduce the price of medicines.”

For generic drug makers, she said, the TPP will create additional legal barriers that will get in the way of making new products, and that will stunt the industry.

The TPP will actually raise drug prices, especially in developing countries, she said, and this “will affect our capacity, and the capacity of the ministries of health with whom we work, to scale up treatment programs and reach as many people as needed.”

More broadly, allowing greater monopoly protection for brand-name drug makers will diminish innovation at other firms, Ms. Rius said. “If you are trying to develop a pediatric formulation of a product, if you are trying to combine different pills into one pill, … if you are trying to improve a medicine and create a second generation, all of that technology and knowledge is going to be protected by secondary patents.”

The final text of the sweeping trade pact, which has been in the works for eight years, was released in early November. Canada is one of 12 countries that have negotiated the pact, although it was the former Conservative government that signed on. Prime Minister Justin Trudeau said his government will wait for parliamentary hearings on the TPP before deciding on ratification. Each country has to ratify the agreement before it comes into effect.

Ms. Rius said there were six problem areas – from MSF’s perspective – in the early leaked versions of the TPP. Three have been eliminated in the final text, although she said some of those were “absurd” in the first place. Among them was a provision that would have made it illegal to oppose a patent before it was granted and another that would have forced governments to allow surgical techniques to be patented.

There are three key remaining problem provisions, according to the MSF analysis. One would allow pharmaceutical companies to “evergreen” their product patents, essentially making small changes to a drug’s use to extend its protection from competition.

Another would extend patent protection if there are delays in regulatory approval of a new product.

A third would allow developers of certain advanced drugs – called biologics – to keep their clinical data private for up to eight years. That would make it much tougher for competitors to create similar drugs, or at least delay that from happening.

This “data exclusivity” rule would be new for some of the countries that are part of the TPP group, although Canada already has a similar provision in place.

Indeed, many of the provisions of the TPP are already part of the Canadian scene, at least in some form, said trade lawyer Larry Herman, of Herman & Associates in Toronto. The former Conservative government had said the TPP was “in line” with Canada’s existing patent laws, and this appears to be true from his read of that part of the text, Mr. Herman said.

Still, he said, from a global perspective “there is no doubt that the agreement increases patent protection and enhances the monopoly rights of the patent owner.”

From the perspective of Canada’s generic drug industry, the TPP has to be looked at in conjunction with the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, said Jim Keon, president of the Canadian Generic Pharmaceutical Association.

CETA, which has not yet taken effect, would extend patent protection for drugs and cut into the business of Canadian generic drug makers – thus boosting drug costs – Mr. Keon said. But it also contains some specific protection for the generic industry to mitigate that impact. It is not clear yet whether the TPP will allow those mitigating measures to be implemented in Canada, he said.

And because of the immense complexity of the TPP, “you’ve got all sorts of potential for misinterpretation here,” Mr. Keon added.

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