U.S. struggles with pharmaceutical goals in Asia trade talks

Thu Mar 28, 2013 5:25pm EDT

* Drug companies, advocates at odds over goals for pact

* White House undecided on protection for biologic medicines

* U.S. won't make new proposal at next TPP round in May

By Doug Palmer

WASHINGTON, March 28 (Reuters) - The United States is striving to find an appropriate balance in Asia-Pacific free trade talks between providing strong patent and data protections for U.S. drug manufacturers and ensuring poor people have access to medicine, a U.S. trade negotiator said on Thursday.

"We're looking to promote innovation and R&D (research and development) that results in the development of new medicines. But we are also - and this is just as important - we are trying to promote access to medicines for all," Deputy Assistant U.S. Trade Representative Probir Mehta said.

The remarks at a discussion organized by the Washington International Trade Association show the conflicting pressure on President Barack Obama's administration in talks on the Trans-Pacific Partnership (TPP), a proposed free trade agreement between the United States and ten countries in the Asia-Pacific region that negotiators hope to conclude this year.

Mehta said the United States would not make a new proposal on pharmaceuticals when TPP negotiators meet in Peru in mid-May for their 17th round of talks but would continue to exchange information on each country's policies "with a view to finding possible common ground."

U.S. drug manufacturers want the strongest possible intellectual property rights (IPR) protections in the pact, but advocacy groups such as Oxfam and Doctors Without Borders are warning TPP countries such as Vietnam and Malaysia that such terms threaten to raise the price of medicines in the region by restricting production of generic drugs.

Former U.S. Trade Representative Ron Kirk summarized the situation at a meeting of the President's Export Council shortly before he left office this month.

"It is very difficult to convince (other TPP countries) of the need to embrace, accept, and implement robust IPR chapters when, many times, we haves NGOs (non-governmental organizations) from here in the United States that are sitting there and giving them contrary information," Kirk said.

The tension is illustrated in the area of "biologic medicines," where U.S. drug companies such as Pfizer and Eli Lilly and many members of Congress want test data for new drugs protected for 12 years in the TPP pact to delay the development of generic versions.

Congress provided 12 years of data protection for biologics in Obama's healthcare reform legislation, the Affordable Care Act, in line with what many experts say is needed to recoup the average $1.2 billion cost of developing the drugs.

But in annual budgets, the White House has proposed lowering the period of data exclusivity to seven years to encourage faster development of generic versions of the drugs and to save billions in Medicare and Medicaid costs.

So far, U.S. negotiators have not asked for 12 years of data exclusivity for biologics in the TPP, prompting Senator Orrin Hatch, the top Republican on the Senate Finance Committee, to recently ask whether the Obama administration was trying to change U.S. law to the lower standard through the TPP talks.

On Thursday, Mehta said "biologic medicines are clearly the future of the biopharmaceutical industry and certainly a very important area of innovation in the United States. But at this point, we are still reflecting on input and discussing this issue with our trading partners."

Although that stance might seem encouraging for groups that favor early availability of generic medicines, Stephanie Burgos, a senior policy adviser at Oxfam America, said she fears the Obama administration is simply waiting until the end of the negotiation to press its demands, forcing poorer TPP countries such as Vietnam and Malaysia to decide whether to accept tough intellectual property provisions or walk away.

"Instead of a compromise, it's like 'let's put this on hold until everything else is agreed' in the hope that countries that are objecting to the provisions won't have the wherewithal to continue objecting," Burgos said.

Jay Taylor, vice president for international affairs at Pharmaceutical Research and Manufacturers of Americas, said generic versions of most drugs are already available in TPP countries and shouldn't be affected by the pact.

"The TPP, if done correctly, should reduce tariffs and extra additive costs to medicines that ultimately hurt patients," Taylor said.

By lifting incomes in the region, it also should make medicines relatively more affordable, he said.

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