Remarks by Ralph G. Neas on Trans Pacific Partnership

PRESS RELEASE

WASHINGTON, DC (December 17, 2014) —

“Good morning. I’m happy to be here with you. And I am honored to be with my colleagues from AARP, the AFL-CIO, Doctors Without Borders, and Oxfam.

The Generic Pharmaceutical Association (GPhA) has serious concerns about the unbalanced structure of the Trans-Pacific Partnership agreement, or TPP, in its current form. However, the opportunities for substantial improvement are many. Let me touch on five.

First, the TPP fails to strike the right balance between fostering innovation and ensuring expedited access to more affordable medicines. It does too much to extend already generous monopolies enjoyed by brand-name drugs, and too little to ensure that safe, low-cost generic versions are available to patients as soon as legally possible. This is a very serious concern for our industry and for global health.

The generic industry is an American success story. In the past thirty years, generic utilization has increased to 86 percent of all prescriptions filled in the United States, at only 27 percent of total prescription costs. According to the world’s leading healthcare analytics firm, IMS Health, in the past decade generic drugs have saved the U.S. healthcare system nearly $1.5 trillion. That’s trillion with a ”T.”

But the success and importance of generics is not limited to the United States. GPhA member companies also operate in more than 140 countries. And generics account for a growing percentage of all prescriptions filled worldwide.

By including patent provisions that extend brand-name drug monopolies, the current proposal would deprive nearly 800 million people around the world of full access to safe and affordable generic medicines. Indeed, every intellectual property provision affecting pharmaceuticals proposed in the TPP — including patent linkage, patent term extensions, and exclusivity provisions – would delay the launch of generic drugs to the detriment of patients, healthcare budgets and the generic industry.

My second point is that the TPP would lock in policies covering biologic medicines that would contribute to putting these very expensive drugs and vaccines beyond the reach of patients and governments. Biologics are the future of global medicine. They are made from living organisms, and used to treat diseases from cancer and AIDS to rheumatoid arthritis and diabetes. By delaying the entry of biosimilars, the TPP would be setting a terrible precedent in one of the highest-stakes areas of medicine.

One of the striking things about the TPP’s provisions on biologics is their inconsistency with some of the Obama Administration’s own proposals. Specifically, U.S. negotiators are lobbying for an exclusivity period of 12 years for biologics, while for the last four years President Obama’s budget proposals have included a reduction to seven years. Moreover, any trade agreement the United States signs should not undermine Congress’ authority to reduce exclusivity and help the U.S. healthcare system save billions of dollars.

My third point is that generic medicines are more than a driver of healthcare savings. They are a driver of jobs and economic growth. The U.S. generic industry employs more than 60,000 people in 31 states. And generic manufacturers have become major exporters, whose future growth rests on their ability to sell their products in other nations. Given the 86 percent utilization rate I mentioned, to continue to grow and create new jobs, this industry must have access to overseas markets.

Trade agreements are supposed to open markets. The current TPP opens markets for big pharma but closes them for generics. And by doing so, it limits an avenue of vigorous growth for the U.S. economy.

My fourth point is that the TPP is bad healthcare policy. Others will speak to this, but let me just list a few of the ways.

• The current TPP would limit the ability of foreign nations from Japan to Peru to achieve their generic utilization and healthcare savings goals.

• It would make it harder for participating governments to contain costs in publicly supported health care programs.

• In the United States, for example, it would adversely affect generic utilization rules used in healthcare programs such as Medicare, Medicaid and the Veterans Health Administration.

My fifth and final point is simple: there is a better way. The Peru, Colombia and Panama Free Trade Agreements were based on a 2007 bipartisan compromise, and they are a model that works. While expanding intellectual property protections, they also restored some balance to U.S. trade policy by ensuring access to generic medicines. We should follow the lead of these agreements in repairing the TPP.

GPhA is working hard to ensure that access and fairness are priorities in international trade agreements. The TPP fails both those tests, as well as the tests of economic growth and sound healthcare policy. For all these reasons, we need to radically improve this agreement. We must hope it’s not too late to do so. And we must act accordingly.”

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