The effects of the Trans-Pacific Partnership on pharmaceutical innovation

The Trans-Pacific Partnership (TPP) is a multi-national trade agreement now being considered by 12 countries. In an insightful commentary in Research in Social and Administrative Pharmacy (RSAP), the ramifications of major components of the agreement are discussed, especially those potentially impacting the worldwide pharmaceutical industry.

According to author Robert A. Freeman, PhD, of the Department of Pharmacy Practice and Administration at The University of Maryland Eastern Shore, Princess Anne, Maryland, USA, there are three main areas of controversy. First, pharmaceutical prices will be driven up, with especially negative effects on low-income countries. Second, there is potential for litigation for individual countries whose policies might affect the financial health of large, multi-national pharmaceutical companies. Finally, the multi-national pharmaceutical industry has an undue, protectionist influence in the negotiations, and its negotiation positions are at odds with public health.

Editor-in-Chief of RSAP, Shane P. Desselle, PhD, of Touro University California College of Pharmacy, and Applied Pharmacy Solutions, adds, "The effect on drug prices, particularly generic drugs, will diminish access to essential medications among underserved populations in developing nations."

With regard to the pricing issue, Professor Freeman discusses the industry-wide form of price discrimination, known as Ramsey pricing, in which prices are set on the basis of a market segment's or country's wiliness and ability to pay. The concern is that if the agreement forces a single price for all countries party to the agreement, this price may well be lower than is economically viable for pharmaceutical companies to maintain.

The litigation question, governed by the investor-state dispute settlement (ISDS) proposal in the TPP, is formulated differently than the World Trade Organization's normal procedures for anti-competitive practices resolution. In the TPP, legal disputes would be tried before a court of private attorneys appointed by the World Bank or United Nations. It is feared that the suits could challenge national laws that violate free market principles outlined in the agreement. The author claims that "The concern is very real; however, it may be overstated in that it is rare for a pharmaceutical company to litigate under current WTO provisions."

Further, Professor Freeman believes that the ISDS proposal may not survive as part of the TPP due to pressure from countries like Australia and New Zealand, which maintain low drug prices as a matter of national health policy.

The United States Trade Representative (USTR) is responsible for the U.S. position on the TPP, and the third concern is that the pharmaceutical industry has been able to exert undue influence in past trade negotiations. The author relates his personal experience as an industry trade association consultant during WTO negotiations, and suggests that the priorities of the USTR are constantly changing, and different industries find themselves in- and out-of-favor at different times.

Although trade policies are often ignored when studying pricing, national financing schemes and comparative health systems, the author suggests that the TPP could affect drug counterfeiting activities, could imperil Australia's and New Zealand's national drug policies, and might significantly affect the profitability of the biologic drug industry.

Professor Freeman concludes with a caution. "While impact of the TPP on public health status in the member states is a valid public policy concern, it should be noted that trade agreements such as the TPP are not concerned with these outcomes, and that it is unrealistic to expect they will be an overriding consideration in the final agreement."

Most Popular Now

Merck invests € 250 million in production value ch…

Merck, a leading science and technology company, today inaugurated its € 170 million Nantong pharmaceutical plant, which is dedicated to producing high-quality pharmaceut...

Read more

Roche launches imCORE, a global network of cancer …

Roche (SIX: RO, ROG; OTCQX: RHHBY) has launched the global cancer immunotherapy Centers of Research Excellence (imCORE™) Network. This network brings together many of the...

Read more

New research shows promise for immunotherapy as HI…

Immunotherapy has revolutionized treatment options in oncology, neurology, and many infectious diseases and now there is fresh hope that the same method could be used to ...

Read more

15th Annual eyeforpharma Philadelphia 2017

20 - 21 April 2017, Philadelphia, USA. It's eyeforpharma Philadelphia's 15th year; already the largest, most senior and most influential forum for commercial pharma exec...

Read more

Pancreatic cancer set to become third biggest canc…

The number of deaths from pancreatic cancer will overtake breast cancer mortality rates in the EU in 2017, a study has found. The findings, recently presented at UEG Week...

Read more

Merck wins R&D 100 Award for top invention

Merck, a leading science and technology company, received a prestigious R&D 100 Award for its Sanger Arrayed Lentiviral CRISPR Libraries - the first of its kind CRISPR li...

Read more

Regorafenib from Bayer submitted to health authori…

Bayer has announced the submission of applications to extend the marketing authorization for its oral multi-kinase inhibitor regorafenib in the U.S., Japan and Europe, fo...

Read more

Researchers discover way to inhibit major cancer g…

Researchers at the University of Illinois at Chicago have identified a new way to block the action of genetic mutations found in nearly 30 percent of all cancers. Mutatio...

Read more

Genetically engineering disease-fighting cells

The human body produces T cells to recognize and fight disease. Each T cell has a unique T cell receptor (or TCR) on its surface that surveils small fragments of proteins...

Read more

New European study highlights differing priorities…

Results from a survey analysing the prescribing behaviour of 500 European physicians treating patients with advanced non-small cell lung cancer (NSCLC) have been publishe...

Read more

Benzodiazepine and related drug use increases hip …

The use of benzodiazepines and related drugs increases the risk of hip fracture by 43% in persons with Alzheimer's disease, according to a new study from the University o...

Read more

Among antidementia drugs, memantine is associated …

A recent study from the University of Eastern Finland shows that among users of antidementia drugs, persons using memantine have the highest risk of pneumonia. The use of...

Read more

Pharmaceutical Companies

[ A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Z ]