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

FDA approves first biosimilar for the treatment of…

The U.S. Food and Drug Administration today approved Mvasi (bevacizumab-awwb) as a biosimilar to Avastin (bevacizumab) for the treatment of multiple types of cancer. Mvas...

Merck set to join forces with Project Data Sphere …

Merck, a leading science and technology company has announced that it will enter into a strategic collaboration with Project Data Sphere LLC, an independent, not-for-prof...

FDA approval brings first gene therapy to the Unit…

The U.S. Food and Drug Administration issued a historic action today making the first gene therapy available in the United States, ushering in a new approach to the treat...

Boehringer Ingelheim Pharmaceuticals, Inc. receive…

Boehringer Ingelheim Pharmaceuticals, Inc. has announced that the U.S. Food and Drug Administration (FDA) approved CyltezoTM, a biosimilar to Humira®*, in a pre-filled sy...

Asthma medicine halves risk of Parkinson's

Parkinson's disease is a chronic disease with unknown causes. The disease destroys the brain cells that control body movements. Shivering, stiff arms and legs and poor co...

This is how belly fat could increase your cancer r…

It's been well established that obesity is a contributor to cancer risk, but how it actually causes cancer is still a question that hasn't been fully explained. A new Mic...

Sanofi and Regeneron announce that cemiplimab (REG…

Sanofi and Regeneron Pharmaceuticals, Inc. today announced that the U.S. Food and Drug Administration (FDA) has granted Breakthrough Therapy designation status to cemipli...

Tezepelumab significantly reduced asthma exacerbat…

AstraZeneca and Amgen Inc. (Amgen) announce results from the PATHWAY Phase IIb trial of tezepelumab that showed a significant reduction in the annual asthma exacerbation ...

Boehringer Ingelheim initiates Phase IIa study of …

Boehringer Ingelheim and pharmaceutical company Pharmaxis (ASX: PXS) announce that Boehringer Ingelheim has initiated a European and North American Phase IIa trial in NAS...

'Exciting' discovery on path to develop new type o…

Scientists at the University of Southampton have made a significant discovery in efforts to develop a vaccine against Zika, dengue and Hepatitis C viruses that affect mil...

Victoza® reduces the risk of major cardiovascular …

A new analysis of the landmark LEADER trial shows that Victoza® (liraglutide) reduced the risk of major cardiovascular (CV) events in people with type 2 diabetes at high ...

Researchers discover new immunotherapy combination…

Immunotherapy is an emerging field in the global fight against cancer, even though scientists and clinicians have been working for decades to find ways to help the body's...

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 ]