A draft of part of the Trans-Pacific Partnership trade deal leaked to the Politico website suggests the US is demanding increased protections for pharmaceutical companies, restricting access to the lower-cost generic versions of drugs that agencies such as New Zealand's Pharmac buy.
The draft copy of the intellectual property chapter of the trade agreement as it stood on May 11, before the Guam negotiating round, includes what is known as 'patent-linkage' provisions which would prevent regulators in TPP countries approving generic versions of drugs whenever there were unresolved patent issues, the Washington-based Politico website reported.
The draft would make linkage mandatory, as it is in the US, allowing drug companies to fend off generics by claiming patent infringements, the website reported. It cited Heather Bresch, chief executive of generic drug maker Mylan, as saying mandatory patent linkage would amount to "a recipe for indefinite evergreening of pharmaceutical monopolies."
The issue of generic drugs is sensitive in New Zealand because drug-buying agency Pharmac takes advantage of the availability of generic versions of medicines to reduce the cost to Kiwis. Generics are made after a brand-name drug comes off patent and typically when the developer's right to keep research secret expires.
Prime Minister John Key and Trade Minister Tim Groser have both said Pharmac's ability to access cheaper versions of drugs won't be compromised by the trade deal. Key said last month there was "no chance of that and no suggestion of that" and he was "quite comfortable that our capacity to have Pharmac, and the benefits New Zealanders enjoy because of it, will be preserved."
The Politico report says the provisions in the draft TPP have implications for so-called biologics, the next big thing for drug companies, which are hugely expensive to develop and tackle conditions including rheumatoid arthritis, hepatitis B and cancer. It cited Doctors Without Borders policy director Rohat Malpini as saying his organisation deemed the TPP "the worst-ever agreement in terms of access to medicines."
To be sure, Politico also cites US trade officials saying the draft may not survive into the final form of the agreement because of the degree of compromise required to get all the signatories on board.
Groser said this week he expects that with US legislators granting President Barack Obama's administration fast-track approval powers, the 12 nations' negotiators will put their real cards on the table after several years of shadow-boxing.
"Now that Congress has spoken, it is show time," Groser said in a speech to the US/NZ Partnership Forum in Auckland this week.
The TPP agreement seeks a trade agreement spanning the Pacific Rim and currently involves 12 countries: New Zealand, Australia, the United States, Canada, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Peru, and Mexico.
Where the deal differs from other free-trade agreements is that it includes alignment of regulatory settings across borders rather than simply removing quotas and tariffs. It has faced staunch opposition from those who claim it undermines national sovereignty through investor-state dispute settlement provisions and through its treatment of intellectual property and medical procurement.