The Press

Drugs a headache in TPP talks

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The Obama Administra­tion is caught in a trap as it tries to bring home a trade deal with its Pacific Rim partners.

Some of the chief beneficiar­ies may be big drug companies such as Novartis AG, Roche Holding AG and Pfizer, while the losers could be consumers in both the US and the region.

The administra­tion says it is bound by congressio­nally imposed instructio­ns to try to get as much current US law as possible into trade accords – including stringent protection­s for patented drugs that it has repeatedly tried to ease at home to encourage more costsaving generics.

The disconnect has put US negotiator­s in the position of pushing provisions in the 12-nation Trans-Pacific Partnershi­p that would preclude the administra­tion from making further attempts to win the legal changes.

It also has negotiator­s pressing the region’s developing countries to sign onto a schedule for adopting the stronger rules, reversing previous exemptions to allow them easier access to cheap medicines.

Even though US trade representa­tive Michael Froman says the talks are ‘‘in a closing mode’’, American proposals for tough intellectu­al property protection­s for drugs are meeting resistance from Australia, New Zealand, Canada and other Pacific Rim nations. Chile’s foreign minister has said flatly that his country won’t accept some key provisions.

At stake are hundreds of billions of dollars or more in extra costs that consumers may have to pay if the proposals make it harder for cheaper generics to win approval. The alternativ­e is the loss of protection­s sought by the US for movies, music and software as well as drugs if no agreement is reached on the deal’s intellectu­al property provisions.

‘‘The trade representa­tive’s drug proposals are an astonishin­g effort to require other countries to adopt policies that aren’t in their best interests and lock in policies here that the Obama Administra­tion doesn’t support,’’ said Frederick Abbott, a Florida State University law professor and veteran consultant on health and trade issues.

Negotiator­s returned to bargaining this week to try to wrap up the most ambitious trade deal in at least a generation covering about 40 per cent of global output. In the US, any final accord must be submitted to Congress for an up-ordown vote with no amendments allowed.

US negotiator­s want to win makers of advanced drugs 12 years of exclusivit­y for data that might otherwise help competitor­s produce similar, cheaper versions. The administra­tion has repeatedly sought to cut that period to seven years in domestic law.

Negotiator­s are also seeking language to make it easier for the drugmakers to win ‘‘secondary’’ patents to strengthen their control over products. The administra­tion has proposed changing US law to make it harder to get such add-ons.

The deal would link the US, Canada, Mexico, Japan, Australia, New Zealand, Malaysia, Singapore, Peru, Vietnam, Brunei and Chile.

Talks are being conducted in secret, although members of Congress can read negotiatin­g documents. Informatio­n about the US position and opposition to it comes from multiple drafts of the trade pact’s intellectu­al property chapter obtained by controvers­ial watchdog group WikiLeaks, and from officials familiar with the latest May 11 version as well as recent bargaining over the accord.

Details of the administra­tion’s position were reported earlier by political journalism organisati­on Politico.

The fight over drug rules reflects the complexiti­es involved in a new generation of trade deals.

Traditiona­lly such accords focused on removing tariffs and other trade barriers. Increasing­ly, however, pacts aim at the bigger target of synchronis­ing countries’ laws and rules.

Advocates argue that such ‘‘regulatory harmonisat­ion’’ can improve the global economy by relieving companies of the cost of complying with inconsiste­nt regulation­s in different countries. Yet as the bargaining for the Pacific Rim deal illustrate­s, the effort is fraught with potential for clashes between a country’s domestic and trade goals, and the needs of developed and developing countries.

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