Trade deal will lock in high drug prices, hurt seniors

Trade deal will lock in high drug prices, hurt seniors

By Robert Roach, Jr. in The Hill

The United States has concluded negotiations on the Trans Pacific Partnership (TPP) trade deal, and on November 5, 2015, President Obama released the text of the agreement. This started a 90-day period for public review before Congress can take an up or down vote. It is a pact of historic proportions involving 12 countries in Asia and the Americas.

Older Americans should be deeply concerned about this deal. If implemented, TPP will maintain high drug prices for America’s seniors and undermine the sustainability of public health programs like Medicare and Medicaid.

The TPP would enact unprecedented protections for Big Pharma. It would lock in patent exclusivity for biologics – specialty drugs used to treat diseases such as cancer and rheumatoid arthritis.   Allowing pharmaceutical companies to maintain a monopoly on these drugs before less expensive generic versions can be made by other companies is against the interest of American consumers.

The TPP would also make it easier for pharmaceutical companies to extend patents on drugs in other TPP countries by simply making small changes to the drugs’ formulas or methods of administration – rather than improving their effectiveness, as is currently required.  This practice, called “evergreening,” could delay the introduction of generic brands even further.

Other provisions in the deal could jeopardize the government’s ability to list and price prescription drugs in Medicare by putting the interest of drug and medical device companies above those of taxpayers and beneficiaries. TPP requires that the government agency setting drug polices make available a review process for healthcare reimbursement decisions and to follow TPP rules and principles.  This will grant pharmaceutical and medical device manufacturers the opportunity to contest a decision and seek higher reimbursement rates.

Moreover, corporations could use the Investor State Dispute Settlement process to bypass the U.S. legal system and challenge government measures in a secret, international court if the industry feels certain requirements in TPP are not being met and the government’s policy “unfairly” impacts the company’s expected future profits.

Americans pay the highest prices for prescription drugs in the world.  Last year, drug prices increased by 13 percent, eight times the rate of inflation. High drug prices not only hurt families, they drive up the amount that taxpayers pay to support Medicare and Medicaid, weakening these programs and draining government coffers and the Medicare trust fund.

Bad trade deals have resulted in millions of lost jobs, lower wages, and too much power to corporations over the last 20 years. But there is still time to stop this one. Ratification of TPP is contingent upon a vote in Congress. When that vote occurs, the members of the Alliance for Retired Americans will be paying close attention to what Congress does – and so should anyone else who needs Medicare or prescription drugs.

Roach is president of the Alliance for Retired Americans.  He was previously general secretarytreasurer of the IAMAW.