In my last blog post, I discussed the development of intellectual property law within the trade industry. With TRIPS (the Trade-Related Aspects of Intellectual Property Rights) as a minimum standard for IP protection, the United States has broadened IP laws even further through a combination of bilateral and multilateral free trade agreements (FTAs). This protection is specifically crucial for the pharmaceutical industry, considering that 10-30% of drugs in developing states are counterfeit. But the balancing act of enacting IP protection is especially important in these nations because too stringent of laws may serve as a great obstacle to growth.
The Trans-Pacific Partnership (TPP), which is currently the largest U.S. FTA to date, was just agreed upon by 12 Pacific Rim nation states. In addition to eliminating barriers to free trade and heightening environmental standards between and across these nations, the TPP calls for stricter standards for intellectual property. The United States government claims that, “TPP’s Intellectual Property (IP) chapter will help Americans take full advantage of our country’s innovative strengths and help to promote trade and innovation, as well as to advance scientific, technological and creative exchange throughout the region.” This statement is accurate, as existing United States’ intellectual property law is used as a foundation for the agreed-upon provisions in the TPP. However, many of the nations that are parties to the agreement are unlikely to be able to execute the high standards set by the U.S. This is especially true for Vietnam, the weakest and poorest party to the partnership.
The TPP sets a 5-8 year data exclusivity standard for biologics and allows for the process of evergreening, which occurs when drug companies request patents for new uses of old drugs. These are only a few of the strict IP provisions presented in the TPP. Judit Rius Sanjuan, a legal adviser to Médecins Sans Frontières has said, “I am sure it will increase the prices of medicine. It will take components of US law and export them to other countries, and create a new global norm that will change the way the TRIPS agreement was negotiated.” This was exactly the case in Guatemala after the Central American Free Trade Agreement was ratified. Whereas many drugs in the US had already become available in generic forms, Guatemalans were still paying high prices for name brands.
Because it controls the majority of intellectual property worldwide, there is great incentive for the United States to require heightened IP standards. And actually, in many fields such as the tech and film industries, these strict standards are satisfactory. But where human health is involved, it has for a long time been common practice to loosen IP laws. The U.S. has previously relaxed IP requirements in bilateral FTAs with Colombia, Panama and Peru, even including the use of compulsory licensing. If the TPP is ratified, drug prices will likely surge throughout developing nations around the globe, at which point the US will be called upon to help pick up the pieces. This should have been of consideration within negotiating the TPP, among other pitfalls that will come to light if the agreement is approved by Congress.
Read the full text of the TPP at the USTR website here.
A video from June, 2013 that speaks to more issues within the IP chapter of the TPP: