As readers of this blog are well aware, one of the most controversial issues in the Trans Pacific Partnership was the length of data exclusivity for biologic drugs. The U.S. sought a twelve year period (which would be consistent with current U.S. law) during which competitors would be unable to enter the market to compete with innovator firms unless they duplicated safety and efficacy data to obtain regulatory approval. Other countries sought lesser terms, arguing that long periods of data exclusivity raised the price of biologic medicines by blocking generic competition.
During the negotiations, however, the Obama administration repeatedly proposed budgets that sought to reduce the term of biological exclusivity in the U.S. to seven years. The budget documents argued this would save U.S. taxpayers billions of dollars.
Data exclusivity for biologics became the last negotiated issue of the TPP. The final talks centered over whether the required term of exclusivity would be five or eight years, and the final agreed text required five years. This has angered some lawmakers who wish the U.S. had held out for the longer period, and some have suggested that this issue should be revisited before the U.S. ratifies the agreement. Changing the TPP is obviously tricky as the negotiations over the text are finished, but it has been suggested that the U.S. could use side letters bilaterally negotiated with TPP partners to increase the length of exclusivity. Moreover, the U.S. Trade Representative (USTR) has suggested his office might use the period when countries are implementing the agreement into their national laws to apply pressure in areas where the U.S. did not get what it wanted at the negotiating table.
If one assumes that USTR would be seeking additional concessions on the term of data exclusivity, then this morning’s release of the Obama’s Administration’s 2017 Budget could complicate matters. Once again, the Budget calls for seven years of exclusivity:
The Budget proposes … three previously proposed reforms designed to increase access to generic drugs and biologics by stopping companies from entering into anti-competitive deals intended to block consumer access to safe and effective generics, by awarding brand biologic manufacturers seven years of exclusivity, rather than 12 years under current law, and by prohibiting additional periods of exclusivity for brand biologics due to minor changes in product formulations. These proposals would save the Federal Government $21 billion over 10 years. [page 66]
It should be noted that the Budget is a political document, in which the Administration lists policy positions that it may or may not fight to achieve. Although past budgets have proposed shortening the term of exclusivity for biologics, the Administration has not really pushed to actually change the law here.
However, this illustrates the problem with the use of trade agreements to bind the country to norms on intellectual property that exceed those negotiated in TRIPS. If trade officials succeed in committing countries to an eight or twelve year period of data exclusivity, then other government officials lose the option to really reduce the period back to seven years. (This is, of course, true for all laws subject to the TPP and other agreements.)
