For immediate release
Sean Flynn is the Associate Director of the American University Washington College of Law Program on Information Justice and Intellectual Property
202-294-5749
A new leak of text from the Trans-Pacific Partnership Agreement contains new language — not included in any other trade agreement – clarifying application of trade law disciplines on drug pricing programs in the U.S.
Two previous agreements — with Korea and with Australia — contained restrictions on drug pricing programs, but were often thought not apply to any U.S. program. The texts of those agreements left any U.S. application ambiguous. But new language in the TPP leak makes clear the application of disciplines to “The Centers for Medicare & Medicaid Services (CMS), with respect to CMS’s role in making Medicare national coverage determinations.”
The new language would not require any immediate change in US law. But it would bind the U.S. to not change its law to be inconsistent with the agreement. This may limit options, for example, for Medicare drug price negotiation proposals. It would also directly apply to current Medicare Part B hospital reimbursements.
The primary requirement in the proposal is to provide an appeal to pharmaceutical companies over listing decisions. It does not have the same language as the Korea agreement requiring appeals on the prices set through reimbursement. It is not clear from the text whether the TPP language would override the stricter language in the Korea agreement if Korea joined the TPP.
