The following letter to the trade and health ministers of the NAFTA negotiating parties was signed by nearly 100 organizations concerned with health. A printable PDF of the letter, including a full list of endorsements, is available on the MSF Access to Medicines site.
Dear Ministers: As organizations concerned with health issues domestically and globally, we urge you to ensure that any renegotiation of the North American Free Trade Agreement (NAFTA) does not undermine access to affordable medicines.
We have heard troubling reports that the negotiating parties are considering changes to NAFTA’s intellectual property (IP) chapter that would further expand the monopoly protections of prescription drug corporations and thus thwart market competition from generic products that is often essential to bring down consumer prices. Similarly, we understand that the pharmaceutical industry is calling for the United States to demand so-called transparency rules that would restrict governments’ rights to control prices of medicines and set reimbursement and formulary policies. Finally, there are pressures from business lobbies to maintain investor-state dispute settlement, including with respect to IP-related investments, which undermines sovereign authority and allows unreviewable private arbitration claims by foreign investors against public interest laws and regulations. All of these measures would contribute directly to escalating consumer prices and worse access to treatment in Canada, Mexico and the United States.
Already, one in five people in the United States fail to fill prescriptions due to their cost. The impact on the U.S. economy of cost-related non-adherence to prescription drugs was estimated to be more than 100 billion dollars in 2012, due to complications that worsen health outcomes and require treatments that are more expensive than the medicines.[1] One in five Canadians also report that a member of their household cannot afford the medications being prescribed to them.[2] Millions of Canadians (between 10 and 20% of the population) are compensating by not filling their prescription at all or taking measures to make their prescription last longer, such as skipping doses and splitting pills.[3]
Already, Canadians pay some of the highest drug prices in the world and spending on pharmaceutical products is one of the three largest elements of overall health-care spending, year after year.[4] Meanwhile, in the absence of a national, universal pharmacare plan, available evidence indicates that a significant percentage of Canadians experience the cost of medication as a barrier to proper health care. Prescription drug expenses during the previous two years were the largest reported medical expense by a sample of people who had filed for bankruptcy (74.3) in Canada.[5] A renegotiated NAFTA must support, and not further complicate, the already challenging task of developing universal, equitable pharmacare coverage across the country.[6]
Generic competition has often proven the most effective means of reducing prices and ensuring prices continue to fall over time. In the U.S., generic medicines have saved more than $1.6 trillion in health care costs in the past decade.[7] Internationally, generics have played a critical role in responding to the AIDS epidemic, saving millions of lives and enabling people living with HIV to still realize their potential. U.S. residents recently ranked prescription drug prices as their top priority among salient issues before the U.S. Congress. Seventy-five percent favor shortening the length of monopoly granted on prescription drugs so that cheaper generic drugs are made available sooner.[8]
During the Trans-Pacific Partnership (TPP) negotiations, the U.S. Trade Representative insisted on expanding monopoly protections for pharmaceuticals. That choice was universally unpopular; criticized by observers from the Vatican to The Economist magazine and fiercely resisted by negotiators from other TPP countries, ultimately dragging out the TPP negotiation for years and contributing directly to its failure. In the TPP-11 negotiations underway now absent the United States, the remaining countries have excised many controversial intellectual property provisions that would have reduced access to medicines.
All three NAFTA countries have incorporated into their domestic laws World Trade Organization as well as NAFTA patent and data protection rules, which already heavily favor the patent-based corporations by requiring signatory nations to provide various monopoly protections that shield them from competition. In the years since NAFTA’s signing, corporations have radically increased medicine prices and have gamed existing intellectual property rules to maximize their profits. Any changes to NAFTA should rebalance the agreement’s terms in favor of competition and access to affordable healthcare, for instance by eliminating NAFTA’s intellectual property chapter altogether, meaning the NAFTA countries’ obligations would be those under the WTO TRIPS agreement, and eliminating investor-state dispute settlement from NAFTA. Certainly no new monopoly protections should be added, such as the biologics exclusivity terms that pharmaceutical firms seek or new “transparency” provisions affecting pharmaceutical price controls and reimbursement or formulary powers.
Whatever other goals the Canadian, Mexican and U.S. governments have for NAFTA’s renegotiations, it is critical to do no further harm with respect to the health and access to affordable medicines of North America’s approximately 500 million people. Thus, it is vital that the NAFTA party governments reject any provisions that would expand or strengthen pharmaceutical monopolies and enforcement at the expense of access to affordable medicines.
If a revised NAFTA is to include an IP chapter, it should not include NAFTA-plus standards affecting pharmaceuticals or medical technologies. It should avoid greater monopolies related to:
– Patentability standards and patent disclosure
– Data/market exclusivity (small molecules and biologics)
– Patent/registration linkage
– Mandatory patent term extensions
– Enforcement, including rules on damages, injunctions and border controls.
In addition, there should be no ISDS provision in any investment chapter, nor any transparency or other restrictions — including so-called “transparency measures” — on a country’s authority to regulate or negotiate drug prices or to list medicines in an approved formulary or for reimbursement.
This is not only a matter of the immediate impact of extending new NAFTA-plus rules and monopolies. Rather, locking in such policies in the context of NAFTA would greatly restrict the three countries’ policy space in the future to regulate drug prices and to revise domestic rules to serve domestic health interests and to rebalance IP rules as needed. As well, a renegotiated NAFTA might well become a template for other trade agreements, including with developing countries whose concerns about high drug prices are even more dire than the NAFTA parties.
Full letter with signatures [PDF]
Sources:
[1] IMS Institute for Healthcare Informatics, Avoidable costs in US healthcare (2013). Available at www.webcitation.org/6fatM9xnn
[2] Angus Reid Institute, Prescription drug access and affordability an issue for nearly a quarter of all Canadian households (2015). Available at http://angusreid.org/prescription-drugs-canada.
[3] Angus Reid Institute, Prescription drug access and affordability an issue for nearly a quarter of all Canadian households (2015). Available at http://angusreid.org/prescription-drugs-canada.
[4] Canadian Institute for Health Information, National Health Expenditure Trends, 1975 to 2015 (Ottawa: CIHI, 2015). Available at https://www.cihi.ca/en/national-health-expenditure-trends.
[5] Himmelstein DU, Woolhandler S, Sarra J, Guyatt G. Health issues and health care expenses in Canadian bankruptcies and insolvencies. International Journal of Health Services 2014;44:7-23.
[6] M. Dutt, Affordable Access to Medicines: A Prescription for Canada (Ottawa: Canadian Doctors for Medicare and Canadian Centre for Policy Alternatives, 2014). Available at www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2014/12/Affordabl
e_Access_to_Medicines.pdf.
[7] Association for Accessible Medicines, Generic drug access & savings in the U.S. (2017). Available at accessiblemeds.org/sites/default/files/2017-07/2017-AAM-Access-Savings-Report-2017-web2.pdf
[8] Lake Research Partners, Public support for prescription drug price reform (2016). Available at http://www.lakeresearch.com/images/share/LRP.PublicOpiniononPrescriptionDrugPricing.pdf
