Twelve Pacific Rim countries are poised to enter a trade pact representing 40% of the world’s economy.

In a trade deal led by the United States, the Trans-Pacific Partnership (TPP) has two points in it that could lead to an increase in the prices of medicine worldwide. One of the countries to be most affected by this deal is the Indian drug industry, one worth over US$15 billion and a major supplier of affordable generics to the world.

Leaders of this huge market have already joined forces with the public health activists throughout the world in voicing their dissatisfaction with the new deal, pointing out that it would only delay the arrival of new cheap drugs.

D.G. Shah, secretary general of an industry group representing some of India’s top drug makers, said that the impact will be most noticable from the end of 2017. This was especially dangerous because India, considered by many to be the “pharmacy of the world”, is one of the world’s largest providers of pharmaceutical products, with countries from the U.S .to Africa relying on it as a supplier.

There were many comments by prominent figures that suggested that the deal favored big pharmaceuticals. Hilary Clinton, U.S. presidential candidate and former Secretary of State, said cautiously that the deal seemed to put the interests of big U.S. drug companies ahead of patients.

 

More Than Just About Trade

Jagdish Bhagwati, a professor of economics and law from Columbia University and one of the world’s leading international trade experts, said that the deal was part of a trend to include trade-unrelated features on labor and intellectual property into trade deals, at the behest of U.S. lobbies.

“TPP is a model of such behavior and deplorable architecture,” he denounced.

The deal, which is a central tenet of U.S. President Barack Obama’s “pivot to Asia”, is pending ratification by its 12 member countries as well as approval by the U.S. Congress.

According to details leaked by Wikileaks (the formal release of the text has yet to happen), the deal seeks to extend patent life, which now stands at 20 years, and abolish rules that allowed generic companies to undertake in the product development during the life of the patent.

The estimated impact is still being studied by Indian drug makers. But industry executives have already commented that the deal, which shields new drug data from competitors, would only hurt business in all nations which are party to the TPP.

 

Cheaper Drugs at a Disadvantage

Something also worth mentioning is the data exclusivity period for biologic drugs that the TPP would grant. Data exclusivity is stronger than a patent because it not only determines the length of time clinical trials data belonged to brand-name manufacturers, but also the length of time that other products cannot be approved using data by an innovator company.

The TPP would provide companies in member nations data exclusivity rights for drugs for up to eight years.

This clause would effectively delay the launch of cheaper forms, or biosimilars, of such drugs by other companies since some TPP countries are not under similar protections.

The activists against this movement are in fear of that such provisions could become a global norm. However, there were also others who believed that it was too early to really tell what sort of impact TPP would have on the drug industries of the world.

Amitabh Kant, secretary of India’s Department for Industrial Policy and Promotion, said that because TPP is a long-term process involving negotiations with many parties and that there was no accurate forecast available on what could happen. He also added that India was keen to become a global pharmaceutical manufacturing center.

About Ashoke Gupta

Ashoke is an expert in international trade and has worked in over 10 countries during his life, from Panama to Japan. He currently lives in his hometown of Mumbai and is an expert on West Asian markets.
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