NAFTA 2.0 Provisions Would Harm Efforts to Promote Competition and Lower Drug Costs

February 15, 2019

 

President Trump's proposed replacement for the North American Free Trade Agreement (NAFTA) would give drug companies ten years' protection from cheaper competition for biologic drugs, a step that would harm efforts to promote drug competition and lower drug prices.

 

Last year, the United States, Canada, and Mexico signed a free trade agreement to replace NAFTA, but the agreement does not go into effect until all three legislatures approve it. The pact gives drug companies a ten year exclusive period for biologic drugs, which are ultra-expensive drugs made from living cells. This means that after a drug manufacturer develops a biologic medicine, the medicine's patent would be exclusive to that company for ten years, and only when those ten years are up could generic drugs be made.

 

These provisions are a bad idea, and will allow drug companies to exploit their monopolies to charge incredibly high prices for biologic drugs. Members of Congress have pushed back against the provisions. Representative Rose DeLauro called it "an outrageous giveaway to Big Pharma." Representative Earl Blumenauer, the new chairman of the House Ways and Means Subcommittee on Trade, said that it would not pass out of his committee with the biologics provision intact.

 

Drug prices are rising rapidly, and many Americans already struggle to afford the medicines they need. Biologic drugs have immense promise-they could cure deadly diseases and lead to massive breakthroughs-but they are also very expensive, in large part due to efforts to stifle competition. As we have previously said, drugs don't work if people cannot afford them.

 

Congress should vote to remove these provisions from the renegotiated trade agreement. These long exclusive periods would raise drug prices and lock America into a higher level of monopoly protection for drugs that already have substantial protection. We urge all members of Congress to vote against NAFTA 2.0 unless these exclusive periods are removed from the treaty.

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