Intended for healthcare professionals

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News

US trade agreement threatens to increase drug prices and withhold safety data

BMJ 2013; 347 doi: https://doi.org/10.1136/bmj.f6908 (Published 15 November 2013) Cite this as: BMJ 2013;347:f6908

Rapid Response:

Re: US trade agreement threatens to increase drug prices and withhold safety data

The intellectual property chapter of the US-promoted Trans-Pacific Partnership Agreement (TPPA) recently released by Wikileaks is the tip of the iceburg. Other sections on investment, pharmaceutical pricing and dispute settlement, available only in leaked versions from secretive TPPA negotiations, are worse.

The TPPA grants extraordinary power to outside investors. Investment is defined extremely broadly, going well beyond real property and, absurdly, including expectation of gain or profit, or assumption of risk. Government actions that could conceivably reduce the value of an investment or even the expectation of profits could be considered as "expropriation.” This might include allowing a competing product, such as a generic version of a drug, to enter the market. National decisions to modify intellectual property laws or to exercise flexibilities available to them under World Trade Organization's TRIPS agreement could be interpreted as actions that interfere with investors’ reasonable expectations of profits, and in these situations TPPA proposals allow investors to sue for compensation (although an exception is made in the case of issuance of a compulsory licence for generic drug production).

Restrictions on national policy for pricing and reimbursement of pharmaceuticals contained in a leaked TPPA annex would limit a country’s policy options for containing the cost of medicines, and may interfere with a country’s ability to rely on international reference prices as a benchmark to determine reasonable reimbursement rates.

Disputes arising in these situations would be handled through an Investor-State Dispute Settlement ISDS) procedure. This remarkable provision means that investor-country disputes and settlements could be decided completely outside of the country’s judicial process, a significant infringement of national sovereignty.

Because national health authorities often do not participate in secretive TPPA negotiations, many countries will recognize the threat to their people's health only after the damage is done.

William Aldis
aldisw@post.harvard.edu

Competing interests: No competing interests

16 November 2013
William Aldis
Asst. Prof.
School of Global Studies, Thammasat University
Klong Luang, Pathumthani 12121, Thailand