Chip Davis of the Association for Accessible Medicines argues for greater provision for access to affordable medicines – including biosimilars – within the trade agreements that the USA is currently negotiating with its neighbours.
An American president determined to seal a trade deal. A newly elected Democratic majority with an agenda of its own. A nation hungry for bipartisanship. Sound familiar? Back in 2007, congressional Democrats pushed President George W. Bush to reopen and renegotiate key provisions of the Colombia, Panama, Peru and South Korean trade agreements in what became known as the May 10 Agreement. This landmark of bipartisan negotiation enshrined worker protections, collective bargaining and access to affordable medicines. A similar opportunity awaits us today with the US-Mexico-Canada Agreement (USMCA), which is set to replace the North American Free Trade Agreement (NAFTA) and, as in 2007, Democrats seem unlikely to approve USMCA unless real changes are enacted.
As Congress required when setting forth the renegotiating priorities for NAFTA, USMCA and other trade agreements should focus on access to affordable medicines. The US Trade Representative and Congress should ensure that treaty provisions advance rather than thwart patient access to FDA-approved biosimilars that provide much-needed competition to expensive biologic medicines. This is a crucial moment for policymakers to understand both the state of biosimilars today and the potential of a robust biosimilars market. Unlike Europe, where more than 50 biosimilars are available to patients, the US has only 18 approved and 7 on the market. Observers point to “patent thickets”, such as the strategy employed by AbbVie for keeping alternatives to Humira, the top-selling drug in the world, from reaching patients. The company holds about 136 patents for this biologic, and the first biosimilar isn’t due to hit the US market until 2023, two decades after Humira’s introduction. Patients in Europe, on the other hand, have access to a biosimilar of Humira now.
Provisions in trade agreements that facilitate this type of over-patenting can have a lasting impact for patients and the generic and biosimilar industry. Trade policies matter a great deal for the pharmaceutical industry, which is especially dependent on patent protection. All of the parties at the global negotiating table can benefit from the spread of technological innovations and agreements must provide some protection for innovation and the patents that encourage years of research.
But there are other considerations that also must come into play. One is access to affordable medicines through the encouragement of pharmaceutical competition. For many of the most expensive drugs—biologics—that competition comes from biosimilars.
Legislators don’t need a PhD in pharmacology to recognize the promise of biosimilars. Biosimilars are already averaging 47 percent discounts off of their brand counterparts list prices, and Avalere Health estimates that 1.2 million US patients could gain access to biologics by 2025. A study by RAND notes, “The pervasive uncertainty in the US biosimilar market — including questions as to whether the market will be sustainable and lead to cost savings, as intended — presents two choices for policymakers.” One option is to let the market continue to develop under current policies, which will “eventually” lead to benefits for the health care system. The other option, which I believe is sounder and more responsible, would be to help, in RAND’s words “steer the US biosimilar market more quickly to a sustainable, competitive state.”
Signing the USMCA as-is would limit Congress’s ability to address biologics pricing concerns, a market that—if unchecked by competition—will cost taxpayers and the health care system USD 379 billion by 2023, according to IQVIA. If unchanged, the agreement would be tantamount to exporting our broken drug pricing system and missing out on opportunities to stand up a market that could make all the difference for patients with cancer and other diseases. The health of current and future patients depends on achieving the right balance, and that is why Congress needs to take the step of re-evaluating the non-competitive provisions currently in USMCA.
A letter signed by more than 70 organizations, including the AFL-CIO, Consumer Reports, Families USA, National Education Association and Social Security Works, emphasized the consequences for drug prices:
Expansive patent and marketing exclusivity rules are some of the major factors that have resulted in US consumers and the US government routinely paying more for prescription drugs than people and governments in other countries throughout the world. Locking the United States into the policies that have led to high medicine prices here will not remedy our problem, nor will trying to impose these US policies on Mexico and Canada through NAFTA 2.0. The negative impact on access to medicines through the expansion of monopoly powers and limits on competition would be felt for years to come and would not be limited to the 490 million people living in the US, Mexico and Canada. It would be a dangerous blueprint for future agreements.
These warnings apply to USMCA—which is not yet a done deal—as well as future trade agreements. We do not want to get locked into a policy climate that makes patient access to affordable medicines unsustainable.
As CEO of the association representing the interests of biosimilars manufacturers, I hear from many corporate leaders who say that the current climate of uncertainty is causing them to wonder whether USD 100-300 million in R&D expenses, the cost of bringing a biosimilar to the market, constitutes a smart investment.
To encourage the development of biosimilars, trade agreements should:
- Eliminate additional exclusivity for brand name biologic drugs, which will delay patient access to more affordable biosimilars
- Ensure consistency with US law
- Provide an incentive for rapid development and market access for generic manufacturers, for example, the 180-day exclusivity provision in US law.
- Ensure a clear and robust regulatory review (“Bolar”) provision to allow access to generic and biosimilar medicines immediately upon expiration of brand-name drug patents and exclusivities.
- Enhance patent transparency by including a requirement to disclose the “best mode” for using pharmaceutical inventions.
- Enhance transparency through a public registry for all patents and exclusivities granted to a drug.
A NAFTA that balances incentives to innovate with much-needed provisions to enhance access to affordable medicines is the best hope for patients who need affordable medicines. The May 10 Agreement can be a template to satisfy all stakeholders. Congress has the ability to fix the USMCA before it harms our ability to lower prescription drug prices that affect all Americans. Failing to get this trade agreement right could jeopardize both immediate economic gains as well as the public health benefits associated with widespread pharmaceutical competition. We hope that Congress and the Administration will work together to fix USMCA before it makes our drug pricing problems even worse.