President Donald Trump has continually railed against global “freeloading” for pharmaceuticals, but his administration's latest move won’t win any praise from drugmakers on that front.
In trade negotiations with Canada and Mexico, the Trump administration agreed to scrap biologics exclusivity provisions, allowing each country to set its own rules. And that, in turn, could open some big-selling brands up to earlier-than-expected biosimilar rivals, at least outside the U.S.
Democrats celebrated the move as a win. In past trade deals, the U.S. has pushed hard to apply its own exclusivity rules to its trading partners. But drugmakers, predictably, castigated the decision.
As it stands, the U.S. provides 12 years of exclusivity for biologics. The new USMCA trade pact was set to provide 10 years of protections across all three markets, but this week the administration backed away from that requirement.
The decision means each country can regulate biologics exclusivity individually, which has drugmakers worried not only about Mexico and Canada, but about the precedent it sets for other trade pacts.
The move doesn’t come as a complete surprise, as the Wall Street Journal reported last week that the administration was considering reducing biologics exclusivity provisions to win Democratic support for the trade deal.
Still, pharma groups aren't happy. BIO president Jim Greenwood said in a statement the decision “declares open season” on innovative pharma companies and “sends a clear message that the U.S. government will stand idly by while foreign entities attack American intellectual property, American jobs and America’s global leadership in medical innovation.”
PhRMA head Stephen Ubl said the move puts “politics over patients,” as it doesn’t help U.S. patients afford their drugs.
“The only winners today are foreign governments who want to steal American intellectual property and free ride on America’s global leadership in biopharmaceutical research and development,” Ubl added.
On the flip side, Association for Accessible Medicines CEO Chip Davis said the agreement allows for “greater opportunities for patients … to access less expensive medicines and promotes a competitive pharmaceutical market across the three countries.”
The Trump administration has rolled out numerous proposals to fight high U.S. drug prices, and according to Axios, the president wasn't interested in fighting for anything that could lead to higher prices. At the same time, he's routinely blasted "freeloading" by foreign governments of American pharmaceutical innovation and has pushed to secure prices in the U.S. that are closer to prices elsewhere.