Lost amid all the hue and cry over the mustache-twirling villains who are conspiring to devastate American workers by negotiating a secret trade partnership with Pacific Rim nations are the legitimate concerns of non-governmental organizations (NGOs) like Doctors Without Borders, who say that the trade deal will cost lives. The deal, they say, will make it more difficult for poor nations to produce or obtain affordable medicines by extending the restrictions on making generic versions of the drugs available, and undermine the ability of governments to set price controls.
The stakes involved in issues like this could not be higher, given that the Trade Promotion Authority that President Obama seeks would make it possible for the final deal to pass Congress without a single Democratic vote. Well, it would still need one democratic vote, that of President Obama, who says he needs TPA to negotiate the most favorable deal possible.
When asked about the generic drug issue, his White House referred The Daily Banter to the Office of the U.S. Trade Representative, which says that the TPP does the opposite of what NGOs say it does, and actually expands access to medicines in poor countries by taking into account the various countries’ level of development. In 2014, USTR Michael Froman addressed the issue in a speech at the Center for American Progress:
“Here we are working to find better ways to foster affordable access to medicines, support freedom of information and encourage the free flow of ideas across the digital world.
“To offer some examples: We are asking our TPP partners to accept WTO agreement provisions allowing for the export of generic versions of patented drugs to countries with insufficient manufacturing capacity.
“In the TPP, we are proposing a “differentiated approach” for pharmaceutical IP protections which takes into account countries’ individual levels of development and other challenges to ensure that the benefits of innovation are shared with the world’s poor.
In the same speech, Froman pointed out that the TPP advisory committees include “representatives of every major labor union; public health groups…, development NGOs,” and “Generic drug companies and ISP representatives.”
Administration officials also pointed out that developed TPP nations that use price controls retain their ability to negotiate lower drug prices, and to require pharmaceutical companies to prove the efficacy of new medicines. The higher prices that Americans pay are subsidizing cheaper drugs for countries that can afford to pay more, and TPP, they say, protects poor countries like Vietnam, at least until their development catches up. Critics of TPP also don’t account for the provisions of the deal that will result in less desperate and impoverished populations.
One other selling point for TPP is the idea that the extra money pharmaceutical companies can make on new medicines will spur innovation, a claim that critics dismiss by pointing out how little pharmaceutical companies currently spend on research:
Of course, pharmaceutical companies claim they need to charge high prices to fund their research and development. This just isn’t so. For one thing, drug companies spend more on marketing and advertising than on new ideas. Overly restrictive intellectual property rights actually slow new discoveries, by making it more difficult for scientists to build on the research of others and by choking off the exchange of ideas that is critical to innovation. As it is, most of the important innovations come out of our universities and research centers, like the National Institutes of Health, funded by government and foundations.
Proponents of TPP probably are overstating the wave of innovation that extra profits will spur, and the amount of money drug companies spend (and the ways they spend it) are sickening, but even given the small piece of the pie they spend on research should, it stands to reason, become a larger small piece of the pie under TPP. The benefits of TPP, if they pan out, should also result in a U.S. economy that can better afford to fund all kinds of medical research.
On the other hand, as well-intentioned as the Obama administration may be, there is reason to be skeptical of their win-win approach. In negotiating the Affordable Care Act, the administration cut pharmaceutical companies a sweetheart of a deal, and in similarly opaque fashion. That trade-off has worked out pretty well, or at least better than the previous status quo, but that experience, as well as previous trade deals, have taught people to be wary of big promises.
What’s encouraging is that the administration is clearly receptive to these concerns, and making an effort to address them. In recent Senate testimony, for example, Froman said that the U.S. has “tabled” its demand for a 12-year protection on biologics, and the sources I spoke to were well-versed in the concerns of NGOs. They are listening, and acting on those concerns.
Meanwhile, opponents of the deal have consistently ignored the administration’s efforts to address these concerns, and others, focusing instead on the process by which it is being negotiated. That process, including the flexibility that President Obama seeks, is remarkably similar to that of the Iran nuclear deal, of which progressives have been overwhelmingly supportive.
Just as Republicans (and some Democrats) argued that they needed to be able to obstruct the deal in the guise of improving it, TPP’s Democratic opponents similarly oppose TPA because they want to reserve the right to block a deal, any deal. I understand the impulse, because that Republican-controlled Congress is scary as hell, but as President Obama pointed out last week, surely he’s earned some trust from progressives.
If not trust, though, he’s at least earned an honest discussion about the merits of the Trans-Pacific Partnership.