Vermont Gov Slams US Trade Talks On Medicines

Ed Silverman, Pharmalot Adding his voice to a growing chorus of criticism over US trade policy on pharmaceuticals, Vermont Governor Peter Shumlin has written a stern letter to US President Barack Obama to complain that recent efforts by the US Trade Representative to negotiate various trade agreements could threaten healthcare programs serving vulnerable populations in the US. Specifically, he cites negotiations for the Trans Pacific Partnership Agreement, or TPP, which is a free trade agreement that aims to integrate the economies of the Asia-Pacific region. The talks have included proposals based on an earlier trade agreement with South Korea that he and others fear could restrict pricing procedures used by federal and state programs in the US, such as Medicare. How so? US agencies and state governments negotiate drug prices in similar ways as foreign governments and pay similar prices. For instance, most state Medicaid programs use open formularies known as Preferred Drug Lists, which are similar to programs in other countries that the US Trade Rep and the pharmaceutical industry argue are, essentially, an unwanted form of price control. Since trade agreements are reciprocal, though, Shumlin frets that any deal that restricts the use of such pricing mechanisms in other countries will then be imposed in the US. This could also affect Medicaid and the 340B program, which provides access to meds at reduced prices to more than 14,000 health care facilities, including hospitals, serving more than 10 million people. Shumlin notes that the PhRMA trade group has circulated materials seeking to have the TPP based on the provisions found in the the South Korea Free Trade Agreement. This includes a footnote that classifies Medicaid as a regional government program, which means it would be exempt from provisions, but he argues “there is no guarantee” the TPP agreements would contain the same exception. But even if an exception for Medicaid was included, “state leaders believe it is inappropriate for US trade policy to advance restrictions on pharmaceutical pricing programs that US programs do not meet but for technical carve outs,” Shumlin, a Democrat, writes to Obama (read the letter). “Inclusion of disciplines on pharmaceutical pricing and reimbursement programs in the TPP could allow our trading partners to challenge cost controls used by 340B, Medicare Part B and Medicaid. These programs serve vulnerable populations in the US, and trade policy should not put them at risk. Neither the TPP nor any future trade agreement should restrict these programs’ ability to set discounts or negotiate reimbursements.” One academic who has been active in the effort to prevent the US Trade Rep from imposing restrictions believes the tactic to create an exception is disingenous and would, ultimately, raise prescription drug prices for a large swath of Americans. “The TPP negotiation appears to be the first in which the US is poised to push the kind of disciplines on pharmaceutical pricing programs found in the Australia and Korea free trade agreements into a multi-country agreement including developed and developing countries. The letter from Vermont’s governor highlights the inherent hypocrisy in the US position to date: pharmaceutical pricing programs at the state and federal level in the U.S. do not comply with the substance of the norms that the US is seeking to impose on others,” Sean Flynn, associate director of the Program on Information Justice and Intellectual Property at the Washington College of Law, writes us. “Instead, it is attempting to get other countries to embrace exceptions for US programs - by exempting Medicaid explicitly and by only covering “reimbursement,” instead of the procurement conducted by large and effective programs in the Veterans Hospitals, DoD and GSA. The letter explains why many state governments are not satisfied with this approach but rather fear it will ultimately be used to restrict the efficacy of programs in the US that ensure that government here pay roughly the same prices for drugs as governments abroad.” Read original post here.