The TPP, big Pharma, and drug costs to poorer nations

September 23rd, 2015 at 1:15 pm

My CBPP colleague Bryann DaSilva (not a typo–just a bit of ‘n’ inflation at the end of his first name) makes a smart connection I missed between some of my recent scribblings.

In the TPP debate I had with USTR Mike Froman in the journal Democracy, I point out concerns regarding extended patents on pharmaceuticals, due in no small part to the agenda of those corporate interests at the negotiating table. As I stressed, I suspect Froman is closer to me on these concerns–which loom particularly large, btw, for the less advanced economies in the deal. Such protectionism jacks up prices and that surely hurts them even more than us. But here the key political economy point (bold added):

Progressives are understandably concerned [about extended patent rules in the trade deal]. Economist Dean Baker concludes, “While [TPP] provisions are likely to lead to higher drug prices in the United States, they will have their greatest impact in the developing world.” Rohit Malpani, director of policy for Doctors Without Borders, has voiced a related critique: “There’s very little distance between what Pharma wants and what the U.S. is demanding.” That may be changing; I suspect that Froman personally is more sympathetic to costs in developing countries than he is to the Pharma lobby. But we do not know, and we should not assume, that the USTR has more clout than Big Pharma in a deal that is likely to require Republican support.”

Bryann noted the connection between this problem–a critical good that I argue has important public good characteristics–and the solutions both Dean Baker and I discuss in this Room for Debate forum in today’s NYT. I argue that while incremental steps, like requiring a certain amount of profits are reinvested in research, might help realign incentives to boost social benefits over individual profits, the fact is that health care is in many ways a public good. And that probably means we can’t solve this problem with market solutions (more competition) or quasi market solutions, like privately held patents of the type Pharma appears to want to enshrine in the TPP.

I suspect that at the end of the day it will take more rigorous cost controls and moving drug patents into the public domain. I offer some ideas on how to do that without hurting innovation in my NYT piece.

And yes, that appears to be the opposite direction of where the TPP is headed on this issue.

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6 comments in reply to "The TPP, big Pharma, and drug costs to poorer nations"

  1. Aggie L says:

    From what I’ve learned about TPP and TTIP due to the fortunate Wikileaks trove, the list of beneficiaries if this passes is:

    1. multinational corporations
    2. multinational corporations
    3. multinational corporations

    Why oh why do only 5 of the 29 Chapters of TPP have to do with trade?

    And how can our Congress vote to abdicate its role in democratic process by passing TPA?? Any TREATY, and TPP is one, must have 2/3 support in Congress, or has that gone out of fashion?

    I’ve been ranting about this issue for months, and only lately has it gained attention. I hope to God it fails. Free Trade does not equal Fair Trade, and the citizens of all countries are the losers here.


  2. Amateur says:

    There are just too few politicians willing to suggest bold moves in favor of the public good.

    What happens when our politicians act this way? All of the bold moves are made by the bad people. We let problems fester for so long in dysfunction that everyone is ready for change, but if the good side isn’t willing to suggest bold answers, the bad side wins.

    The example is the rise of Trump. People want bold solutions so much that they’re willing to accept the worst of ideas as long as they’re bold.


    • Smith says:

      The counter example is the rise of Sanders.


      • Amateur says:

        True. I like everything Sanders proposes. Everything.

        Just in the same way Trump is being attacked by many other Republicans, Sanders is now being attacked by one of Clinton’s super PACs. We knew this would happen.

        So strange it is that a person like Perry would bow out of the race and declare himself against deporting illegals. Why didn’t he say this a long time ago?

        There is certainly a political path to victory by attacking Sanders, and he’s an easy target because the public perception of socialism is not good in the US regardless of how misunderstood the term is. So he has an uphill battle. The ideas people like. The false perception advocated by people of his own party are likely to be effective.

        What if the goal wasn’t to achieve a person victory but rather a societal victory? What if politicians didn’t attack those they agree with for political gain? What if Biden is right, that essentially a person has no business running for office if they can’t say what they mean?

        If politicians are truly against money in politics, why don’t they show it? Why to they continue to craft their strategies to appeal to the money?

        Crafty politicians have ruined our political system.


  3. yastreblyansky says:

    I don’t understand why everybody in America assumes that some obnoxious provision on drug pricing will inescapably be part of the agreement, when all 11 other countries are adamantly opposed to it, as the WikiLeaked documentation showed. I don’t think there will be an agreement until the US gives up on this–it’s part of what crashed the last round of negotiations in Hawaii, right?


  4. Tammy says:

    I no longer subscribe to the New York Times in digital format because the Times is included in my tuition fee at Penn State Erie. Thus I was happy to read Paul Krugman’s op-ed piece titled, “Dewey, Cheatem and Howe.”

    I hope everyone has a good weekend.


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