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Obama trade bill would boost biotech patents, leak suggests

July 1, 2015, 2:34 PM UTC
Illustration by Jesse Lenz for Fortune

President Obama is fresh off a major political victory that gave him so-called “fast track” authority to pursue trade bills, including the proposed Trans-Pacific Partnership, a massive multi-country agreement. Now, as the question turns to what’s in the TPP deal, a leaked document provides a pretty good preview.

According to Politico, which received a draft of the deal, the U.S. wish list includes new patent protections for the pharma industry, and especially for biologic drugs. These represent a promising (and lucrative) new field of medicine that rely on genetically-engineered proteins to target ailments like rheumatism or Crohn’s disease.

But these biotech drugs are expensive to test and develop, which has led the pharma industry to demand expanded patent protections – including new measures to restrict how the drugs can be copied or exported to other countries. In particular, as Politico notes, the TPP could put new limits on generic versions of the drugs at home and abroad (my emphasis):

The draft text includes provisions that could make it extremely tough for generics to challenge brand-name pharmaceuticals abroad. Those provisions could also help block copycats from selling cheaper versions of the expensive cutting-edge drugs known as “biologics” inside the U.S., restricting treatment for American patients while jacking up Medicare and Medicaid costs for American taxpayers […]

Some of the most contentious provisions involve “patent linkage,” which would prevent regulators in TPP nations from approving generic drugs whenever there are any unresolved patent issues. The TPP draft would make this linkage mandatory, which could help drug companies fend off generics just by claiming an infringement.

Such attempts by the U.S. and the pharma industry to ratchet up patent protection are hardly new, of course, and have long been controversial . Critics say stronger patent measures can exceed what is necessary to promote innovation, and that the resulting monopoly costs can burden the U.S. medical system while punishing poorer nations. U.S. biotech companies, meanwhile, suggest it’s not viable viable for the rest of the world to freely reap the fruits of their research.

Richard Gold, a law professor at McGill University who studies patents and trade agreements, observes that deals like TPP can lead to countries acceding to unwise intellectual property bargains.

“Trade agreements have been one of the most effective tools through which the pharmaceutical industry has disseminated its desired IP goals to the extent of having many developing countries adopt rules that run counter to their economic and social interests,” Gold said via email.

“Our own work confirms this: that some IP is good, but that the brand name pharmaceutical demands, as represented in the leaked TPP draft, go far, far beyond this. What the evidence strongly suggests is that the level of IP proposed will not only hinder access to medicines but actually slow down the ability of these countries to innovate both in the pharmaceutical industry and more generally.”

Gold cautions, however, that the final version of the TPP will likely be very different from the draft that emerged this week, and that it’s far too soon to judge the deal as a whole.

When (and if) the U.S. and other TPP countries, which include Australia and Vietnam, reach a final proposal, the U.S. Congress must still ratify it before it can go into effect.

You can learn more about the deal through this recent Vox explainer: