THE BLOG
11/27/2013 12:44 pm ET Updated Jan 27, 2014

United Against the Secret Trade Agreement (TPP) That Blocks Affordable Health Care -- And Much More

Have you heard of the Trans-Pacific Partnership (TPP) Free Trade Agreement? If not, you're not alone -- the American people, by design, know very little about what U.S. negotiators are promising in closed-door talks with 11 Pacific-rim countries. What we do know comes through leaked texts, like the one leaked recently on intellectual property rights, which includes significant implications for generic medicines, drug price negotiation and other issues.

This trade agreement is essentially being negotiated by large corporations behind closed doors and -- surprise! -- does not hold much promise for retirees and the middle class. Instead it is being written to benefit large corporations at our expense. The U.S. Trade Representative (USTR) seems, in this case, to be acting as an ambassador for Big Pharma, engaging in talks about a sweeping new trade agreement that would undermine and rewrite current U.S. laws. Much of the agreement has absolutely nothing to do with so-called "free trade."

The leaked texts prove the TPP would limit the ability of states and the federal government to moderate escalating prescription drug, biologic drug and medical device costs in public programs. The agreement would revoke the U.S. government's ability to negotiate lower prices for prescription drugs through Medicaid and the Veterans Administration just like private insurers do. Instead of protecting American consumers, including seniors and veterans, the TPP would expand Big Pharma price-gouging. This is the opposite of what we should be doing, which is expanding prescription drug negotiation to Medicare beneficiaries.

The TPP would undermine current measures in place to control health care and prescription drug costs as well as new proposals to control costs. Moving toward a public option would be out of the question, and important Medicare cost savings measures under consideration by Congress would be null. The excellent proposal by Sen. Jay Rockefeller (D-WV) and Representative Henry Waxman (D-CA), the Medicare Drug Savings Act, would reduce our federal deficit by $141 billion over the next 10 years by allowing dual-eligibles -- individuals who are eligible for both Medicare and Medicaid -- to benefit from the Medicaid-negotiated prices for prescription drugs.

Further, the drug provisions promoted by the USTR would bind the U.S. to a 12-year market-exclusivity period, i.e. monopoly period, for drugs and even medical procedures. This contradicts budget proposals to save consumers and the United States government significant caches of money by reducing the market-exclusivity period of brand-name drugs. There is a reason for patent exclusivity periods, it is to encourage and reward research and innovation. However, half of new drugs approved in the U.S. from 1998 to 2007 resulted from research at universities and biotech firms, not big drug companies. And despite their claims, drug companies spend 19 times more on marketing than on research and development.

According to Heath Care for America Now, between 2002 and 2012, the eleven largest global drug companies made $711 billion in profits. Companies like Merck made $16 billion, much of it from federal contracts; paid half the official tax rate; and had $53.4 billion in profits offshore in 2012 on which it paid no U.S. taxes. Similarly, Pfizer received big federal contracts, received $2.2 billion in federal tax refunds from 2010-2012 and paid no U.S. income taxes on $73 billion of profits kept offshore last year alone.

Corporate America, including the drug industry, has never had it so good. Now they are trying to ensure record profiteering for the infinite future with this bogus trade deal. At our expense.
Over 178 members of Congress, both Republicans and Democrats, are urging USTR to adopt a more public negotiation process and opposing fast-tracking this legislation which ignores the right of Congress to legislate.

This is about Big Pharma and corporate profits at the expense of seniors and American consumers. If the TPP passes, Big Pharma and corporations win -- big.