THE BLOG

TPP, Fast Track, Will Drive Consumers to China for Affordable Medicines

05/09/2015 02:56 pm ET | Updated May 09, 2016

Contrary to the Obama Administration's claims, the Trans Pacific Partnership (TPP) could boost China's standing as a global leader in the development, production and sale of affordable generic drugs.

The Administration claims that the TPP is imperative in the race for "U.S.-style" economic and political world dominance, triumphing over China as a threatening competitor, and is pushing Congress hard to pass a "Fast-Track" bill now to grease the skids for approval down the road of the 12-nation TPP.

But when it comes to prescription drugs, the free trade mantra that trade agreements produce competition, which results in more affordable access to products for consumers worldwide, really falls apart.

In the case of the TPP, as in with previous trade agreements, intellectual property and other trade rules give brand name pharmaceutical companies, "Big Pharma," global monopoly rights to produce prescription drugs for years, locking out potentially competing generic companies from producing affordable drugs. Prescription drugs, already unaffordable for many, would be increasingly expensive for consumers in the U.S. and worldwide under the TPP. Enter China.

In 2012, China amended its patent law through the "Measures for Compulsory Licensing to Patent Implementation." "The amended Chinese patent law allows Beijing to issue compulsory licenses to eligible companies to produce generic versions of patented drugs during state emergencies, or unusual circumstances, or in the interests of the public." Officials estimated that expiring patents for 631 drugs would give China an opportunity to develop its generic drug industry, the market value of which is predicted to rise to nearly $82 billion (500 billion yuan).

China has worked with Brazil and India to negotiate better terms between patent protection and public health. China was one of the first countries to accept the Doha Declaration amending the TRIPS agreement to increase access to generic drugs in the interest of public health. Under the 2012 Compulsory Licensing amendment, China can export drugs produced under compulsory license to other countries, including members of the World Trade Organization for "reasons of public health."

According to Bob Verbruggen, senior adviser for the UNAIDS Asia Pacific office, "China's action plan...[seems] to confirm that it intends to become a generic producer for the domestic and international market."

The TPP and other trade agreements create an economic race to the bottom, creating a nation of Walmart shoppers rather than family wage jobs and an economically and environmentally sustainable future. If this is the best that U.S.-style trade policy can do, the field will be open for competing models.