Revamped NAFTA Deal Criticized for Drug Price Provisions

The recently updated North American Free Trade Agreement, now known as the U.S.-Mexico-Canada Agreement (USMCA), includes a 10-year exclusivity period for biologics. While the policy is designed to protect drug manufacturers that invest in research and development, critics worry that the measure will have a harmful effect on the development of biosimilars and could lead to higher drug prices.

Under the agreement, generic drug manufacturers would be unable to produce biosimilars – which often provide cheaper alternatives to biologic agents – during the 10-year exclusivity period. Although USMCA sets a timeframe lower than the 12-year period mandated by U.S. law, advocates and generic manufacturers argue that the deal will make it difficult to reduce the exclusivity period in the future, potentially impeding the government’s ability to lower drug costs by encouraging the development of biosimilars.

“The revised rules would further strain health-care budgets, contribute to people’s suffering and family financial hardship, and most likely cost people their lives,” said Peter Maybarduk, from the consumer advocacy group Public Citizen, in a statement. “Their purpose is to better insulate expensive new medicines from generic competition, helping pharmaceutical corporations keep the prices of at least some new medicines higher for longer.”

USMCA also creates marketing exclusivity periods for new uses and new forms of existing medicines, as well as new combinations of older medicines. Under the agreement, patents also could be granted for new uses and methods for an existing drug.

While the three nations have committed to the agreement, formal ratification and implementation are pending.

Source: STAT News, October 1, 2018.