Criticism Dogs Launch of Trade Agreement

June 17, 2020
Deana Ferreri, PhD

The United States–Mexico–Canada Agreement came to a rocky impasse over drug exclusivity protections, and July 1 is the day this agreement takes effect.

In just 2 weeks, the final version of the trade agreement known as the United States—Mexico–Canada Agreement (USMCA) goes into effect.

Although it has been amended to remove provisions researchers argued would limit patient access to generics and biosimilars in the 3 countries, this update to the North American Free Trade Agreement (NAFTA) is dogged by criticism that it fails to improve patient access to vital and affordable drugs.

The new agreement significantly strengthens labor rights in Mexico, opens the Canadian dairy market to US dairy farmers, and increases the amount of North American—sourced parts required in cars manufactured in the 3 countries, but it will not improve access to generics and biosimilars, according to Tolulope Anthony Adekoa, PhD, whose after-analysis of the agreement was published recently in Globalization and Health.

NAFTA has governed trade between Canada, the United States, and Mexico since 1994. As a candidate for president, Donald Trump was sharply critical of NAFTA and vowed to negotiate a new agreement if elected. Negotiations between the 3 countries wrapped up late in 2019, and the agreement is scheduled to take effect on July 1.

Mixed Reviews of Revised Pact

The final version has engendered mixed reviews. Prior to the removal of intellectual property provisions that would have dramatically curtailed access to biosimilars and generics in Mexico and Canada, the Association for Accessible Medicines was opposed to enactment of the USMCA.

“The revised text creates greater opportunities for patients in Mexico, Canada, and the United States to access less-expensive medicines and promotes a competitive pharmaceutical market across the 3 countries,” the group wrote in its final analysis.

BIO, a pharmaceutical industry group, contended the removal of product exclusivity extensions left American innovator companies exposed to intellectual property theft. “By removing enhanced IP protections for biologic medicines, [Trump’s] administration just surrendered one of the most important tools that would help stop it,” BIO President and CEO Jim Greenwood said in a statement.

In May 2019, prior to ratification of the USMCA, an extensive critique in Globalization and Health discussed in detail the chapters of the agreement with implications on public health. Regarding pharmaceutical prices and access, the authors concluded that the draft agreement would have expanded “intellectual property rights and regulatory constraints that will lead to increased drug costs, particularly in Canada and Mexico.”

Two provisions of concern to the authors regarding intellectual property were removed in the final version of the agreement. One would have allowed patents for “new uses” of a known product, which the authors predicted would facilitate “evergreening” of pharmaceutical patents. The second provision would have imposed 10-year market exclusivity for biologics, which the authors noted would have been “the longest period of market protection for such drugs negotiated in a trade agreement to date.”

The latter draft provision would have extended market exclusivity in Canada from the current 8 years, while in the United States it would have undermined legislation in Congress to shorten the 12 years of market exclusivity biologics have now to 7 years. In Mexico, which does not grant exclusivity for biologics, such product protections would have significantly altered the patient access landscape.

Lingering Concerns

In a letter published on June 5, Adekola, a research assistant specializing in intellectual property law at the School of Law at City University of Hong Kong, revisited the Globalization and Health review in light of the final version of the USMCA . According to Adekola, the authors’ concerns regarding the effect of the USMCA on public health remain valid despite the removal of the 2 provisions. The final agreement, Adekola argued, “has done little to enhance access to generic medicines and biosimilars” and “has done little to enhance public health.”

Indeed, several other provisions the authors argued would “serve to delay the market entry of less-expensive generic and biosimilar medicines” remain in the final trade agreement, These include a provision allowing for extension of a patent term for “unreasonable” delays in the market approval process, protection of undisclosed data from regulatory submissions, and a provision linking a drug’s patent status to its marketing approval process, which the authors of the review claimed could delay the market entry of a generic “while disputes over possible patent infringement are resolved.”

In addition to intellectual property, the authors warned that provisions elsewhere in the agreement “may lower standards for assessing drug safety and efficacy, increase pressure to speed up regulatory processes (with concomitant safety risks), and place constraints on the public release of information about pharmaceutical inspections.”

Adekola echoed these concerns from the 2019 review and concluded that, although 2 of the problematic provisions have been deleted, the final trade agreement perpetuates a problematic status quo by failing to “ameliorate the existing effect of intellectual property protection on access to generic medicines and biosimilars.”