More on Policy and Legislation

Trade deal takes away pharma's biologic exclusivity and promotes drug competition

Intellectual property protections are needed for the ongoing discovery of drug treatments, PhRMA says.

Susan Morse, Managing Editor

The trade deal announced yesterday between the United States, Mexico and Canada takes away pharmaceutical companies' 10-year exclusivity for biologics.

In addition, the United States-Mexico-Canada Agreement (USMCA) undos three additional years of patent protection when drug companies submit paperwork about a new use of a drug.

Organizations such as AARP and the Campaign for Sustainable Rx Pricing are commending the work done to pass what's being called NAFTA 2.0.

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The House and Senate are expected to vote on the deal in the coming weeks.

The Pharmaceutical Research and Manufacturers of America said the deal puts politics over patients and does nothing to help patients afford their medicines.


Lowering drug prices has been the battle cry from legislators, provider and payer organizations and the federal government for at least the past two years.

Heading into the 2020 presidential election, the deal fulfills President Trump's 2016 campaign promise of updating NAFTA with Mexico and Canada.

Earlier this year, Centers for Medicare and Medicaid Services Administrator Seema Verma issued a rule requiring drug companies to post the prices of their drugs in TV ads.  A federal judge blocked that rule in July after Merck, Eli Lilly and Amgen sued the Department of Health and Human Services.


PhRMA liked the trade deal signed with Canada and Mexico last year, as it said it delivered strong intellectual property protections for American manufacturers. PhRMA contends that nothing in that original agreement would have changed U.S. law related to biopharmaceuticals or increased medical prices.

The deal has provisions for U.S trade agreements moving forward. It is an update of the 1994 North American Free Trade Agreement that eliminated nearly all tariffs on goods traded between the three nations, according to The Washington Post.


Ways and Means Committee Chairman Richard E. Neal, D-MA, said, "Democrats secured improvements aimed at enhancing North America's economic competitiveness and advancing the United States, Mexico, and Canada's collective work to empower workers, protect patients' access to affordable healthcare, and improve our shared environment."

AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond said, "AARP applauds Congress and the Administration for agreeing to remove provisions in the USMCA trade deal that would have let brand-name pharmaceutical companies keep generic drug competitors off the market longer, keeping drug prices high for Americans."

The Campaign for Sustainable Rx Pricing Executive Director Lauren Aronson said, "CSRxP commends the White House and lawmakers in Congress for standing up for American patients by amending the USMCA deal to support generic and biosimilar competition. As the legislative year comes to a close, it's essential policymakers work swiftly and across party lines to hold Big Pharma accountable and lower prescription drug prices by passing market-based solutions with bipartisan support into law."

PhRMA President and CEO Stephen J. Ubl said, "We cannot support abandoning provisions that protect American companies and raise standards abroad. We hope that Congress and the Administration will pursue international trade agreements that hold foreign governments accountable by ensuring that they protect and value the ongoing discovery of much-needed medicines to treat and potentially cure the world's most devastating diseases. The only winners today are foreign governments who want to steal American intellectual property and free ride on America's global leadership in biopharmaceutical research and development."

Twitter: @SusanJMorse
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