What Are NAFTA’s Hidden Dangers to Health?
NAFTA renegotiations are underway, and just like the first time around, talks are occurring behind closed doors with corporations granted privileged access. Big pharmaceutical companies have outlined their NAFTA demands in official submissions to the U.S. government. They want added to NAFTA a whole raft of extreme new powers and privileges to raise prices that the U.S. government had forced into the Trans-Pacific Partnership (TPP).
Those TPP rules received widespread criticism — from the Vatican to consumer groups to The Economist magazine — for undermining consumers’ access to affordable medicines. Doctors Without Borders remarked that, “The TPP will … go down in history as the worst trade agreement for access to medicines.”
If included in the new NAFTA, these Big Pharma rules will:
- Make monopoly rights last longer through “evergreening” patents, keeping older medicines under monopoly control and thus letting corporations charge higher prices;
- Strengthen corporate control over clinical test data with “data exclusivity” requirements that mean governments must wait to register generic versions of medicines;
- Impose “marketing exclusivity” rules that lock in domestically and export 12-year monopolies on cutting-edge biologic medicines, such as many new cancer treatments;
- Extend monopoly patent terms beyond 20 years by requiring governments to make “adjustments;”
- Heighten border controls, which could be used even to limit people from importing less expensive medicine for personal use; and
- Grant new rights for pharmaceutical corporations to have a role in government healthcare programs’ drug coverage and reimbursement decisions, potentially thwarting cost-saving reforms, such as best practices for Medicare Part D bulk-purchasing negotiation powers.
What is NAFTA?
The North American Free Trade Agreement (NAFTA) went into effect in 1993 as an agreement between Mexico, Canada, and the United States. It was the first “trade” agreement that included new monopoly powers for Big Pharma companies. NAFTA was negotiated behind closed doors under the influence of hundreds of corporate advisors while the public and Congress were shut out. As a result, excessive patent and other intellectual property protections that block competition and keep prices high were inserted. Each NAFTA country is required to ensure that its domestic policies comply with those rules. Given that “free trade” is supposed to be about increased competition, and most people had no idea that a “free trade” deal would impose new monopoly rights for drug companies, NAFTA and many agreements modeled on it that followed provided a way for the industry to expand its power and keep prices high.
As a candidate, President Trump promised he would make NAFTA “a lot better.” Renegotiations started in August 2017, but once again, talks are occurring behind closed doors. The secrecy means it is impossible to know for sure what is being negotiated. The administration appears to have adopted some long-demanded progressive changes to eliminate NAFTA’s job outsourcing incentives. But when it comes to the NAFTA rules that affect medicine prices, Trump’s team is continuing to push the wish list of Big Pharma corporations.
The Effects of NAFTA on Health
1. NAFTA could threaten people’s access to vital new biologic medicines
NAFTA could impair patient access to emerging biologic medicines by delaying “generics” and keeping prices sky-high.
When drug companies charge $50,000 a year and up for biologics, speeding up access to biosimilars (like generics for biologics) is vital for guaranteeing access to treatment. However, U.S. NAFTA negotiators are demanding 12-year monopolies for biologics just at the time when some U.S. policymakers are seeking to reduce extended monopolies on biologics so that the medicines can more easily reach those who need them.
These monopolies, which block biosimilars, come in the form of “marketing exclusivity” where only the brand name company gets permission to market a medicine. Medicines are already covered by 20 year patents in the U.S. Special laws for biologics can give them extended time beyond that without competition. Under these NAFTA rules, if the U.S. wanted to change our own laws to speed up biosimilars, policymakers would be restricted by NAFTA requirements. Thus, the United States would be locked into its current bad system that keeps cancer medicine prices sky-high. And this damaging regime would be exported to Mexico, which now does not provide any additional exclusivity period for biologic medicines, and to Canada, which now has an eight-year period. The net effect: decreased access for patients who need these medicine to stay alive.
What are Biologic Medicines?
Biologics are medicines that are made from live cells and/or biotechnology. They include immunotherapies, vaccines, gene therapies, and monoclonal antibodies.
These medicines are vital for preventing diseases and treating cancer, heart disease, diabetes, Crohn’s, and other common illnesses. For cancer patients, these breakthrough medications often provide effective treatments with fewer harmful side effects than traditional chemotherapy.
Recent years have seen rapid growth in the number of biologics. In 2014, seven of the top eight best selling drugs in the United States were biologics. New biologics in the pipeline offer hope to families for future cures.
Thousands of Americans are benefiting now from biologics, with numbers expected to grow rapidly, since about 30% of Americans are diagnosed with cancer during their lifetimes.
2. NAFTA could contribute to skyrocketing U.S. health costs, insurance premiums, and taxes.
We all subsidize overpriced prescriptions through our insurance premiums and tax dollars that pay for Medicare, Medicaid, veterans’ health, and other government programs. Proposed NAFTA rules would hamper negotiation for reasonable prices. They would lock in a distorted system that incentivizes expensive treatment for advanced disease rather than affordable and preventative treatment. These problems lead to excessive insurance premiums, high co-pays, and high taxes being funneled to private companies.
3. NAFTA could incentivize legal maneuvers instead of innovation
Proposed NAFTA rules would mandate policies that extend drug monopolies for some tweaks of existing medicines (such as extended release dosing or new delivery mechanisms), known as “evergreening.” Doctors Without Borders explains what these same rules would have done in the TPP:
“The TPP includes measures that… enable ‘evergreening’ by requiring countries to grant additional 20-year patents for modifications of existing medicines, including new uses, new methods or new processes of using, existing medicines. These provisions extend monopoly protection that enables pharmaceutical companies to delay competition and keep prices high over many more years for products that are already on the market.” — Doctors Without Borders
With evergreening laws locked in by NAFTA, brand-name pharmaceutical companies would continue to have incentives to hire more lawyers to fight for extended patents on existing medicines, and more marketers to push new names for old drugs with different dosing, rather than hiring more researchers to find new medicines that extend lives.
4. Proposed NAFTA rules would diminish access to medicines overseas, and thus could contribute to future epidemics that spread across borders.
We know from the spread of the Zika virus in the U.S. and the ebola outbreak that microbes do not respect borders. And we know from the HIV/AIDS epidemic that delaying generics and keeping prices high can fuel the spread of deadly diseases overseas. The effect of NAFTA on delaying generics will hit especially hard on Mexico and set a dangerous precedent in future U.S. pacts with lower-income countries. These delays can give diseases time to gain a foothold and become epidemics that can spread around the world. The resulting high cost of medicine will also distort efforts to improve health systems in other countries, and make foreign aid less effective, with more money going to expensive medicines and less left over for basic health needs and prevention.
5. NAFTA already allows international drug companies to sue the U.S. government if they think U.S. law decreases expected profits.
NAFTA, as it currently exists, empowers multinational corporations to sue governments before a panel of three corporate lawyers to demand unlimited compensation from taxpayers if they think a law or government action violates their new rights. This means pharmaceutical companies are able to use this so-called “investor-state dispute settlement” (ISDS) system in NAFTA to directly attack domestic patent and drug-pricing laws.
Drug firm Eli Lilly launched such a case against Canada, demanding $500 million for the government’s enforcement of its own patent standards. Often initiatives to improve laws are chilled by the mere filing of such an “investor-state” case. In other instances, countries eliminate the attacked policies. The current U.S. proposal eliminates ISDS, but the corporate lobby has not given up yet.
NAFTA would be a threat to Congress’s power to craft effective policy for decades to come. “Handcuffs on Policymakers”
If a renegotiated NAFTA passes, and later any signatory country wants to change the policies it mandates, all three signatory countries would have to agree to any text change, however small. . Bad policies that result from a renegotiated NAFTA would therefore be locked in for decades to come, affecting the health needs of future generations. That is like putting handcuffs on policymakers.
Who Is Concerned About Health in NAFTA Renegotiation?
* Health advocacy groups, including Doctors Without Borders, Oxfam, the Alliance for Retired Americans, Social Security Works, and Health Global Access Project (GAP);
* Faith groups such as the NETWORK Lobby for Catholic Social Justice, People of Faith for Access to Medicines, the U.S. Conference of Catholic Bishops, Franciscan Action Network, and the Presbyterian Church (USA);
* Labor unions, including the AFL-CIO, Teamsters, Communications Workers of America, United Auto Workers, International Association of Machinists and Aerospace Workers, the American Federation of Teachers, and the National Farmers Union;
* Environmental groups like the Sierra Club, 350.org, Greenpeace, Friends of the Earth, and Food & Water Watch;
* And dozens of other civil society organizations, including Our Revolution, Progressive Democrats of America, and Public Citizen.
“Please demand that NAFTA be replaced with a fair new trade agreement that … Makes medicine more affordable by eliminating NAFTA rules that increase costs. No terms that extend beyond the existing World Trade Organization patent rules or that limit countries’ abilities to negotiate lower prices for government health programs like Medicare or Medicaid are acceptable.”
Congress Will Vote on a Final NAFTA Deal Soon
We call upon all Members of Congress to demand a renegotiated NAFTA that protects patients, workers, and the environment.
“If you have ever needed medication, if you have ever had a loved one impacted by cancer, if you care about how we access medicine here in the US and around the world, please call your member of Congress” — Hannah Keppler, American Medical Student Association
Call the Congressional switchboard at 202-224-3121. Ask to be connected to the Member of Congress for your zip code. Tell that Member:
“My name is _______ and I live in _____. Please demand a NAFTA renegotiation that protects access to medicine, workers and the environment.”
Sign the Petition today!
Talk to your friends, family, doctors, and co-workers about the threat of NAFTA.