Trade agreements are negotiated by the office of the United States Trade Representative, supposedly on behalf of the American people. Historically, though, the trade representative’s office has aligned itself with corporate interests. If big pharmaceutical companies hold sway — as the leaked documents indicate they do — the T.P.P. could block cheaper generic drugs from the market. Big Pharma’s profits would rise, at the expense of the health of patients and the budgets of consumers and governments.
There are two ways the office of the trade representative can use the T.P.P. to maintain or raise drug prices and profits.
The first is to restrict competition from generics. It’s axiomatic that more competition means lower prices. When companies have to fight for customers, they end up cutting their prices. When a patent expires, any company can enter the market with a generic version of a drug. The differences in prices between brand-name and generic drugs are mind- and budget-blowing. Just the availability of generics drives prices down: In generics-friendly India, for example, Gilead Sciences, which makes an effective hepatitis-C drug, recently announced that it would sell the drug for a little more than 1 percent of the $84,000 it charges here.
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The second strategy is to undermine government regulation of drug prices. More competition is not the only way to keep down the prices of essential goods and services. Governments can also directly restrain prices through law, or effectively restrain them by denying reimbursement to patients for “overpriced” drugs — thus encouraging companies to bring down their prices to approved levels. These regulatory approaches are especially important in markets where competition is limited, as it is in the drug market. If the United States Trade Representative gets its way, the T.P.P. will limit the ability of partner countries to restrict prices. And the pharmaceutical companies surely hope the “standard” they help set in this agreement will become global — for example, by becoming the starting point for United States negotiations with the European Union over the same issues.
http://www.nytimes.com/2015/01/31/opinion/dont-trade-away-our-health.html?_r=0
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