On July 11, 2019, more than 110 House Democrats wrote a letter to U.S. Trade Representative Robert E. Lighthizer expressing strong opposition to provisions in the United States-Mexico-Canada Agreement (USMCA) trade agreement, including the provision setting a minimum of 10 years of marketing exclusivity for biologic drugs.

As discussed here, in the United States, the Biologics Price Competition and Innovation Act (“BPCIA”) already provides for 12 years of data exclusivity for new biologics, exceeding the minimum 10 years under the USMCA. Thus, the USMCA does not purport to extend biologics monopolies in the United States, but instead requires Canada and Mexico to adopt a more similar exclusivity period.  However, two of the signatories to the letter, Representatives Jan Schakowsky, D-Illinois and Rosa DeLauro, D-Connecticut, introduced HR 3379, the Price Relief, Innovation, and Competition for Essential Drugs (PRICED) Act, in June 2019, seeking to shorten the exclusivity period for brand name biologic drug products from 12 years to only 5 years.

The House members argue that the current provisions in the USMCA “would keep drug prices out of reach for patients by increasing and locking in 10 years of marketing exclusivity for brand biologics, expanding the scope of brand biologics eligible for protection, and making it easier for brand-name drug companies to extend their monopolies through additional patents, patent extensions, and other forms of patent ‘evergreening.’”  The signatories warn that the opposed provisions “limit Congress’ ability to adjust the biologics exclusivity period, instead locking the US into policies that keep cancer and other drug prices high.”

The legislators request revisions to the access to medicines provisions in the USMCA to make them consistent with the Bipartisan Agreement on Trade Policy of May 10, 2007 struck during the George W. Bush Administration, summarized here.  That Agreement identified the following particular intellectual property elements:

  • Clarification that the period of protection for test data for pharmaceuticals by developing country FTA partners will generally not extend beyond the period that such protection is available for the same product in the United States, coupled with a provision that will encourage our partners to process marketing approval applications for innovative drugs in a timely manner.
  • Clarification that developing country FTA partners may implement exceptions to normal rules for protecting test data if necessary to protect public health.
  • A more flexible approach, for developing country partners, to restoring patent terms to compensate for processing delays. This flexibility is accompanied by new provisions stipulating that trading partners will make best efforts to process patent and marketing approval applications expeditiously.
  • More flexibility in terms of the types of procedures that developing country partners may implement to prevent the marketing of patent-infringing products.
  • Integration within the intellectual property chapter of a recognition that nothing in the chapter affects the ability of our FTA partners to take necessary measures to protect public health by promoting access to medicines for all, and a statement affirming mutual commitment to the 2001 Doha Declaration on the TRIPS Agreement and Public Health.

Notably, it has been the U.S. Trade Representative’s policy to negotiate trade agreements based on United States laws including the 12 year exclusivity period for biologic drug products.  Accordingly, the USMCA’s 10 year period appears to be a compromise reached with Canada’s current 8 year period.  Nevertheless, the legislators oppose the provision because the USMCA will limit Congress’ ability to reduce the biologics data exclusivity from 12 years to less than the 10 years required by the USMCA.

Given that the USMCA is a trade agreement seeking to protect U.S. trade interests including sales by U.S. pharmaceutical companies into Canada and Mexico, and not an agreement seeking to lower prescription drug prices in the United States, it is unlikely that presupposed benefits of removing the language will outweigh the more tangible benefits of extending biologic product manufacturers’ exclusivity periods in the Canadian and Mexican markets.