Transcript Mike Palmedo. The Korus FTA Will Lead to Higher Drug Prices in

The Korus FTA Will Lead to
Higher Drug Prices in Korea
Mike Palmedo, Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
June 3, 2007 - Seoul, Republic of Korea
IPR Chapter of the New
Trade Policy for America
 Though portrayed in the media as a
compromise, language on access to
medicines still TRIPS-Plus.
 The intellectual property section is meant
to increase access to medicines in
“developing countries.” It is meant for the
FTAs with Peru, Panama, and Colombia.
Korus FTA & New Trade Policy
for America’s IP Guidelines
“Most of the IP provisions do not apply to the
Korus FTA. The one provision that would
apply is point 3(d).”
- Ways and Means Staff
May 29, 2007
Data Exclusivity
New Trade Policy
Korus FTA
 Five year period of data
exclusivity for New
Chemical Entities.
 Concurrent periods of
exclusivity if approval in
one nation is based on
approval in another
 Five year period of data
exclusivity for New
Chemical Entities.
 Three year period of data
exclusivity for drugs that
are not NCEs, but
required clinical testing
for approval.
 Non-concurrent periods
of exclusivity if approval
in one nation is based on
approval in another
“Linkage”
New Trade Policy
Korus FTA
 “No requirement that
the drug regulatory
agency withhold
approval of a generic
until it can certify that
no patent would be
violated if the generic
were marketed.”
 Parties must “implement
measures in its marketing
approval process to
prevent… other persons
from marketing a product
without the consent or
acquiescence of the
patent owner during the
term of a patent.”
Patent Extensions
New Trade Policy
Korus FTA
 Parties “may” include
patent extensions to
make up for delays in
the granting of either a
patent or marketing
approval.
 Parties “shall” include
patent extensions to
make up for delays in
the granting of either a
patent or marketing
approval.
Second Use Patents
New Trade Policy
Korus FTA
 Second use patents not
covered.
 Second use patents
mandatory.
Pharmaceuticals and
Medical Devices
Chapter Attacks the
Negotiations for
Reimbursement Rates
Scope of Medicines Section
US-Australia FTA
Korus FTA
 “Annex 2(c):
Pharmaceuticals”
 “Chapter 5:
Pharmaceuticals and
Medical Devices
“Innovative” or “Patented”
US-Australia FTA
Korus FTA
 Parties committed to “the
need to promote timely
and affordable access to
innovative
pharmaceuticals."
 Parties committed to
“access to high-quality
patented and generic
pharmaceutical products
and medical devices.”
 When determining
reimbursement for a
specific product, parties
shall "appropriately
recognize the value of
patented pharmaceutical
products and medical
devices in the amount of
reimbursement it
provides."
Transparency
US-Australia FTA
Korus FTA
 Ensure decisions within
a specified period of time
 Disclose "procedural“
rules and guidelines
used to assess a
proposed listing
 Make available an
“independent review
process”
 Includes all of the
mandates found in the
US-Australia FTA
 Obstacles to any future
reform of reimbursement
system.
 Make available an
“independent review
body”
The Pharmaceuticals
and Medical Devices
Chapter Will Affect
Korea, But U.S. Drug
Price Negotiations Are
Largely Unaffected
Footnote 1 - Excluding
Military Healthcare in U.S.
Pharmaceutical formulary development and
management shall be considered to be an aspect
of government procurement of pharmaceutical
products for healthcare agencies that engage in
government procurement. Chapter Seventeen
(Government Procurement) and not the provisions
of this Chapter shall govern government
procurement of pharmaceutical products.
State Governments in the
U.S. Negotiate
Reimbursement Rates for
Pharmaceuticals for Poor
and Disabled Patients
through Medicaid
State Senators Warn USTR
About US-Australia FTA Threat
to Medicaid
“The AUFTA undercuts the ability of states to consider cost
effectiveness as a factor when deciding to grant preferred
status to a drug. California's preferred drug list (PDL)
promotes the most cost-effective and therapeutically
advantageous products, while discouraging more expensive
alternatives that are found to have no real benefit in regard to
patient care. Any loss in bargaining power on behalf of the
State will increase costs, thus limiting the overall effectiveness
of California programs.”
- California State Senators
Liz Figueroa and Sheila Kuehl
USTR Attacks Health Reforms
During Korus FTA Negotiations
“…the decision to proceed with this plan is inconsistent
with both the mandate of the pharmaceuticals working
group and the market opening spirit of the KORUS
FTA…
…The positive list system as explained to our
delegation by the Ministry of Health would discriminate
against innovative drugs which are the types of drugs
that are mainly supplied by U.S. and other foreign
companies.”
-Assistant US Trade Representative Wendy Cutler
Chief US Negotiator for the US-Korea FTA
Carve-Out for State
Medicaid Programs
health care program operated by a Party’s central level of
government means a health care program in which the
health care authorities of a Party's central level of
government make the decisions regarding matters to which
this Chapter applies;[3]
FOOTNOTE 3:
For greater certainty, Medicaid is a regional level of
government health care program in the United States, not a
central level of government program.
Three Things to Remember
 The Korus FTA intellectual property chapter will
delay generic competition.
 The New Trade Policy for America does not
apply to the intellectual property chapter of the
Korus FTA.
 The Pharmaceuticals and Medical Devices
Chapter will encourage the Korean National
Health Insurance to favor expensive, brandname drugs.
wcl.american.edu/pijip