The Evolution of Public Health Provisions in Preferential Trade and Investment Agreements of the United States
in Current Alliances in International Intellectual Property Lawmaking: The Emergence and Impact of Mega-Regionals, Global Perspectives for the IP System, eds. P. Roffe and X. Seuba, CEIPI-ICTSD, Issue No. 4, 2017, pp. 45-63
23 Pages Posted: 7 Sep 2017
Date Written: September 4, 2017
Bilateral, regional and plurilateral trade and investment agreements negotiated by the United States since the conclusion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) limit public health regulatory autonomy. In negotiating plurilateral trade and investment agreements (PT&IAs), the immediate post-Uruguay Round negotiating objectives of the United States involved filling in perceived gaps left in the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This included expanding the minimum scope of patent subject matter coverage, adding specificity regarding the criteria of patentability, requiring patent term extension, expanding the scope of obligations regarding protection of regulatory data through marketing exclusivity requirements, and bringing intellectual property (IP) disputes within the sphere of investor to state dispute settlement (ISDS).
More recently, the PT&IA template advanced by the United States initiates a deeper intrusion into the public health regulatory arena. The new template provides for intervention by pharmaceutical originator companies into government decision-making regarding whether to include particular drugs in national health formularies, and into decisions regarding pricing. Such provisions appear in agreements concluded by the United States with Australia and South Korea, and are part of the Trans-Pacific Partnership (TPP) Agreement from which the United States withdrew its signature. The latest template extends a requirement of regulatory market exclusivity to the area of biologic drugs, effectively mandating delays in the introduction of biosimilar products whether or not they are protected by patent.
President Trump has signalled an intention to negotiate, and renegotiate, trade deals in a way more favourable to the United States, suggesting that the USA has been unfairly taken advantage of in prior trade deals. This may come as a surprise to trade negotiators of other countries. At the same time, the President has expressed strong dissatisfaction with high pharmaceutical prices. It is unclear at this moment how these signals will be translated into future US trade negotiating positions. But, it would be surprising if the result is a relaxation of demands with respect to protection of intellectual property, including regulatory exclusivity, or a relaxation of the push towards regulatory intrusion.
As a matter of US law and practice, the provisions of PT&IAs are not directly incorporated in national law. The US Congress must expressly implement relevant provisions, and private litigants are not authorised to initiate court claims based directly on PT&IA terms. Only legislatively implemented provisions are subject to enforcement through the courts.
Countries negotiating and implementing PT&IAs with the United States should remain cautious in accepting obligations that may be directly effective in national law. The model of the United States requiring legislative transformation or implementation remains the prudent approach, allowing the legislature to do what it can to maintain a domestic balance that favours the interests of consumers and patients.
Keywords: PT&IA, intellectual property, public health, FTA, NAFTA, direct effect, patent, biologic, TRIPS
JEL Classification: I18, K33, O34, O38
Suggested Citation: Suggested Citation