NLARx Executive
Director Warns Federal Trade Policies Threaten State-Level Drug Price Negotiations
Presentation to the
American Public Health Association Global Trade Forum Points to Evidence from
Past Trade Agreements and a New Proposed Multilateral Agreement on Pricing
FOR IMMEDIATE RELEASE:
November 10, 2009
CONTACT:
Rep. Sharon Treat, NLARx Executive Director
Working Group on Trade
207-242-8558 | streat@reducedrugprices.org
Maine Rep. Sharon Treat addressed the APHA Trade and Health
Forum today, describing past and present efforts of the US pharmaceutical
industry and federal trade officials to restrict evidence-based pricing of
pharmaceuticals. A copy of her
presentation is available on the NLARx page on trade.
Evidence-based Pricing refers to the practice of comparing
new therapies to existing ones to evaluate advances in safety, efficacy, and
cost effectiveness, and constructing open formularies to guide patients towards
the best options. State Medicaid
programs rely on discounts they negotiate with pharmaceutical firms through evidence-based
pricing strategies to provide medicines for over 58 million low income
Americans.
The pharmaceutical industry has lobbied federal trade
officials to seek the elimination or reform of the evidence-based pricing
mechanisms used by foreign governments. Specific language was included in the
bilateral trade agreements with Australia and Korea that require negotiators to
favor "innovative" or "patented" drugs over existing (often generic) ones. Less formal consultations on drug pricing
have taken place between US trade officials and their counterparts in Canada,
France, Germany, Italy, Japan, New Zealand, and Taiwan.
Last year, Pfizer CEO
Jeff Kindler and the late Stanford Professor John Barton proposed to the Senate
Finance Committee that trade officials should seek a "trade agreement among
developed countries ... to ensure that pricing and reimbursement policies
recognize and reward innovation, and to set disciplines on government practices
that undermine incentives for innovation."
Government officials and industry representatives have met to further
develop this proposal, but their meetings lack the transparency needed to know
their exact plan of action.
State leaders who negotiate prices for programs serving low
income Americans are alarmed that federal policy seeks to limit these types of
negotiations. They have pushed back against these trade policies, and
successfully lobbied for a provision in the Korea-US Free Trade Agreement that
protects Medicaid. However, it is clear that trade officials seek to set
international norms for negotiations that favor the branded drug industry, and
the newly proposed trade agreement further threatens state-level price
negotiations.
The National Legislative Association on Prescription Drug
Prices' Working Group on Trade helps states establish institutional mechanisms
both to provide ongoing oversight over trade policy, and to educate their
citizenry and policy makers about the connection between international trade
policy and affordable prescription drugs.
It is a comprised of state legislators, trade and Medicaid experts, and
representatives of state attorneys general.
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