US-Mexico-Canada Agreement (USMCA)
Investment Policy Options for Facing COVID-19 Related ISDS Claims
By Daniel Uribe and Danish
Developing and least developed countries have undertaken a number of measures to fight against the multidimensional impacts of the COVID-19 pandemic. Such measures and those that may be adopted in the context of the recovery efforts are, however, susceptible to challenges by foreign investors using investor-State dispute settlement mechanisms.
This policy brief first considers the kinds of measures States have adopted to limit the spread of COVID-19, protect their strategic sectors and promote economic recovery, including through foreign investment aftercare and retention. It then addresses how the investor-State dispute settlement system (ISDS) has been used by investors in times of crises, based on the analysis of the awards in several cases brought against both developed and developing countries.
Against this backdrop, the brief elaborates on the different options and initiatives States can take for preventing ISDS claims at the national, bilateral, regional and multilateral levels. It concludes with some policy advice for developing and least developed countries to face possible COVID-19 related ISDS claims in the future.
A New Trend in Trade Agreements: Ensuring Access to Cancer Drugs
By Maria Fabiana Jorge
A World Health Organization (WHO) report on cancer indicates that the cancer burden will increase at least by 60% over the next two decades, straining health systems and communities. Companies develop cancer drugs in part because payers are less resistant to paying high drug prices for these drugs. As Barbara Rimer, Dean of the University of North Carolina and Chair of the U.S. President’s Cancer Panel stated, “[m]ost cancer drugs launched in the United States between 2009 and 2014 were priced at more than $100,000 per patient for one year of treatment.” Many of the new cancer drugs are biologics. Such prices are clearly out of reach for most patients who will need them increasingly more to stay alive. While competition is critical to ensure lower drug prices, we have seen a number of strategies, including through trade agreements, to prevent competition and extend monopolies over these drugs and their very high drug prices. It is no accident that the exclusivity granted to biologic drugs has been one of the most conflictive provisions in recent trade agreements such as the United States-Mexico-Canada Agreement (USMCA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Nevertheless a new trend in trade agreements started in 2007 when U.S. Members of Congress pushed back against the interests of powerful economic groups seeking longer monopolies for drugs. These Members of the U.S. Congress prevailed then in restoring some balance in the trade agreements with Peru, Colombia and Panama and further consolidated this new trend in 2019 in the USMCA. Moreover, following the U.S. withdrawal from the original Trans-Pacific Partnership (TPP), the negotiators of the remaining 11 countries also pushed back to ensure a better balance between innovation and access in the CPTPP. People around the world need to be aware of these precedents and ensure that they also work for access to medicines for their own citizens.
US-China trade deal: preliminary analysis of the text from WTO perspective
By Peter Lunenborg
The long-awaited ‘Phase 1’ trade deal between the United States and China, officially termed the ‘Economic and Trade Agreement between the Government of the United States of America and the Government of the People’s Republic of China’, was signed on 15 January 2020. It will enter into force on Valentine’s Day, on Friday, 14 February 2020. This deal is a result of US exercise of political power and unilateral World Trade Organization (WTO)-inconsistent tariffs in order to extract trade concessions, an expression of the most pure protectionism that the WTO is supposed to prevent. Nevertheless, the WTO was unhelpful in addressing the US economic aggression against China. This failure to protect a Member from illegitimate unilateral measures is, perhaps, one of the most significant manifestations of the often-mentioned ‘crisis’ of the WTO, and actually is one of the subjects on which the proposed ‘reform’ of the organization should focus.
The worldwide problem of the rise in antimicrobial resistance (AMR) is a serious threat to global public health. The loss of efficacy of antibiotics and other antimicrobials affects everyone. Yet the threat is greater in developing countries, due to the higher incidence of infectious diseases. Developing countries will be unequivocally affected by AMR, deteriorating the health of the population, reducing economic growth and exacerbating poverty and inequalities. The blueprint for addressing AMR as a global problem is advanced. Countries are progressing in developing and implementing national action plans and overall the public awareness of AMR is increasing.
However, we are at the tip of the iceberg of response. AMR is not yet a key priority of most governments, and global coordination and resource mobilization to enable all countries to do their part are lagging. The Secretary-General of the United Nations (UN) in the upcoming 74th UN General Assembly (UNGA) will be reporting on the implementation of the UN resolution on AMR of 2016, including the recommendations of the Interagency Coordination Group (IACG) on Antimicrobial Resistance. The UNGA will also host a High-Level Meeting to build support for advancing Universal Health Coverage (UHC), that is essential for AMR response. Expanding primary health care services, strengthening the health work force, improving infection prevention and control and measures to secure access to essential medicines and others to reduce health inequities can help contain AMR in developing countries. Developing countries need to be actively involved in shaping the global agenda on antimicrobial resistance, including the new global governance mechanisms that are being set up for AMR.
USMCA debe ser enmendado para asegurar el acceso a medicamentos en México
Por Maria Fabiana Jorge
El capítulo del U.S.-Mexico-Canada Agreement (USMCA)/Tratado entre México, los Estados Unidos y el Canadá (T-MEC) dedicado a los derechos de propiedad intelectual (DPI) otorga monopolios más prolongados y amplios a las empresas de medicamentos originales que los que están actualmente en vigor en México, a costa de los pacientes y los contribuyentes. Entre otras cosas, México tendría que conceder a las ampliaciones de la vigencia de las patentes períodos de exclusividad más amplios y prolongados, también para los medicamentos biológicos costosos, tanto por las demoras en la concesión de patentes como para aquellas que se encuentren en el proceso reglamentario de aprobación, y ampliar las normas de patentabilidad, por ejemplo, exigiendo la concesión de patentes para nuevos usos. México es, sin lugar a dudas, el país del T-MEC que se verá más perjudicado, pero si los miembros del Partido Demócrata de la Cámara de Representantes de los Estados Unidos pueden renegociar algunas de estas disposiciones para restablecer cierto equilibrio entre la necesidad de fomentar la innovación y la competencia, el Gobierno del presidente López Obrador y el Congreso de México todavía pueden cambiar la situación.
Inequality is one of the greatest challenges that the world needs to face. Inequality is intimately linked with poverty. Although there has been progress in reducing poverty, a large part of the global population (overwhelmingly living in developing countries) is still denied access to a dignified life. While no poverty and reduced inequality are two of the outstanding Sustainable Development Goals, these and other goals are unlikely to be achieved by 2030. In fact, inequality is on the rise. Changing this situation will certainly require significant efforts at the national and regional level. But it also requires an international architecture that supports those efforts by respecting the policy space that countries need and coordinating constructive actions within the multilateral system. The current initiatives to ‘reform’ this system will only be legitimate if they recognize the gaps in the levels of development and contribute to effectively address them under a fair, pro-development system of rules. Please see last month’s SouthViews on “Understanding global inequality in the 21st century” by Jayati Ghosh, development economist and Professor of Economics at Jawaharlal Nehru University.
Access to medicines: US democrat lawmakers oppose intellectual property rules in the USMCA restraining access to affordable biosimilars
On July 11, 2019, US democrat lawmakers signed a letter addressed to US Trade Representative Robert E. Lighthizer, expressing strong opposition to provisions that limit access to medicines in the United States-Mexico-Canada Agreement (USMCA). They are requesting to amend the USMCA to increase competition and enhance patient access to more affordable prescription drugs, particularly biosimilars. The current USMCA text would limit Congress’ ability to adjust the biologics exclusivity period, locking the US into policies that keep drug prices high while exporting this model to Mexico and Canada. Below is a link to the letter.
Le 11 juillet 2019, représentants démocrates du Congrès américain ont signé une lettre adressée à Robert E. Lighthizer, le représentant américain au commerce, exprimant leur forte opposition aux dispositions de l’Accord conclu entre les États-Unis, le Mexique et le Canada, qui limitent l’accès aux médicaments. Ils demandent que les dispositions de l’Accord soient modifiées afin de favoriser davantage la concurrence et de faire en sorte que les patients puissent accéder à des médicaments sur ordonnance à un coût abordable, en particulier les médicaments biosimilaires. Le texte actuel de l’Accord a pour conséquence de limiter la capacité du Congrès à ajuster la durée de la période d’exclusivité pour les médicaments biologiques, enfermant les États-Unis dans une politique tendant à maintenir le prix des médicaments à un niveau élevé tout en exportant le modèle au Mexique et au Canada. Vous trouverez ci-dessous le lien sous lequel la lettre peut être consultée.
El 11 de julio de 2019, legisladores demócratas de los Estados Unidos firmaron una carta dirigida al representante de Comercio de los Estados Unidos, Robert E. Lighthizer, expresando su firme oposición a las disposiciones que limitan el acceso a medicamentos en el Tratado entre México, los Estados Unidos y el Canadá (T-MEC). Solicitan modificar el T-MEC para aumentar la competencia y mejorar el acceso de los pacientes a medicamentos con receta más asequibles, especialmente a los biosimilares. El texto actual del T-MEC limitaría la capacidad del Congreso para adaptar el período de exclusividad de los medicamentos biológicos, lo que obligaría a los Estados Unidos a establecer políticas que mantengan altos los precios de los medicamentos mientras se exporta este modelo a México y al Canadá. A continuación, se encuentra un enlace a la carta.
The USMCA must be amended to ensure access to affordable drugs in Mexico
By Maria Fabiana Jorge
The intellectual property rights (IPRs) chapter of the U.S.-Mexico-Canada-Agreement (USMCA) grants longer and broader monopolies to originator pharmaceutical companies than those currently in force in Mexico, at the expense of patients and taxpayers. Among other things, Mexico would be required to provide patent term extensions both for delays in the granting of patents and for those incurred in the regulatory approval process, broader and longer exclusivity periods, including for expensive biologic drugs, as well as to adopt broader patentability standards, for example by requiring the granting of patents for new uses. Mexico is, without doubt, the country in the USMCA that will be most negatively impacted, but if the Democratic Members of the US House of Representatives are able to renegotiate some of these provisions to restore some balance between the need to foster innovation and competition, the Administration of President López Obrador and the Mexican Congress can still make a difference.
The US-Mexico-Canada Agreement: Putting Profits Before Patients
By Maria Fabiana Jorge
In the US-Mexico-Canada Agreement (USMCA, NAFTA 2.0), the U.S. Trade Representative negotiated intellectual property provisions related to pharmaceuticals that would enshrine long and broad monopolies. This policy brief focuses primarily on the negative effects of the USMCA intellectual property provisions on access to medicines in the U.S. Such effects may be even worse for Canada and Mexico. The impact of this trade agreement goes well beyond the three countries involved as this is the first one negotiated by the Trump Administration and is likely to set a precedent for future trade agreements. A careful review of the USMCA text raises very serious concerns about the impact that this agreement would have on the generic/biosimilar industry and therefore on access to more affordable drugs throughout the world.