HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Friday, August 12, 2005

Big Pharma and CAFTA

As you are probably all aware, after a bit of arm-twisting, Congress passed and the President signed the Central American Free Trade Agreement (CAFTA). reports on some of the provisions that benefit Big Pharma in the bill that have received much attention.  The article states,

Though protections for the environment and workers' rights are often the most contentious issues surrounding trade deals such as CAFTA and NAFTA, pharmaceutical giants, aided by the U.S. government, are increasingly using these pacts to assert their power over markets in developing countries. Activists and public-health groups working on the ground say these companies put profits above public health by keeping generic medicines off the shelves, which keeps prices high and drugs out of reach to all but the most wealthy. These deals apply to all prescription drugs, but generics have been particularly effective at driving down the prices of drugs used to treat AIDS -- in some cases by 98 percent -- even as AIDS rates have skyrocketed. CAFTA is signed and delivered, and the United States is now preparing trade pacts with Thailand, South America and other parts of the developing world. . . . .   

Costa Rica's free, universal system depends on cheap drugs to keep costs down. Roman Macaya, executive director of the National Chamber of Generic Products of Costa Rica, says that if CAFTA-like protections had been in place, buying drugs would have put the system in financial jeopardy. Along with the Dominican Republic and Nicaragua, Costa Rica has yet to sign on to CAFTA and drug-pricing promises to be a big issue in the country's upcoming presidential election. "Costa Rica will most likely have to adopt a policy where older drugs are prescribed rather than the latest drugs even if HIV strains have evolved to be resistant to those older drugs," Macaya says. "Most of the drug prices for the new drugs are going to be out of reach under CAFTA."

That, he and others say, is because CAFTA contains several provisions designed to limit generic access. For example, drug companies get 20-year patent protection for their drugs from the moment they begin research and development, but they can apply to extend that time period. (A drug usually takes about 15 years to come to market.) In the United States, that time is limited, but under CAFTA, there's no upper limit on the extension the companies could obtain.

A more dire consequence lies in the short term. Generic companies seeking approval of their drugs usually use safety data from clinical tests that the name-brand companies conducted, obviating the need to repeat expensive and time-consuming work. CAFTA allows the original manufacturers to keep that data secret for five years after a company registers a drug. Generic companies need that data to market their drugs because it's not financially feasible to repeat those studies. And according to Rachel Cohen of Doctors Without Borders' Campaign for Access to Essential Medicines, "The requirement to retest a drug already proven to be safe and effective is medically unethical, because it forces a number of patients to take part in clinical trials which are not necessary and requires some to take placebos in order to compare outcomes with the actual drug and therefore forgo a proven treatment."

You can read the entire article at after viewing a brief ad.  [bm]

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