This blog was written by senior policy advisor Stephanie Burgos. Negotiations around the Obama administration’s major trade initiative, a free trade agreement called the Trans-Pacific Partnership Agreement (TPPA), are underway this week with talks ending in Australia tomorrow. The agreement is highly ambitious— it aims to set out a new trading framework with at least […]

This blog was written by senior policy advisor Stephanie Burgos.

Negotiations around the Obama administration’s major trade initiative, a free trade agreement called the Trans-Pacific Partnership Agreement (TPPA), are underway this week with talks ending in Australia tomorrow. The agreement is highly ambitious— it aims to set out a new trading framework with at least eight countries in Asia and Latin America. Unfortunately, if the US government gets its way, the agreement will be a major setback for millions of people living in poverty—including in three of the developing countries taking part in the negotiations—Peru, Malaysia, and Vietnam.

When Democrats took control of the House of Representatives in 2006, they signaled an end to “business as usual” on trade agreements. A difficult and substantive negotiation with the Bush administration resulted in a new template on the “intellectual property” chapter of trade agreements, and particularly on how this chapter would affect the affordability of medicines within the health care systems of our trading partners. The resulting agreement was called—for lack of something more inspired—the May 10^th deal. The May 10^th deal became the model trade agreement with Peru, Panama, and Colombia, which were eventually enacted by Congress.

Oxfam staff members were consulted on the May 10^th deal and, while we didn’t fully endorse it, we recognized that it was an important improvement over the earlier policies affecting access to medicines that the Bush administration had been pushing through trade agreements.

We had every expectation that the Obama administration would hold to the May 10^th deal, or even improve upon it. Unfortunately, public health advocates (including Oxfam) have been surprised and dismayed that the Obama administration has abandoned the May 10^th deal and seems intent on pursuing policies that will undermine access to affordable medicines for people living in poverty.

Based upon leaks of two US negotiating proposals for the TPPA released last year, it looks like US negotiators are running directly into the arms of the multinational pharmaceutical industry. The US proposals, buried in legal jargon, are an appalling corporate give-away to ’big pharma’ that empower one of this country’s most profitable industries to extend their lucrative monopolies and cripple the ability of governments to negotiate affordable medicine prices. Various legal and procedural rules in the US proposal would impose unaffordable medicine prices on low and middle income countries and obstruct low-cost generics from entering the market when monopolies for branded medicines produced by multinational drug companies expire.

Affordable medicines are critical to the health care of poor people, since most of the poorest pay out-of-pocket. Similar rules imposed on other countries have increased prices. In Jordan, which signed a trade agreement with the US, medicines prices increased by 20 percent overall and by as much as 10 times for key cancer and heart disease medicines, according to an Oxfam analysis.

Similar impacts were also found in Guatemala, which is part of another trade agreement with the US, according to a study in the journal Health Affairs. Not only were medicine price increases severe, but in many cases, low-cost generic medicines only entered the market long after they had been introduced in the US.

US government proposed terms under the TPPA would exact a heavy toll on the public health systems of our trading partners. Ironically, US taxpayers might also bear some of the cost. In the case of Vietnam, the U.S. provides millions of dollars in assistance to help pay for medicines to treat HIV and AIDS, a major public health problem in the country. If the Vietnamese government accedes to US demands in the TPPA, the cost of these medicines will most likely rise.

TPPA is definitely a step backward on public health and access to medicines. Despite attempts by the US Trade Representative’s office to spin it otherwise, it’s also a confounding step backward for the Obama administration.