Los Angeles, United States – It’s a typical, sunny day in Los Angeles County and on the lot of the DreamWorks studios, birthplace of some of the world’s most recognizable animated movies – Shrek, Kung Fu Panda, and How to Train Your Dragon.
Throngs of employees wait for a man who’s no stranger to Hollywood: US President Barack Obama.
Some of the most powerful people in this town are here to welcome him, too. No, not Julia Roberts or Brad Pitt. People such as DreamWorks CEO Jeffrey Katzenberg, who along with partners Steven Spielberg and David Geffen happen to be some of Obama’s biggest Tinseltown financial boosters.
The place erupts as the Commander in Chief bounds onto the stage. He’s here to talk about the economy and, more importantly, about affordable healthcare, a shining achievement of his presidency and an issue that receives instant whoops of support whenever he mentions it.
But, as he reassures his base he has their back by increasing access to treatment and medicine for millions of Americans, critics argue he’s doing the exact opposite overseas, the consequences of which, according to one analyst, could be “devastating” for the poorest of the poor around the world. It comes in the form of an international trade agreement known as the Trans-Pacific Partnership, or TPP.
“I personally, as an American citizen, find it puzzling that the Obama administration is pushing for an economic policy abroad which will increase the cost of health care, reduce access, where at the same time, one of his signature presidential legacies is supposed to be affordable care,” Professor Susan Sell at George Washington University told Al Jazeera.
Sell has studied parts of the agreement leaked online, and is now a leading critic of the deal.
As Obama entered discussions with leaders in the Asia-Pacific region during his trip to China, Myanmar and Australia last week, the TPP is at the top of the agenda.
In addition to the US, the potential TPP signatories include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Although it’s been in the works for years, approval has been slower than expected and resistance to it has grown, particularly since parts of the deal were leaked to the media.
In November, 2013, WikiLeaks released some of the draft provisions online, worrying many people. Some of the proposals on intellectual property and patent protection have not only caused rifts within the TPP countries but have organisations such as Doctors Without Borders launching a full-scale counterattack to repeal them.
Sell said the most controversial section would protect a practice often referred to as “evergreening”, where a company extends a patent on a medicine in order to prevent generic competitors from releasing a copycat drug. A typical US patent on a new drug is 20 years, but Sell argued many companies will seek new patents by re-releasing the drug in a gel cap or liquid format in order to extend it beyond that.
“It’s not medically more efficacious,” said Sell. “It’s just a way of extending that patent monopoly and preventing generic drugs from coming into that market.”
Consider the pain relief drug OxyContin. The US Food and Drug Administration (FDA) approved its use in 1995. But, in 2010, as the original patent was a few years away from expiring, Purdue Pharma got approval and a new patent for a gel capsule that makes it harder for drug addicts to abuse the painkiller. Critics argue there was no significant change in the chemical makeup or formula, yet the new patent extends Purdue’s monopoly until 2025, ensuring no generic versions for 30 years.
Although this is a common occurance in the United States, Sell said evergreening could have a “devastating” effect on developing countries within the TPP, because it will prevent cheaper drugs for all kinds of illnesses – including cancer and AIDS – from making their way onto the marketplace.
But Mark Grayson, deputy vice president of the the Pharmaceutical Research and Manufacturers of America, one of the leading proponents of the TPP, disagreed. “The TPP agreement will do nothing to stop the distribution of medicines that are generic,” he told Al Jazeera.
Whenever you give someone monopoly power, that means that they're free to charge whatever they want to charge, and consumers really don't have that benefit of competition, which is how free markets are supposed to work.
Rather, the agreement, which he said has the possibility of being “transformative” for the economies of the countries involved, is simply an attempt to create a standard consistent with US law, “a system in which more than 85 percent of prescriptions are filled with generics”.
Moreover, he argued, pharmaceutical companies need reasonable patent protection so they can re-coup the enormous amount of money they spend researching and developing new drugs.
“The process of discovering and developing a new medicine is long, complex, and costly,” Grayson said. “Today, bringing a new medicine from concept to market can take an average of 10-15 years. As a result, the average cost to develop a new medicine has grown from $138 million in 1975 to an average of $1.2 billion in 2007, with recent estimates suggesting even more.”
Without proper patent protection, drug companies are forced to “shift future investments away from promising scientific opportunities, to the detriment of patients and health systems that depend on continued innovation”, Grayson added.
Still, TPP countries such as Vietnam and Malaysia have pushed back. In April, Malaysia’s International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the intellectual property protections are a no-go area, particularly because of what it would do to generic drug competition.
“For Malaysia, it is a vital issue,” he said, adding, “We will stand firm on the matter.”
And, it still appears to be a sticking point. During a press conference in Beijing, China last week, the top US trade negotiator Ambassador Michael Froman admitted intellectual property protections are one of the issues “we need to work through”.
But Sell said the American consumer will also take a hit.
“Whenever you give someone monopoly power, that means that they’re free to charge whatever they want to charge, and consumers really don’t have that benefit of competition, which is how free markets are supposed to work,” she said.