Trump trade deal protects biologic drugs from generics

The renegotiated trilateral trade deal between the U.S., Canada and Mexico included a big victory for pharmaceutical companies.

Known as the U.S-Mexico-Canada Agreement, the new pact, completed on Sunday, will protect biologic drugs from generic competition for at least 10 years in all three countries, compared to the current protection of eight years in Canada and five years in Mexico.

Biologics, drugs that come from a living organism through a highly complex manufacturing process, are currently protected from biosimilar competition for 12 years in the U.S.

“America really subsidizes our pharma industries,” Dr. Sam Waksal, the founder and former CEO of the biopharmaceutical company ImClone Systems, said on Wednesday. “In another way, it kept the patented product intact, so there is no biosimilar competition for an extra period of time in both of those countries. That’s a big deal for America.”

Waksal spent his life developing cutting-edge, life-saving drug therapies and acknowledged that while the cost of biologics will likely remain high because of the lack of competition, “there is a lot of pressure in America as well as the rest of the world on the pricing of drugs.”

“In America, part of that’s been not the pharmaceutical industry, not the biotech industry, but rather because of, for example, pharmacy benefit managers, who I believe are responsible for at least 30 percent of those pricing increases that we see,” Waksal said. “So there will be pressure on drug pricing. And it will be pushed in a positive way.”

A former senior GOP official told Axios that the deal will allow for the creation of new cures and medicines “without the United States being the piggy bank for all those research and development dollars.”

The Trump administration has often lamented the high prices of pharmaceuticals in the U.S., and in July began its broad initiative to reduce prescription drug costs, first laid out in a blueprint in mid-May.

According to Health and Human Services Secretary Alex Azar, the administration has already begun to set up legislative and regulatory action to incentivize companies to reduce drug prices. That includes the creation of a new, broader pathway for cheaper, over-the-counter drugs for people. Azar said at the time it’s now easier to create biosimilars, or generic versions of the high-cost biologics.