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NAFTA 2.0 Pharma Patent Analysis

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The Intellectual Property (IP) Chapter of the revised North American Free Trade Agreement (NAFTA 2.0), rebranded by the Trump Administration as the U.S.-Mexico-Canada Agreement or USMCA, includes provisions that threaten to undermine critical efforts toward affordable health care and medicine. The NAFTA 2.0 text that was signed on Nov. 30 includes significant and harmful changes to the original NAFTA IP provisions. These build on concepts included in other U.S. free trade agreements (FTA) on behalf of the pharmaceutical industry since NAFTA 1.0. This analysis reviews the pharmaceutical related patent provisions of that text.

Overall, the NAFTA 2.0 text includes improvements on some issues Public Citizen has long demanded, most notably Investor-State Dispute Settlement. The Nov. 30 text also reveals that more work is needed, especially with respect to ensuring the swift and certain enforcement of labor standards and environmental standards. However, one way in which, NAFTA 2.0 is dramatically worse than NAFTA 1.0 is that it would help pharmaceutical companies avoid generic competition and keep medicine prices high. The text closely mimics the language and structure of the original U.S.-proposed IP terms in the Trans-Pacific Partnership Agreement (TPP) — now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The TPP was fiercely criticized for the pharma-friendly patent-related provisions that put the health and well-being of people in the TPP countries at risk. Following the U.S. withdrawal from that agreement, many of those damaging provisions were suspended by the CPTPP countries.

NAFTA 2.0, however, incorporates almost all of these pro-monopoly pharma-friendly patent-related provisions. In some circumstances, it even goes beyond the original TPP. To comply with the terms of the Nov. 30 text, Mexico and Canada would need to change their existing laws to provide new exclusivities for pharmaceutical companies, which would limit generic competition and raise prescription drug costs. These terms would also lock the United States into policies that have contributed to making U.S. medicine prices the highest in the world.

The analysis below reviews the most controversial provisions that would affect pharmaceutical prices and availability of medicines in the United States, Canada, and Mexico. It only covers some of the main obligations of the IP measures relating to patents and pharmaceutical or regulated products in the final text. It should be noted that the interpretation of this Chapter is also likely to depend on provisions in other NAFTA 2.0 chapters.