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PNHP RESOURCES

Two days away from a perilous blow to health care justice

GOP to hold trade vote Friday

By Scott Wong
The Hill, June 10, 2015

The House will vote Friday on giving President Obama fast-track trade authority, which would allow him to send a major trade deal with 11 other Pacific Rim nations to Congress for an up-or-down vote.

As part of the agreement, Republicans agreed to scrap the Medicare sequester offset, which Democrats objected to.

http://thehill.com/homenews/house/244472-gop-huddles-on-trade-vote-timing

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Transparency Chapter Annex on Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices

Trans-Pacific Partnership Agreement
WikiLeaks, June 10, 2015

Description

This is the secret December 2014 draft (with country negotiating positions) of an annex to the Trans- Pacific Partnership Agreement (TPP) "Transparency Chapter". The TPP is an attempt to create a transnational treaty regime encompassing 40 per cent of global GDP and one-third of world trade.

The draft Annex places requirements and restrictions on national healthcare access programs in how they allocate public subsidies for medicines and medical devices.

TRANSPARENCY CHAPTER (Excerpts)

PARAGRAPH X.1: PRINCIPLES

The Parties are committed to facilitating high-quality healthcare and continued improvements in public health for their nationals including patients and the public. In pursuing these objectives, the Parties acknowledge the importance of the following principles:

(a) the importance of protecting and promoting public health and the important role played by pharmaceutical products and medical devices2 in delivering high quality health care;
(b) the importance of research and development, including associated innovation, related to pharmaceutical products and medical devices;
(c) the need to promote timely and affordable access to pharmaceutical products and medical devices, through transparent, [xx oppose: impartial,] expeditious, and accountable procedures, without prejudice to a Party’s right to apply appropriate standards of quality, safety, and efficacy; and
(d) the need to recognize the value of pharmaceutical products and medical devices through the operation of competitive markets or by adopting or maintaining procedures that appropriately value the objectively demonstrated therapeutic significance of a pharmaceutical product or medical device.

PARAGRAPH X.2: PROCEDURAL FAIRNESS

To the extent that a Party’s national health care authorities operate or maintain procedures for listing new pharmaceutical products or medical devices for reimbursement purposes, or setting the amount of such reimbursement, under national health care programs operated by the national health care authorities,34 the Party shall:

(b) disclose procedural rules, [xx propose; xx considering: methodologies, principles, and [xx oppose; xx propose: where relevant,] guidelines used to assess such proposals6;

(e) provide applicants with [xx propose: detailed] written information [xx propose: sufficient to comprehend] [xx oppose: regarding] the basis for recommendations or determinations regarding the listing of new pharmaceutical products or medical devices for reimbursement by national healthcare authorities;
(f) make available [xx propose: xx considering: an independent] review process [xx propose; xx oppose:8] that may be invoked at the request of an applicant directly affected by such a recommendation or determination by a Party’s national healthcare authorities not to list a pharmaceutical or medical device for reimbursement [xx propose: xx considering: or as an alternative, an internal review process, such as by the same expert or group of experts that made the recommendation or determination, provided that such a review process includes, at a minimum, a substantive reconsideration of the application and may be invoked at the request of an applicant directly affected by such recommendation or determination]9; and
(g) provide written information to the public regarding such recommendations or determinations, while protecting information considered to be confidential under the Party’s law.

PARAGRAPH X.4: CONSULTATION

1. To facilitate dialogue and mutual understanding of issues relating to this Annex, each Party shall give sympathetic consideration to [xx propose: and shall afford adequate opportunity for consultation regarding] a written request by another Party [xx oppose: to consult] on any matter related to this Annex.

PARAGRAPH X.6: DEFINITIONS

national health care authority means, with respect to a Party listed in the schedule to this Annex, the relevant entity or entities specified therein, and with respect to any other Party, an entity that is part of or has been established by a Party’s central level of government to operate a national health care program;

national health care program means a health care program in which a national health care authority makes the [xx propose: determinations or recommendations] [xx oppose: decisions] regarding the listing of pharmaceutical products or medical devices for reimbursement, or regarding the setting the amount of such reimbursement.

PARAGRAPH X.7: Disputes

The dispute settlement procedures provided for in Chapter BBB (Dispute Settlement) shall not apply to this Annex.

SCHEDULE TO ANNEX

Further to the definition of national healthcare authorities in Paragraph X.6, national healthcare authorities shall mean:

(c) [xx propose: For the United States: The Centers for Medicare & Medicaid Services (CMS), with respect to CMS’s role in making Medicare national coverage determinations;]

https://wikileaks.org/tpp/healthcare/WikiLeaks-TPP-Transparency-Healthca...

WikiLeaks press release
https://wikileaks.org/tpp/healthcare/press.html

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MEMO: Three Burning Questions about the Leaked TPP Transparency Annex and Its Implications for U.S. Health Care

Public Citizen, June 10, 2015

Contact: Peter Maybarduk

Today, WikiLeaks published the draft Trans-Pacific Partnership (TPP) “Annex on Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices.” This Annex sets rules that TPP country health authorities would be required to follow regarding pharmaceutical and medical device procurement and reimbursement. The draft is dated December 17, 2014. An earlier version leaked in 2011. Unlike that document, the new leak expressly names the Centers for Medicare & Medicaid Services (CMS) as covered by the text, “with respect to CMS’s role in making Medicare national coverage determinations.” Under the TPP, then, these determinations would be subject to a series of procedural rules and principles, the precise meaning of which are not clear and perhaps not knowable.

Pharmaceutical companies could attempt to exploit the general language of the annex to mount challenges to Medicare and health programs in many TPP negotiating countries. The Annex would constrain future policy reforms, including the ability of the U.S. government to curb rising and unsustainable drug prices.

What guarantees are there that the TPP’s requirements would not override existing procedures for Medicare?

The Office of the United States Trade Representative (USTR) claims that Medicare today is fully compliant with the proposed provisions of the TPP. Yet the ambiguous language of the TPP leaves our domestic healthcare policies vulnerable to attack by drug and device manufacturers. For example:

  • Could companies use the Annex to compel Medicare to cover expensive products without a corresponding benefit to public health? Medicare reimbursement is limited to products that are “reasonable and necessary” for treatment. But the TPP “recognize[s] the value” of pharmaceutical products or medical devices through the "operation of competitive markets" or their "objectively demonstrated therapeutic significance," regardless of whether there are effective, affordable alternatives.
  • The TPP also requires countries to “make available a review process” for healthcare reimbursement decisions. Medicare national coverage determinations allow for appeals, but only in a limited set of circumstances.2 Might this conditional appeal process be construed as insufficient, if companies argue the TPP grants them an unconditioned right to review?
  • Similarly, the TPP mandates that parties provide opportunities for applicants to comment on reimbursement considerations “at relevant points in the decision-making process.” Though Medicare national coverage determinations allow for comments in certain stages of the process, these determinations may be vulnerable to legal challenge depending on the construction of “relevant points.”

Would the TPP constrain pharmaceutical reform efforts in the U.S.?

In addition to its application to Medicare Part A and B, the Annex would apply to any future efforts related to national coverage determinations by the CMS, including potential Medicare Part D reforms.

In response to soaring drug costs, advocates have increasingly called on the government to enable the Secretary of Health and Human Services to negotiate the price of prescription drugs on behalf of Medicare beneficiaries. Vital to this reform would be the establishment of a national formulary, which would provide the government with substantial leverage to obtain discounts.

The development of such a national formulary would be subject to the requirements of the TPP. These procedural requirements would pose significant administrative costs, enshrine greater pharmaceutical company influence in government reimbursement decision-making and reduce the capability of the government to negotiate lower prices.

http://www.citizen.org/documents/memo-burning-questions.pdf

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Comment:

By Don McCanne, M.D.

The Senate has already approved fast-track trade authority, and the House will vote on it in just two days. If it passes, it will allow President Obama to send Congress the Trans-Pacific Partnership trade agreement (TPP) for an up-or-down vote, with no amendments allowed.

There are many issues with forcing blanket approval of this trade agreement, but one that should be of great concern to advocates of health care justice is the extraordinary power granted to the pharmaceutical and medical device industries to control markets and prices at home and abroad.

WikiLeaks has released a working copy of the TPP Transparency chapter for “procedural fairness” for pharmaceutical products and medical devices. Simply reading the “Principles” reveals that the fairness sought is for the pharmaceutical and medical device industries to be able to use “procedural fairness” to control markets and prices, threatening affordability of their products for patients and for national health systems.

Just one phrase of their principles, “by adopting or maintaining procedures that appropriately value the objectively demonstrated therapeutic significance of a pharmaceutical product or medical device,” repeats the rhetoric that is being used by the industry now when they say that it is not their costs that should determine prices but rather it is the value of the benefit received. A recent campaign used this reasoning to justify egregious pricing for hepatitis C drugs since they would prevent expensive liver transplants and premature death. The industry contends that they are entitled to capture the dollar value of extended, higher quality lives and the value of potential future medical care that was aborted by their products.

If for no other reason, everyone in the United States should be concerned that our own Medicare program is potentially threatened by the processes in the TPP.

The vote is scheduled for Friday, June 12 - just two days away. We need to “fast track” ending TPP fast-track authorization. Contact members of the House of Representatives immediately.