Speaker Nancy Pelosi recently announced that House Democrats are “on the path” to ratifying the United States-Mexico-Canada Agreement (USMCA), the trade deal that President Trump negotiated last fall.
That’s great news for millions of Texans battling chronic diseases. The trade pact would spur the development of new, lifesaving drugs.
USMCA would overhaul the North American Free Trade Agreement, which went into effect in 1994. One of the new deal’s most important provisions deals with biologics, which are advanced drugs made from living organisms. Physicians use biologics to treat everything from diabetes to cancer.
Developing these drugs is no walk in the park. It can cost $2.6 billion and take nearly 15 years to bring just one new medicine to market. And only 12 percent of experimental treatments survive clinical trials.
To incentivize companies to invest in this risky research, the United States provides 12 years of “regulatory data protection” to biologics. During this period, rival companies can’t access innovators’ clinical trial data to create knockoff versions of these drugs. As a result, innovators have a fair chance to recoup their enormous development costs.
Not every country offers such strong protections for biologics. Currently, Canada provides eight years of data protection, while Mexico provides none at all. These shorter data protection periods cut into American companies’ foreign sales, thus discouraging future investments in drug development.
USMCA would bring Canada and Mexico closer to U.S. standards. The deal requires both countries to provide 10 years of data protection for biologics, but doesn’t alter the 12-year standard in the United States.
By protecting American intellectual property across the continent, USMCA will encourage companies to create and test more experimental biologics. Scientists are already conducting close to 2,000 clinical trials in Texas alone. And the biopharmaceutical industry supports 228,000 local jobs. Those numbers will surely rise if Congress ratifies USMCA.
More research ultimately means more new treatments for the 15 million Texans who live with at least one chronic disease.
Critics of USMCA’s biologics provision claim it will raise drug prices for patients in America and abroad. But they have no evidence to support that claim.
Consider what happened in 2006, when Canada lengthened its regulatory data protection period for all new medicines. In the years that followed, Canada’s drug spending as a proportion of overall health expenditures actually decreased, according to the Geneva Network, a public policy research firm. The same thing happened when Japan implemented a longer period of regulatory data protection in 2007.
Simply put, lawmakers can help sick Texans by ratifying USMCA and ushering in a future full of medical breakthroughs.