If at first your eyes glaze over at mention of the proposed United States-Mexico-Canada Agreement (USMCA, aka “NAFTA 2.0”), it’s hard to blame you.
Texans admire plain dealing and clear rules. Trade treaties like the original North American Free Trade Agreement operate in fine print, legal niceties and obscure power centers that can govern for years before you find out the rules are rigged against you.
On the key topic of prescription drugs, the rules really are rigged against you, and if USMCA isn’t revised, it would only make matters worse. Texans know drugs cost too much. Americans are subsidizing drug company profits while much of the rest of the world pays saner prices for life-saving medicines.
Are you sick of all those TV ads that pound brand names of drugs into your head (and protect their legal flanks by admitting the many ways the drugs might harm or even kill you)? The dance is worth it to the drug companies, because brand-name biologics and specialty drugs that represent only about 2 percent of prescriptions account for nearly 40 percent of drug spending – often reaching the $100,000 a year mark for patients in serious need of specific medicines.
If you think the industry that gave us opioids feels bad about this, you probably haven’t read this far anyway.
USMCA would lock in high medicine prices by granting pharmaceutical companies a 10-year monopoly that would let them block competition from generic medicine makers and charge more in all three signatory nations. Worst yet, Congress wouldn’t be able to do a thing about it – at least until this version of USMCA fails and we get to NAFTA 3.0.
U.S. Rep. Veronica Escobar, D-El Paso, is warning the provision on “biologic medicines” harms the public and breaks a basic political promise.
“The vast majority of new members came in with a mandate to tackle the increasing pharmaceutical costs and this essentially ties their hands,” Escobar told Morning Trade. “You support USMCA and you’re immediately violating one of the more fundamental reasons why voters sent you here.”
In 2018, Texans bought 10.5 prescriptions at retail pharmacies for every man, woman and child in the state, the non-partisan organization IQVIA reports. The amount spent was approximately $10.8 billion, second only to California. Most prescriptions are of the generic variety. For Texans who must buy “profit center” drugs, however, costs can be life changing.
If you or your family need or will need high-cost drugs, you get how the monopolies created in USMCA might affect you. But even if you are lucky enough to be a healthy working person in a healthy family, you are subsidizing high drug prices indirectly through your payments into the Medicare system and through other federal, state and local taxes. You do not have to be taking medicine to be on the hook for high drug prices.
The good news is that it is not too late to fix the current USMCA text and better balance the needs of ordinary working families against the demands of giant corporations. In addition to the labor movement’s broader goal of a USMCA that provides enforceable labor standards, the Texas AFL-CIO joins the AFL-CIO in looking for “a path to yes” regarding prescription drugs under the USMCA. A better USMCA is possible, but not if Congress slams the door on improvements.
Texans should insist that USMCA drop any provision that makes outrageous drug prices even worse.
Editor’s Note: The above guest column was penned by Rick Levy, president of Texas AFL-CIO, and Montserrat Garibay, secretary-treasurer of Texas AFL-CIO. Texas AFL-CIO is a state labor federation consisting of 240,000 affiliated union members who advocate for working families in Texas.
Editor’s Note: The main image accompanying the above guest column shows Montserrat Garibay speaking at the Joint Conference on Concerns of Minorities in Denver, Colorado, on June 29, 2014. (Photo by Scott Iskowitz/ NEA Today)