Why Merck MAY Be "Of Two Minds" -- About The Pending TPP "Fast Track" Measures

At the outset, let's note that a blog post (like this one!) is almost certainly not the best format, or forum, for a breezy top-level discussion of a complex, manifold international trade agreement.

But let's take a stab at it anyway, shall we? Yes, let's. We all know that Merck (like Pfizer, Lilly, GSK and AZ) makes far more from its branded pharmaceuticals and biologics, than it ever will from its "authorized" generics -- even taking into account the huge market opportunities in the BRIC nations -- India, Russia, China and Brazil -- for example. However, Kenilworth has acknowledged that some medications -- like sitagliptin in India for the 63 million diabetics there -- need to be made more affordable to the common people of India. So Merck has an arrangement with Sun Pharmaceuticals -- to make the non-branded version of Januvia^®/Janumet^® available, at a relatively modest discount.

Here is the rub, though -- others, including Glenmark and Aprica, are making non-authorized versions in India, creating havoc for Merck's branded efforts. Now, enter TPP -- a measure Merck has been staunchly supporting -- as has PhRMA -- because it will give the branded producers greater ability to knock out these unauthorized generics, and bio-similar manufacturers.

I write this morning then, to simply point out that this might come at the expense of some existing revenue streams Merck already enjoys. Those being the authorized generics, around the globe -- so, as I say, Merck may be of two minds about the fast track. And, in a bit of grandstanding here -- I do think it is fair to say that TPP is less about open trade, and more about forcing trading partners to respect patents, trade secrets -- and yes, trademarks. [That is -- of course -- why big tech is also so intently throwing money behind TPP passage, as well -- in my estimation. And that is not inappropriate, in my view -- as an end goal. I just think we should have a more candid, and open debate about the notion that TPP is more about property rights protection, than free trade.]

In any event, the below quoted bit would put real teeth into IP protection in the countries signatory to TPP -- making the TRIPS 2005 protections the law -- in all of them. This is from the leaked "IP protections" portion of the TPP bill, then:

. . . .Each Party shall notify the WTO of its acceptance of the Protocol amending the TRIPS Agreement done at Geneva on December 6, 2005.

5. Each Party shall make all reasonable efforts ratify or accede to the following agreements by the date of entry into force of the Agreement:

(a) Patent Law Treaty (2000); and

(b) Hague Agreement Concerning the International Registration of Industrial Designs (1999).

6. A Party may provide more extensive protection for, and enforcement of, intellectual property rights under its law than this Chapter requires, provided that the more extensive protection does not contravene this Chapter.

7. In respect of all categories of intellectual property covered in this Chapter, each Party shall accord to nationals*1* of the other Parties treatment no less favorable than it accords to its own nationals with regard to the protection*2* and enjoyment of such intellectual property rights and any benefits derived from such rights.

8. A Party may derogate from paragraph [7] in relation to its judicial and administrative procedures, including requiring a national of the other Party to designate an address for service of process in its territory, or to appoint an agent in its territory, provided that such derogation is:

(a) necessary to secure compliance with laws and regulations that are not inconsistent with this Chapter; and

(b) not applied in a manner that would constitute a disguised restriction on trade.

9. Paragraph [7] does not apply to procedures provided in multilateral agreements to which any Party is a party and which were concluded under the auspices of the World Intellectual Property Organization (WIPO) in relation to the acquisition or maintenance of intellectual property rights.

10. Except as it otherwise provides, including in Article __ (Berne 18/TRIPS 14.6), this Chapter gives rise to obligations in respect of all subject matter existing at the date of entry into force of this Agreement that is protected on that date in the territory of the Party where protection is claimed, or that meets or comes subsequently to meet the criteria for protection under this Chapter.

11. Except as otherwise provided in this Chapter, including Article ___ (Berne 18/TRIPS 14.6), a Party shall not be required to restore protection to subject matter that on the date of entry into force of this Agreement has fallen into the public domain in its territory.

12. This Chapter does not give rise to obligations in respect of acts that occurred before the date of entry into force of this Agreement.

13. Further to Article ___ (Publication), and with the object of making the protection and enforcement of intellectual property rights transparent, each Party shall ensure that all laws, regulations, and publicly available procedures concerning the protection or enforcement of intellectual property rights are in writing and are published,*3* or where publication is not practicable, made publicly available, in a national language in such a manner as to enable governments and right holders to become acquainted with them. . . .

Finally, I'll note that Democratic 2016 front-runner Hillary Clinton said on the campaign trail recently that she feels big pharma should have to give more -- on pricing negotiations here in the US, with Medicare and Medicaid -- in order to win these global protections, from price erosion (due to lax IP enforcement).

That will make the debate very interesting, if the back and forth on this TPP measure bleeds into 2016 -- as many smart observers now predict it will. As the New York Times noted, it also puts Mr. Obama in a tough spot -- because he is sure to push for passage, as is -- not with more give-backs by branded pharma. And yet he will want to buttress Mrs. Clinton's base -- and her base (a la Elizabeth Warren) will want to see big pharma have to negotiate on price with the government payers here.

So. . . pop the popcorn -- it will be good theater!