Free trade agreements play a dangerous game with public health

Public health could be sacrificed in large trade pacts that are discussed in secrecy.

Public health could be sacrificed in large trade pacts that are discussed in secrecy. In the image, an ancient world map

Clinicians don’t often get caught up in issues related to trade negotiations. Surely, these matters should be left to governments, economists, lawyers and corporations, those who know best.

The largest ever free trade agreement (FTA) is set to transform the legal frameworks that govern trade and regulations between the United States and countries that line the Pacific Rim, with significant consequences for public health.

The Trans-Pacific Partnership — or the TPP — will impact some 800 million people living in the area and affect nearly 40% of global trade. The deal is part of Barack Obama’s push against the economic competition from China in the region and will consist of 11 other parties: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. And it is working its way through US Congress.

There is a fear that the new deal will undermine existing pacts agreed by the World Trade Organisation (WTO) by strengthening intellectual property (IP) rules. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (also known as TRIPS) was negotiated in the 1986–1994 Uruguay Round, and introduced IP rules into the multilateral trading system for the first time. The TRIPS agreement includes minimum standards for IP, already considered too high for some developing countries struggling to implement them. It has also enabled poorer countries to issue compulsory licences that allow cheaper medicines to be produced in the public interest.

The TPP deal would protect data exclusivity and ease patent ever-greening, thereby blocking competition from generic medicine manufacturers and potentially driving up the price of essential medicines for millions of people. This will also have wider impact if other — usually poor – countries in the Pacific Rim region join the TPP in future years. Worryingly, the TPP is also being set up as a model for other free trade agreements, critics, such as Médecins Sans Frontières, say. There is a huge risk that the WTO will become irrelevant.

From the first round of negotiations of the TPP in Melbourne in 2010, talks have been conducted behind closed doors, with what little information that has become available leaked to the public. Over 2013–2015, the whistleblowing website Wikileaks has published TPP chapters on IP, investment and health, revealing some of the controversial and wide-ranging ramifications for medicines and biological patents. 

Perhaps the most troubling aspect of TPP is the “investor-state dispute settlement” provision. ISDS, as it is known, opens the door for corporations to potentially challenge public health policies by bringing governments before an arbitral tribunal, an independent system separate from conventional courts for hundreds of millions of pounds in damages if they believe future profits will be harmed.

Democratic deficit

If we give companies ISDS, they will use it. History has shown us that multinational corporations, including pharmaceutical companies, do not shy away from litigation. US tobacco giant Philip Morris is suing the Australian government over its plain packaging laws through an FTA the country has with Hong Kong. Meanwhile pharmaceutical firm Eli Lilly is using the rules of another FTA — the North American Free Trade Agreement — to sue Canada for US$500m in damages in an ongoing patent dispute.

Companies could challenge policies to do with reimbursement, pricing or regulatory matters, with inherent risks to public health. It also opens the doors for other industries, for example, food companies could object to any profit-killing anti-obesity campaigns/regulations and the alcohol sector could protest to any proposed stricter labelling rules.

There is also the chilling effect of potential ISDS cases: some developing countries may be inhibited from advancing important public health policies for fear of litigation by corporations because these cases are a hassle and are costly. The threat alone from ISDS procedures would be detrimental.

The pharmaceutical industry is campaigning for prioritisation of intellectual property as it is the lifeblood of innovation. Fair point, but any patent provisions need to be balanced with the need for medicine access across all economic settings. What we need is a trade agenda that enables a return on investment in research and development and protects the needs of patients.

The TPP public debate is based on leaked texts and not informed debate. It is not possible to hold honest public discussion when political representatives withhold vital details from their constituents. It is only after a deal is done that the full measures are unveiled — but it’s then too late. Considering how far-reaching these agreements can be, it is important to involve wider stakeholders. It has been a flawed process. Trade and its effects on public health should be talked about in the open.

Last updated
The Pharmaceutical Journal, PJ, 27 June/4 July 2015, Vol 294, No 7868/9;294(7868):DOI:10.1211/PJ.2015.20068826

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