USMCA Trade Agreement Includes Minimum 10-Year Data Exclusivity for Biologics

On October 1, the Trump administration announced that it had secured a new trade agreement with Canada and Mexico.  The United States-Mexico-Canada Agreement (USMCA) would replace the North American Free Trade Agreement (NAFTA), which has been in place since 1994.  According to the White House press release, “[t]he new agreement includes a modernized, high-standard chapter that provides strong protection and enforcement of intellectual property rights.  This includes 10 years of data protection for biologic drugs and a large scope of products eligible for protection.”

Chapter 20 of the USMCA is directed to Intellectual Property Rights.  As set forth in Article 20.F.14, “[w]ith regard to protecting new biologics, a Party shall, with respect to the first marketing approval in a Party of a new pharmaceutical product that is or contains a biologic, provide effective market protection through the implementation of Article 20.F.13.1 (Protection of Undisclosed Test or Other Data) and Article 20.F.13.3 (Protection of Undisclosed Test or Other Data), mutatis mutandis [once the necessary changes have been made], for a period of at least ten years from the date of first marketing approval of the product in that Party.”   The 10-year data exclusivity is to apply to “at a minimum, a product that is produce using biotechnology processes and that is, or, alternatively, contains, a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein, or analogous product, for use in human beings for the prevention, treatment, or cure of a disease or condition.”  A link to the full text of the agreement is located here.

In the United States, the BPCIA already provides for 12 years of data exclusivity for new biologics, exceeding the minimum 10 years under the USMCA.  In Mexico and Canada, however, new biologics receive just five and eight years of data exclusivity, respectively.

The USMCA has already drawn criticism.  According to a statement by the Canadian Generic Pharmaceutical Association (CGPA), the “pharmaceutical provisions in USMCA will delay access to competition from biosimilar biologic drugs in Canada, extending the period of market exclusivity for these products to 10 years from the current period of 8 years. Biologic medicines represent the fastest growing cost segment of health-care spending, and these delays will be costly to patients, businesses that sponsor employee drug plans, private payers and our industry.”  Similarly, the Association for Accessible Medicines stated that it is “extremely concerned that the proposed US-Mexico-Canada trade agreement will provide a windfall for brand-name drug manufacturers and raise prescription drug prices for patients in the United States.”  On the other hand, the Biotechnology Innovation Organization (BIO) supports the USMCA as “an important step in bringing Mexico and Canada closer to high U.S. standards that have made [the United States] the world leader in biotechnology innovation.”

The USMCA is still subject to a majority vote in both the Senate and House of Representatives.  According to Senator Cornyn (R-Tx), the earliest the U.S. Senate would vote on the trade deal is in early November.

 

 

 

 

 

 

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