November 15, 2013—Drug-pricing provisions reportedly being advanced by U.S. negotiators for a proposed multilateral trade treaty could subject 340B drug discounts “to challenge by manufacturers,” a coalition of health, consumer, labor, and retiree groups says in a recent letter to President Obama.[ms-protect-content id=”2799″]
In their Nov. 8 letter, the 15 organizations express “deep concern” that reported U.S. proposals for the Trans-Pacific Partnership (TPP) would “limit the ability of states and the federal government to moderate escalating prescription drug, biologic drug, and medical device costs in public programs.” The groups include AARP, Consumers Union, and the National Association of Counties.
In addition to undermining 340B, the public-interest groups said, the reported U.S. position on drug pricing in the talks could undercut Medicare Part D “donut hole” drug discounts; potential rebates on Part D drugs for low-income beneficiaries; and states’ use of formularies and preferred drug lists to rein in Medicaid drug spending. Based on what was agreed to in other recent bilateral trade pacts, it is widely expected that Medicaid drug rebates would be “carved out” of TPP.
The groups’ concerns center on language that U.S. negotiators reportedly are seeking that pertains to setting drug reimbursement amounts under health care programs operated by central governments. Key terms such as “reimbursement,” “programs,” and “central” might not be clearly defined, and some worry that our trading partners could seize on the language to challenge U.S. drug rebates, drug discounts, and other cost control mechanisms. Others worry that drug manufacturers might argue that the trade deal absolves them of U.S. drug rebate and discount requirements.
The 15 groups that signed the letter did not include any 340B provider organizations. In October 2011, the association representing hospitals in the 340B program sent the Office of the U.S. Trade Representative (USTR) a letter stating that, if TTP’s pharmaceutical reimbursement language mirrors that in the U.S.-Korea Free Trade Agreement (Korus FTA) approved by both nations late that year, there probably would be no negative implications for the 340B program.
But “due to certain ambiguities in the terms used in the Korus FTA,” the group, Safety Net Hospitals for Pharmaceutical Access, requested “that the text for the TPP clarify the nature and scope of the health care programs that are covered by any pharmaceutical provisions.” [/ms-protect-content]