Trump's TPP withdrawal a boon for Asian biosimilar makers?
Trump, TPP and America First threaten US biomanufacturing jobs, says expert
A week in, the new US President has launched his ‘America First’ strategy and begun dismantling a host of his predecessor’s policies, including withdrawing from the TPP.
The deal was first proposed by President Obama in 2009 to eliminate a number of trade barriers between the US and 11 Asian-Pacific countries, and had included an agreement to provide effective market protection through five to eight years of data protection for reference biologics.
While industry groups including BIO and PhRMA had opposed this (arguing for up to 12 years of data exclusivity), Trump’s withdrawal is unlikely to benefit the US drug industry, according to Kevin Noonan, a partner with McDonnell Boehnen Hulbert & Berghoff LLP and an experienced biotechnology patent lawyer.
“The pharma and biotech industries were particular beneficiaries of the TPP, wherein the Pacific Rim countries agreed to mandatory minimum exclusivity terms for conventional and biologic drugs which would prevent generic substitution for fixed times, giving US drug companies a higher degree of certainty than has been available from patent protection in these countries,” he told Biopharma-Reporter.com.
Boon for Samsung Bioepis and Celltrion?
Trump’ U-turn, therefore, will lead to one of two possible options:
“The first is that the remaining countries may still ratify the treaty and in that case the benefits to biopharma companies in those countries would still accrue,” he said.
“The second is status quo, where there is no market exclusivity for biologic drugs in many of these countries and accordingly US biopharma companies will need to rely on patent protection and enforcement country by country; this is a much more expensive proposition.”
If the second, “biosimilar competition will be immediate, or as soon as possible rather than being delayed eight years,” he argued and would be a boon to Asian biosimilar developers such as Samsung Bioepis and Celltrion which enter biosimilar market as soon as the relevant development pathways allow.
A third, less-likely, outcome could be the entrance of China in the TPP. “If that happens it will be the Chinese and not the Americans that will be the dominant power among TPP countries,” said Noonan, adding this is unlikely to be beneficial for the US.
US job threat
But despite continual promises to ‘make America great again,’ Trump’s withdrawal from TPP may threaten US biomanufacturing jobs if the TPP is ratified in the remaining countries.
“It may behove US biologic drug companies to partner with or resource their biologic drug production to an affiliate in a TPP country in order to reap the benefits under the treaty of market exclusivity for 8 years,” said Noonan.
“This will not improve prospects for jobs in the US or bring jobs home; indeed, it will reduce the need to produce in the US these drugs for sale in the TPP countries.”
The TPP withdrawal is likely to be the first of a number of Trump-era trade deal pull-outs, with Noonan believeing the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TiSA) could also be under threat.
“You cannot have an international trade agreement based on an ‘America First’ policy, and I can’t believe other countries would agree to the kind of one-sided agreement this would require,” he said.
“It’s like President Bush’s ‘Coalition of the Willing’ during the Iraq War: only those countries dependent on the US would agree to be involved.”