A New Trade Agreement on Pharmaceutical Pricing and Reimbursement?

Evidence-based drug pricing strategies employed by health officials in other countries have come under attack from US trade officials acting on behalf of the branded pharmaceutical industry. Trade policy now seeks to influence formulary listing decisions based on the comparison of new medicines to existing ones. The federal government's goals include implementing rules that favor patented products over generic ones, and that give industry greater input in listing decisions. Trade officials have used Free Trade Agreement negotiations and less formal bilateral consultations to advance these goals. Last year, Pfizer proposed a multilateral trade agreement among developed countries to ‘set disciplines' on ‘pricing and reimbursement policies.' Such a trade agreement could harm programs that serve the poor in the United States and use the same type of evidence based pricing strategies to negotiate discounts. State leaders fear this drive to set international norms for evidence-based drug pricing that favor the branded drug industry will undermine the ability to negotiate discounts for Medicaid – which serves 58 million low income Americans.