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Blame US Trade Policy for Sky-High Drug Prices

Skyrocketing drug prices were a major issue in the 2016 US presidential campaign, and the Trump administration has since announced measures to bring them down. Why, then, is the administration also pushing for intellectual-property rules that give pharmaceutical giants even more price-gouging power?

NEW DELHI – Sharp price increases for essential and life-saving medicines have generated a political backlash against the pharmaceutical industry in the United States. In February, the US Senate Committee on Finance scolded industry representatives for pursuing policies that are “morally repugnant.” Since then, 44 US state governments have filed a lawsuit against Israel-based Teva Pharmaceuticals and 19 other companies, alleging conspiracy to stifle competition for generic drugs and illegal profiteering from over 100 different medicines.

For its part, US President Donald Trump’s administration has also announced that it will pursue measures to reduce the prices of drugs, especially those needed to treat America’s opioid epidemic. Yet the administration is also trying to export intellectual-property rules that are known to be associated with massive price increases abroad, making basic medicines unaffordable to millions of poor people in developing countries.

The US government has brought sustained pressure to bear to block IP rules that would allow manufacturers in other countries to produce and export less expensive generic drugs. The US Trade Representative’s (USTR) annual “Special 301” watchlist, which identifies countries with “serious intellectual property deficiencies,” regularly includes India, mainly because the US objects to some features of its patent laws. In fact, Trump even cited India’s IP regime as a justification for his recent decision to suspend Generalized System of Preferences (GSP) tariff exemptions on certain Indian exports.