Good Day BIO: USTR's meeting with Mexico on biotech crops

The U.S.-Mexico-Canada Agreement (USMCA) has officially been in effect for one year—but we’re not throwing a party yet. We explain why Mexico’s policy towards biotech crops is concerning, and what USTR’s doing about it. 

While you were beaching…July 1 was the one-year anniversary of the U.S.-Mexico-Canada Agreement (USMCA), and U.S. Trade Rep. Ambassador Katherine Tai met with Mexican government officials last week to discuss its policy towards biotech crops, Progressive Farmer reported. 

USMCA was meant to be the gold standard free trade agreement for agricultural biotechnology but a year into the agreement we are far from that goal. USMCA was intended to bring the three countries closer on agricultural biotechnology, paving the way towards increased coordination for current and future innovations.

However, Mexico’s food and drug regulator has not approved a new biotech trait since May 2018, and in December, Mexico's president issued a decree stating the intention to phase out GMO corn for human consumption by 2024 and refrain from future biotech approvals. 

More Background: Unpacking Mexico’s economic and environmental paradox  

Ambassador Tai “emphasized the importance of Mexico immediately resuming the authorization of biotechnology products and inquired about the status of expanding access for U.S. fresh potatoes throughout Mexico,” according to USTR’s readout of the meeting. “They also discussed the potential mutual benefits of aligning Mexico and the United States’ policy on ethanol gasoline blends.”

Agriculture’s not the only problem with USMCA,we’ve noted. As negotiated, USMCA contained strong IP protections for biologics—but these were stripped out during the congressional ratification process, weaking protections not only in Mexico and Canada, but also worldwide. 

BIO’s take: “Mexico has not issued a new biotech approval in over three years and, if this continues, farmers won’t have access to these tools,” Matt O’Mara, BIO’s VP of International Affairs, told Agri-Pulse. “BIO looks forward to working with the administration to support efforts that resolve this issue in a timely manner, including USMCA enforcement as necessary.”

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The Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights held a hearing yesterday, A Prescription for Change: Cracking Down on Anticompetitive Conduct in Prescription Drug Markets. While some Senators and witnesses repeated the myth that strong IP rights reduce innovation and competition, there was ample testimony explaining how the U.S. IP system and free markets have allowed the U.S. biotech sector to lead the world. 

“Patents may facilitate the efficient and innovation-enhancing distribution of new technologies,”former Federal Trade Commission General Counsel Alden Abbott testified—“and may act as beacons to attract investments in R&D that help generate dynamic efficiencies through the creation of new products and services.”  

“The effective patent life for small molecule medicines is about 12 years, meaning brand medicines typically face generic competition at between 12 and 13 years after brand launch even though the basic patent term is 20 years,” explained Geoffrey Levitt, testifying for Pharmaceutical Research and Manufacturers of America (PhRMA). 

As a result of robust competition from generics and biosimilars, as well as brand competition, “net per capita spending on prescription medicines has remained relatively flat, increasing just 0.5% on average per year over the past 10 years," Levitt continued.

Committee Members including Ranking Member Mike Lee (R-UT) also focused on the market distortion in pricing caused by Pharmacy Benefit Managers and other middlemen. These entities—which dominate the market—negotiate substantial rebates and discounts from manufacturers. As a result, net prices for brand medicines are, on average, 44% lower than the list price. Unfortunately, these discounts are not passed along to consumers.

The next steps: Congress will continue to consider how to ensure pharmaceutical markets remain competitive and maximize consumer access to new treatments. Policymakers will need to understand the dynamics of this market and the importance of IP rights. Above all, we cannot afford to sacrifice U.S. global dominance in this important industry.

More Health Care News:

The Atlantic: What counts as a COVID-19 breakthrough case?
“The overwhelming majority of the COVID-19 cases we’re seeing are among the unvaccinated. And when the virus does affect the immunized, it seems to accumulate to lower levels, and spread less enthusiastically to new hosts; it’s causing, on average, milder and more transient symptoms.”

President Biden’s Wednesday: Meeting with bipartisan governors and mayors at 3 PM ET to discuss infrastructure. Singer Olivia Rodrigo will join President Biden and Dr. Facui at the White House today to help boost vaccine confidence in young people. 

What’s Happening on Capitol Hill: The House Science Committee will hold a hearing, Principles for Outbreak Investigation: COVID-19 and Future Infectious Diseases (12 PM ET) with several infectious disease experts (though notably, no Biden administration public health officials). Meanwhile, bipartisan infrastructure talks continue, though POLITICO says Republican support is “wobbly.”