What the new NAFTA means for biofuels

Between the impeachment trial and the Wuhan coronavirus, you might have missed this news: Trump signed the U.S.-Mexico-Canada Agreement (USMCA) this week, and it’s likely to benefit the American biofuels industry, says Biofuels International.

The deal: While the name isn’t quite as catchy, the U.S.-Mexico-Canada Agreement (USMCA) is meant to be a 21st-century update to the 25-year-old NAFTA, and it provides greater access to two critical markets for American agriculture and biofuels. 

The details: The agreement “provides market access and trade opportunities for U.S. biofuels and its co-products,” reports Biofuels International, since Mexico has adopted a 10% ethanol blend and Canada, already the #2 importer of U.S. ethanol, will likely import even more as some provinces move to a 15% ethanol blend.

What they’re saying: “This historic agreement between the US, Mexico and Canada is welcomed by biofuel producers across North America, as it reinforces our already strong trade relationship and opens the door for more opportunities for our allies in the agriculture industry,” said Emily Skor, CEO of Growth Energy, a biofuel trade association.

What they’re saying, part two: “You’re going to have to get bigger tractors and a helluva lot more land,” Trump said while talking about the trade deal during a campaign rally in Des Moines, Iowa. “You’ve got to have to produce a lot of product.” 

Why it matters: Tractors aside, the deal is helpful to the American biofuels industry, already hurting from the EPA’s Small Refinery Exemptions (SREs) to the Renewable Fuel Standard (RFS), which drastically cut demand and caused some suppliers to shut down, along with the trade war with China, which has now “suspended its plan to implement a nationwide gasoline blend containing 10% ethanol,” further hurting demand.

Important side note: While the agreement seems to be neutral, if not pretty good, for ag and biofuels, we’d be remiss to ignore the fact it’s a missed opportunity for American medical innovation, because negotiators removed critical IP protections for biologics.

What’s next? While all parties have signed the agreement, Canada still needs to ratify it. In the meantime, we're continuing to promote low-carbon fuel initiatives and policies to support the biofuel sector's role in American energy security and the climate challenge.


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We know drug price controls won’t lower out-of-pocket costs for patients and will only hinder investment in new cures—and we’ve called instead for holistic policies to immediately lower out-of-pocket costs for patients. So, what policies WILL help patients afford their medication? CVS Health’s new insulin program gives us some ideas.

The news: CVS Health, which owns the retail pharmacy chain as well as a pharmacy benefit manager (CVS Caremark) and insurance company (Aetna), announced they will offer insulin at no out-of-pocket cost, saving the average member around $467.24 in cold, hard cash every year.

And they say this will actually lower sponsors’ costs, too. The program will save sponsors as much as $2,202 per member per year, primarily “because better adherence improves health outcomes and therefore lowers overall medical costs.” 

In other words…When patients don’t have high out-of-pocket costs, they continue to take their medication as prescribed—and when they do that, they have fewer health complications that further drive up costs for them and the plan sponsors.

The program also recommends something else we’ve called for: point-of-sale rebates. CVS Health says these would allow insurers “to pass all, or a portion of, the rebate to members at the point of sale to help lower out-of-pocket costs,” since right now, many drug manufacturer rebates are not passed on to patients at the pharmacy counter.

The big picture: Reducing health care costs requires holistic solutions that actually address the reasons why costs continue to go up, like high-deductible insurance plans and the ever-increasing copays and coinsurance for medication. This program is an example of how we can help everyone in the health care system, especially patients, save money—without drug price controls, which will make us miss out on potentially dozens of new curesand won’t actually reduce costs for patients, either. 

Jim’s Judgment: “Every year innovative drugmakers provide tens of billions of dollars in rebates to help expand affordable access to prescription medicines. But far too often these rebates are not passed along to patients and are instead used to pad the profits of middlemen. The current system creates perverse incentives that are driving the affordability crisis many patients face today,” said BIO CEO Jim Greenwood. “We firmly believe that the rebates drugmakers provide insurers and other middlemen should be used to lower what patients pay out of pocket for prescription medicines.”

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