Why TPP Counts

The aim of data exclusivity is to give pharmaceutical companies exclusive control over test data that they have used to persuade regulators of the safety of particular drugs.

This is insane. For one thing, how can independent scientists in various countries (assuming there are such creatures left) verify that the drugs are safe if they can’t replicate the pharmaceutical companies’ studies, and how can they do the replication if they don’t have access to the test data? On a somewhat related point, in a recent conversation w a friend who knows something about this I was told that even a reputable journal — the New England Journal of Medicine — has published a study claiming that “drug X reduces morbidity and mortality” (that’s the title of the piece) when a close analysis of the data contained in the article shows in fact that the drug does nothing to reduce mortality (the authors get away w the misleading title b.c they have an aggregate measure called “morbidity and mortality” which misleadingly lumps everything together). Of course the research was financed by the pharmaceutical company that makes the drug in question.

Pharmaceutical companies, wrapping themselves in the mantle of “IP protection,” exercise, I’m sure, an undue influence on US govt positions in so-called trade negotiations, as G. Michael’s work suggests. The overemphasis on IP goes back at least to the TRIPs (so-called ‘trade-related aspects of intellectual property’) portion of the original WTO agreement. The US was a or the main backer of TRIPs and has spent the intervening years continually screaming about IP piracy by China, claiming that the US movie/music/publishing industries have lost millions — or is it billions? — of dollars b.c kids are selling ripoff DVDs on the streets of Chinese and Indian cities. This issue has become one of the main drivers of US policy in (so-called) trade liberalization talks.

Piracy is undesirable to the extent that it actually harms a writer, composer or other creator; but I can’t get too worked up about the profit margins of, e.g., 20th Century Fox, Warner Bros, etc. (I’m sure this may get pushback here but my time today for this thread is highly limited, unfortunately.)

The aim of data exclusivity is to give pharmaceutical companies exclusive control over test data that they have used to persuade regulators of the safety of particular drugs. This in turn makes it much easier for them to keep on fending off competition from manufacturers of generic drugs in countries with different approaches to patents.

I’m afraid I don’t follow the train of thought here. As I understand medic(in)al patenting, the FDA sets really low standards for approval, while the ‘bar’ works in such a way that as soon as some number of confirmatory studies have been published, a. the fact that other studies disconfirm the results/don’t show the results is ignored as counterevidence, b. most nonsignificant results are never published anyway, even with the FDA, either because of corporate pressure, self-censorship by the scientists ‘who can’t do research without corporate funding’ (which really is an issue), or journal disinterest in publishing null results, and c. the FDA does not make any mention of the fact that (only) x/y studies were significant. Now, supposedly this keeping secret happens because of IP/trade secrets considerations, but I’ve never understood how or why; all I know is that it forms an immense boon to pharmaceutical companies, because there is no way to nuance the FDA approval. All of this seems — very obviously — in the private interest, but not so much in the public, which I’m sure is what you were referring to when you said you could not think of obvious benefits, Henry.
In any case, would anyone happen to know what the prima facie reasons the FDA itself gives for keeping the results secret, apart from the ubiquitous “trade secrets” argument that they so conveniently buy?

Glad to see this, especially since Krugman’s overly modest view of his own mandate often seems to direct him away from saying anything meaningful about crucial issues. People may be ambivalent for all sorts of reasons about the erosion of the nation state’s prerogatives in favor of globalized economic interests, but like it or not, that seems to be where much of the real action is. Democratic deficit, what a deliciously insidious euphemism — by comparison, full-spectrum dominance seems almost embarrassingly frank. If you aren’t already lining up to pay, it’s only because your bank’s already got your signature on its automatic deduction plan….

@9 Shouldn’t he be plenty versed in the effects of artificial monopolies (IP), creating/extending the right for corporations to sue states for loss of “potential future profits”, etc? What is his excuse?

Agree with Barry.
K isn’t the best out there, but restricting to people with solid establishment credentials, he was great on the invasion of Iraq, a service which was off immense value.

Henry @4 —
I was going to mention yr colleague Susan Sell whose work I’m aware of but no, have not read.
IP is actually quite tangential to my ac. interests (such as they are — I have no research agenda and since I have no academic job I don’t have to have one) but in a previous existence (so to speak) I was forced to have some acquaintance w IP etc.

As with any policy initiative its purpose is explained differently by different people – a variation of the “where you sit is where you stand” argument. Notwithstanding that there are those officials who see trade liberalization as an unmitigated good that should be pursued for its own sake and the vested interests who see an opportunity to revisit issues omitted in existing free trade deals- recall that many of the parties to TPP negotiations already have FTAs e.g NAFTA- there is surely a strategic (read: military) objective complimenting these negotiations. For the Americans this is merely another means of increasing and deepening it’s interaction with states in the Pacific presumably bringing them closer in alignment with American policy preferences. If the US has had any longstanding interests in the region going back to when Perry opened trade to Japan it’s maintain access to the Pacific market for US exports. Another point is to watch how governments use trade negotiations to achieve domestic political reforms that they don’t feel they can achieve otherwise. The Canadian government is looking for ways to dismantle albeit gradually our country’s supply management system in the dairy industry. The first blow was struck in the recently completed FTA with the EU and presumably they will take the next step during the TPP negotiations.

Krugman is generally not very useful when he strays outside the domain of macroeconomics into politics and broader policy issues.

If anything it’s the other way round. Krugman’s instincts on politics and policy are generally good. But he can be surprisingly conservative on questions close to his professional work, like this one.

Data exclusivity allows them to utterly falsify their tests, something that pharmaceutical companies have already been caught doing. Essentially it defangs the FDA.

But don’t worry the invisible hand of the marketplace will deal with worthless, toxic drugs, just as it did in the 1890’s!

But he can be surprisingly conservative on questions close to his professional work

Or when he’s carrying water for the Obama Administration, J.W.
~

Just to introduce a very mildly contrarian perspective here: There certainly are some cases, particularly in high tech, but also in some other areas like food production where blatant copying is hurting incentives for research. At least some of this is down to “trade secret” practices (especially on the “low-tech” end), which naturally enough doesn’t get protected in the same way as most IP law. Some companies have better cases to make than others – what helps some companies might be blatantly abused in others.

But I do agree there’s a desperate scrambling after the last crumbs here, along with a heft spoonful of gritty filler to block up the guts of democracy.

@19 – Thanks, my mind was aboggle that no one had yet mentioned the most egregious offense of the TPP: the investor-state dispute settlement clause under which corporations or interested parties can effectively overturn a nation/state/county/city law in an international court if said law limits their anticipated profits.

Leaked documents show that U.S. trade negotiators are pushing hard for the TPP to include so – called “investor – state” provisions that would grant transnational corporations the power to challenge virtually any environmental law, regulation or court decision that negatively affects their expectation of profits as a “regulatory taking” through international tribunals that circumvent domestic judicial systems. Consumer safety rules, banking regulations and a host of other public interest policies would also be subject to attack.
Within the World Trade Organization (WTO), portions of the Clean Air Act, endangered Species Act and Marine Mammal Protection Act have already been successfully rolled back under similar “trade” provisions that grant this type of power to foreign governments. The TPP would go beyond the WTO by giving individual corporations the power to challenge democratic policymaking through a tribunal system that takes precedent over domestic courts and legislatures. (Meanwhile, of course, these tribunals remain completely inaccessible and unaccountable to local businesses and ordinary citizens.)
Right now a number of smaller Free Trade Agreements and Bilateral Investment Treaties already grant corporations these special rights in certain countries — and those so – called “rights” are being used by transnational corporations to attack clean air rules in Peru, anti – mining laws in El Salvador and a court decision against the oil giant Chevron in Ecuador, among many other cases. That said, corporations have thus far primarily (although not exclusively) use “investor – state” to attack the laws, regulations and court decisions of developing countries. By extending this system throughout the Pacific Rim, the TPP would not only put the environmental protections of additional developing countries at risk, but could also extend these powers to corporations based in capital – exporting nations such as Japan, increasing the likelihood that more federal and state – based environmental rules will be challenged in the United States.

Citizens Trade Campaign – The TPP & the Environment (pdf)

@26

How effective will such an international court be? There is a potential that it may be treated as many other international courts are i.e. ignored whenever an adverse finding is made or acknowledged that they are wrong at the international level but do nothing to remedy this domestically.

@27

If an ordinary citizen of their country has their property seized by a government, they have the option of going to a domestic court and seeking compensation. These courts are impartial (insofar as you can call any court ‘impartial’). Why should this not suffice for a foreign investor?

no serious students of economic history believe free trade is good……

the history of economic development for the last millenia is basically a story of mercantilists crushing free trade economies.

the original mercantilists were the English (especially post 1689) and the ‘little Englands’ overseas: the US, Canada, New Zealand and Australia….

no county has ***ever**** developed but through a mix of protectionism and mercantilism that fostered import substitution industrialization. not in at least a thousand years and yet Western economic discourse now believes “free trade” is an unalloyed positive….. wtf?!?!?

to his credit, Krugman follows up:
http://krugman.blogs.nytimes.com/2013/12/14/tpp-and-ip-a-brief-note/
(I do think this is an uncharacteristic miss for Krugman. This argument had been out in the mainstream left for a good while – and as he rightly says, was the dominant theme of CAFTA protests as well)

indiana guy @30

1) Many of the issues raised by the OP and comments have to do w the fact that many aspects of the TPP and other similar agreements are not really about trade at all. (As the OP notes, conventional tariff barriers are already quite low.) Hence your comment about the merits of free trade vs mercantilism/protectionism/ISI is somewhat not to the point.

2) Actually lots of students of ec. history believe in the theory of comparative advantage and think “free trade is good,” though it wd be tedious to document this.

3) Re your statement the original mercantilists were the English (especially post 1689):
The Spanish empire under e.g. Philip II was mercantilist. So was Louis XIV’s France. (Glance at the opening of the Wikipedia article “mercantilism”.)
British policy as the 19th cent. wore on turned to free trade in the lower-tariff-barriers sense; one item: the Cobden-Chevalier treaty. And the British practiced a version of free trade within the boundaries of the empire (in the 20th cent.: “imperial preference” in the early 30s). I imagine Gallagher and Robinson’s famous article “The Imperialism of Free Trade” is still worth reading, despite its age and (no doubt) the various subsequent historiographical controversies.

For some complications etc, see eg Hobsbawm, Age of Empire ch 2, and H. Lacher & J. Germann, “Before Hegemony: Britain, Free Trade, and Nineteenth-Century World Order Revisited,” Intl Studies Review, March 2012.

@ Greg,

The TPP is far from irrelevant in the medium term, though I agree with you in the long term. I’ve believed for the last 20 years that we are headed for a terminal collapse that would end things for the super rich, and I thought 2008 was it, but the 18 trillion dollar rescue package created on a keyboard and monthly QE since then sadly proved me wrong.

I had a look at your blog, but the bright yellow background and hot pink links was off-putting. A more serious looking theme might enhance your content a little.

sorry for the formatting error…

gluelicker @39:
No one here has yet surmised that the TPP is by and large a geo-economic arrangement, to accompany the US’ “Asian pivot” geopolitical strategy?

actually Vladimir @16 had said something along similar lines:
there is surely a strategic (read: military) objective complementing these negotiations etc.