The Effects of the Trans-Pacific Partnership on Pharmaceutical Innovation

Concerns and potential outcomes, including diminishing access to medicines for the underserved, discussed in a commentary in Research in Social and Administrative Pharmacy

Philadelphia, PA, January 22, 2016

The Trans-Pacific Partnership (TPP) is a multi-national trade agreement now being considered by 12 countries. In an insightful commentary in Research in Social and Administrative Pharmacy (RSAP), the ramifications of major components of the agreement are discussed, especially those potentially impacting the worldwide pharmaceutical industry.

According to author Robert A. Freeman, PhD, of the Department of Pharmacy Practice and Administration at The University of Maryland Eastern Shore, Princess Anne, Maryland, USA, there are three main areas of controversy. First, pharmaceutical prices will be driven up, with especially negative effects on low-income countries. Second, there is potential for litigation for individual countries whose policies might affect the financial health of large, multi-national pharmaceutical companies. Finally, the multi-national pharmaceutical industry has an undue, protectionist influence in the negotiations, and its negotiation positions are at odds with public health.

Editor-in-Chief of RSAP, Shane P. Desselle, PhD, of Touro University California College of Pharmacy, and Applied Pharmacy Solutions, adds, “The effect on drug prices, particularly generic drugs, will diminish access to essential medications among underserved populations in developing nations.”

With regard to the pricing issue, Professor Freeman discusses the industry-wide form of price discrimination, known as Ramsey pricing, in which prices are set on the basis of a market segment’s or country’s wiliness and ability to pay. The concern is that if the agreement forces a single price for all countries party to the agreement, this price may well be lower than is economically viable for pharmaceutical companies to maintain.

The litigation question, governed by the investor-state dispute settlement (ISDS) proposal in the TPP, is formulated differently than the World Trade Organization’s normal procedures for anti-competitive practices resolution. In the TPP, legal disputes would be tried before a court of private attorneys appointed by the World Bank or United Nations. It is feared that the suits could challenge national laws that violate free market principles outlined in the agreement. The author claims that “The concern is very real; however, it may be overstated in that it is rare for a pharmaceutical company to litigate under current WTO provisions.”

Further, Professor Freeman believes that the ISDS proposal may not survive as part of the TPP due to pressure from countries like Australia and New Zealand, which maintain low drug prices as a matter of national health policy.

The United States Trade Representative (USTR) is responsible for the U.S. position on the TPP, and the third concern is that the pharmaceutical industry has been able to exert undue influence in past trade negotiations. The author relates his personal experience as an industry trade association consultant during WTO negotiations, and suggests that the priorities of the USTR are constantly changing, and different industries find themselves in- and out-of-favor at different times.

Although trade policies are often ignored when studying pricing, national financing schemes and comparative health systems, the author suggests that the TPP could affect drug counterfeiting activities, could imperil Australia’s and New Zealand’s national drug policies, and might significantly affect the profitability of the biologic drug industry.

Professor Freeman concludes with a caution. “While impact of the TPP on public health status in the member states is a valid public policy concern, it should be noted that trade agreements such as the TPP are not concerned with these outcomes, and that it is unrealistic to expect they will be an overriding consideration in the final agreement.”


Notes for Editors
“The Trans-Pacific Partnership and Pharmaceutical Innovation,” Robert Freeman, PhD (DOI:, published online in advance of Volume 12, Issue 4 of Research in Social & Administrative Pharmacology, published by Elsevier.

Full text of the article is available to journalists upon request. To obtain copies contact Chris Baumle at +1 215 239 3731 or Journalists wishing to set up interviews with the author should contact Robert Freeman at

About Research in Social & Administrative Pharmacy (RSAP)
RSAP features original scientific reports and comprehensive review articles in the social and administrative pharmaceutical sciences. Guided by Editor-in-Chief Shane P. Desselle, RPh, PhD, FAPhA, and an eminent international editorial board, RSAP has become a widely recognized venue for publishing articles that proffer new models to guide existing research, make methodological arguments, or otherwise describe the results of rigorous theory-building research. Topics of interest include outcomes evaluation of products, programs, or services; pharmacoepidemiology; medication adherence; direct-to-consumer advertising of prescription medications; disease state management; health systems reform; drug marketing; medication distribution systems such as e-prescribing; web-based pharmaceutical/medical services; drug commerce and re-importation; and health professions workforce issues.

About Elsevier
Elsevier is a world-leading provider of information solutions that enhance the performance of science, health, and technology professionals, empowering them to make better decisions, deliver better care, and sometimes make groundbreaking discoveries that advance the boundaries of knowledge and human progress. Elsevier provides web-based, digital solutions — among them ScienceDirect, Scopus, Research Intelligence and ClinicalKey— and publishes over 2,500 journals, including The Lancet and Cell, and more than 35,000 book titles, including a number of iconic reference works. Elsevier is part of RELX Group, a world-leading provider of information and analytics for professional and business customers across industries.

Media contact
Chris Baumle
Executive Publisher
+1 215 239 3731