CAFTA's Effect on Generic Drugs in Guatemala (New Paper by Ellen Shaffer and Joe Brenner)

Mike Palmedo
August 26, 2009

Today I went to the University of California’s building in DC to see Ellen Shaffer and Joe Brenner present their new paper “A Trade Agreement’s Impact on Access to Generic Drugs.”  The paper looks at Guatemala’s experience with the TRIPS-Plus intellectual property rules required by the Central American Free Trade Agreement (CAFTA). 

Shaffer and Brenner focus on the effect of CAFTA’s data exclusivity provisions (which prevent generic firms from gaining regulatory approval based on the clinical data provided by brand name firms for a fixed period of time, usually five years).  They examined drugs for the most common and important health conditions in Guatemala.  They found that data exclusivity blocked many generic products from winning regulatory approval. In some cases, generic firms had existing products pulled off the market when data exclusivity was applied.  Prices on these products rise - often by very large percentages - when data exclusivity blocks generic competition. 

The paper brings much needed empirical evidence to an ongoing debate.  Many civil society groups, academics, and Members of Congress have argued that TRIPS-Plus intellectual property provisions will block generic competition and raise prices.   However, since the agreements are relatively recent and take time to be ratified and take effect, this is only the second empirical study of its kind.  (Oxfam previously did a similar study on Jordan after its bilateral FTA with the US.)

Shaffer and Brenner's paper in the Journal of Health Affairs is online here:
http://www.cpath.org/sitebuildercontent/sitebuilderfiles/cpathhaonline8-25-09.pdf

 

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