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October 2, 2018

The Rx drug provisions in the big new US-Mexico-Canada trade deal

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    President Trump on Monday announced that Canada has agreed to join Mexico and the United States in an agreement on a renegotiated North American Free Trade Agreement (NAFTA) that would offer a 10-year data exclusivity period for biologic drugs.

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    About biologics exclusivity

    Drugmakers currently receive 12 years of data exclusivity in the United States for biologic drugs, and the biologics industry for years has advocated to keep that exclusivity period intact. The Biotechnology Innovation Organization (BIO) in comments to the Office of United States Trade Representative (USTR) said, "This remains one of BIO's top objectives in any future trade agreement."

    In contrast, drugmakers receive eight years of exclusivity in Canada for biologic drugs. In Mexico, drugmakers receive five years of data exclusivity for their products, but Mexico's regulations do not explicitly state whether the five-year data exclusivity period applies to biologic drugs.

    Inside the trade agreement

    The new agreement between Canada, Mexico, and the United States would update NAFTA for the first time in 24 years. The White House said the new agreement, which would be called the United States–Mexico–Canada Agreement, would "bring [U.S.] trade relationship with Canada and Mexico into the 21st century."

    The new trade agreement includes a provision that would offer 10 years of data exclusivity for biologics in Canada, Mexico, and the United States. While the agreement would increase data exclusivity for such drugs in Canada and Mexico, it would lower the United States' current 12-year exclusivity period. USTR said the agreement also would expand the scope of products eligible for the data exclusivity period.

    According to Roll Call, the agreement is subject to Congress' approval.


    An unnamed former senior GOP official who was involved in trade negotiations under former President Barack Obama and Trump told Axios that the trade deal likely would "add cost to" Canada's and Mexico's health systems, "especially in Canada." However, the official said the deal will result in the development of new medical treatments "without the United States being the piggy bank for all those research and development dollars." The official said the cost of developing biologic drugs under the new agreement will be spread across the Canadian, Mexican, and U.S. markets and could bring down U.S. drug prices as drugmakers generate higher profits from the Canadian and Mexican markets.

    Meanwhile, critics of the trade agreement have said it will lead to increased health care costs because it will further delay the entry of generic versions of biologics, called biosimilars, in Canada and Mexico.

    When the deal was first floated in August, Jeff Francer, general counsel for the Association for Accessible Medicines, said, "We feel this [the trade agreement is] bad news for patients who are seeking more affordable biologics. It would delay biosimilar competition" (Tankersley, New York Times, 10/1; Bennett, Roll Call, 10/1; Baker, "Vitals," Axios, 10/2; Blackwell, Financial Post, 10/1).

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