A political 'bomb' over drug prices could threaten NAFTA 2.0

They contend that the new pact would force Americans to pay more for prescription drugs, and their argument has dimmed the outlook for one of Trump’s signature causes.The president’s proposed replacement for the 25-year-old North American Free Trade Agreement is meant to win over Democrats by incentivizing factories to hire and expand in the United States. The revamped North America trade deal must be approved by both chambers of Congress, and Democrats have just regained control of the House.Rep. Earl Blumenauer of Oregon, the new chairman of the House Ways and Means subcommittee on trade, told The Associated Press that “I don’t think candidly that it passes out of my trade subcommittee” with the biologics provision intact.“The biologics are some of the most expensive drugs on the planet,” Blumenauer said.Still, the politics of NAFTA 2.0 are tricky for Democrats and not necessarily a sure-fire winner for them.The original NAFTA, which took effect in 1994, tore down most trade barriers separating the United States, Canada and Mexico. In fact, supporters of the biologics monopoly argue that the pact might cut prices in the United States because drug companies would no longer face pressure to charge Americans more to compensate for lower prices in Canada and Mexico.But critics say that expanding biologics’ monopoly in a trade treaty would prevent the United States from ever scaling back the duration to, say, the seven years the Obama administration once proposed.“By including 10 years in a treaty, we are locking ourselves in to a higher level of monopoly protection for drugs that are already taking in billions of dollars a year,” said Jeffrey Francer, general counsel for the Association for Accessible Medicines, which represents generic drug companies.