Ladies and Gentleman, I’m here today to sound the alarm on something deceitful that’s taking place in Congress. It involves the Trans-Pacific Partnership (TPP) trade agreement, backdoor efforts to change the outcome of this year’s potential lame duck ratification vote, and Sen. John McCain (R-AZ).
[Crista Huff| July 6, 2016 | Good Fellow]
Did you just cringe when I said “McCain”? So did I. When I read about Sen. McCain’s involvement in the situation that I’m about to lay out before you, I knew immediately that something distasteful was afoot.
Caveat: I was an RNC delegate in 2008, when McCain was the Republican POTUS nominee. To this day, I remain angry and ashamed that he was the nominee, and that he refused to go after any of Sen. Obama’s obvious flaws during the POTUS debates.
Please allow me to give a brief tutorial on a major TPP problem, and the creative approach that Sen. McCain and his allies have adopted to fix this obstacle to its passage.
There are a multitude of objectionable facets to the Trans-Pacific Partnership (TPP) trade agreement, ranging from concerns about sovereignty, currency manipulation and trade deficits, to concerns about the environment and food safety. In recent months, the following global heads of state have announced that they’re not willing to reopen TPP negotiations — a decision that would require unanimous consent:
Australian Ambassador Joe Hockey
Canadian Prime Minister Justin Trudeau
Mexican Secretary of Economy Ildefonso Guajardo
New Zealand Prime Minister John Key
Peruvian Minister for Foreign Trade and Tourism Magali Silva
Several countries, including Japan, have long since sent the TPP to their legislatures for ratification. This tiger will not be changing its stripes.
The Pharmaceutical Problem in the TPP
The most-often cited reason for not reopening negotiations is that a variety of the countries got an excellent deal on their future pharmaceutical costs, to the U.S.’ disadvantage, and they’re laughing all the way to the bank.
U.S. pharmaceutical companies are not amused. In fact, they’re furious. That’s because U.S. law gives Big Pharma twelve years of patent exclusivity on their drug innovations — a right which I believe they earned, by fronting the money for the many years of research and development that go into each newly successful and failed drug — but the TPP only gives those same companies between five and eight years of biologic patent exclusivity.
Folks, there’s a basic math equation in that previous paragraph. If you keep costs the same, but you lower revenue, profits will shrink, and possibly disappear. (Revenue – Costs = Profit or Loss) There is no point in producing a drug for which a company does not earn profit.
I know that liberals love to decry profits as somehow being the metaphorical equivalent of child molesters, but profit simply means that a company did not lose money by producing the drug, and can thereby remain in business and continue to employ people.
To be clear, here’s a comparative example. If a school teacher or a factory foreman or a firefighter were earning $45,000 per year, and the U.S. government signed a trade agreement that changed their salary to $25,000 per year, the employee would be thrown into a financial tailspin. They’d immediately begin living off their meager savings, while contemplating other ways to cut costs or increase income: hosting garage sales, seeking second jobs, moving in with their parents, or leaving their professions altogether. That’s what happens when the cost doesn’t change, but the revenue falls dramatically. These folks still have their housing, autos, kids & college loans to pay for, just as Big Pharma still needs revenue to cover the cost of operating their companies, including their manufacturing facilities, employees’ salaries & benefits, and advertising.
(I’m sorry that I sound didactic, but it is no more appropriate to legislate a company’s revenue than it is to legislate a person’s salary.)
Clearly, Big Pharma in the U.S. cannot contemplate a potential 50% decrease in revenue without drastically changing their companies’ operations. So the first line of defense is to fight back. They have pressured their representatives in Congress — the folks who they donate a lot of money to — and as a result, many Congresspeople have decided to vote “NO” on TPP ratification.
There’s been no more vocal opponent to the diminished biologic patent period in the TPP than Sen. Orrin Hatch (R-UT). You might think, “Well, Hatch was going to vote ‘NO’ anyway…”. No, he wasn’t. In fact, Sen. Hatch was a leader in the push for both Fast Track trade promotion authority (TPA) and the TPP. (TPA was the prelude legislation to the TPP, which famously gave away Congress’ right to examine, debate, and amend the TPP prior to its ratification vote.)
The outlook for the TPP has gone from favorable to mediocre to bad, in the course of the last twelve months since the TPA vote. Sen. Hatch has urged U.S. Trade Representative Michael Froman and President Obama to solve the pharmaceutical problem, and has stated that the TPP cannot pass the ratification vote in the Senate under the current circumstances.
The Fix Is In
TPP proponents have become desperate to fix the pharmaceutical problem, and the fix has arrived, coming from two of the most ironic sources: a Congresswoman from Chicago, and Sen. John McCain. You can’t make this stuff up, folks.
I had already noticed a trend in that Congress is attempting to resolve various conflicts in advance of the TPP ratification vote, and they’re doing so by changing U.S. laws. This is a stealth approach to avoiding public controversy, leading into the TPP vote; because if these situations are changed via legislation in advance, then they won’t remain as TPP problems when the media’s talking about the pending ratification vote in the fall of 2016.
On June 23, 2016 Rep. Jan Schakowsky (D-IL-09), who represents a Congressional district adjacent to the politically righteous city of Chicago, and who opposes the TPP, introduced legislation in the House of Representatives that shortens the period of patent exclusivity for U.S. biologics from 12 years to seven years.
The legislation is named the Price Relief, Innovation and Competition for Essential Drugs (PRICED) Act — or H.R. 5573 and S. 3094 respectively.
U.S Senate co-sponsors of the legislation include Sen. John McCain (R-AZ), who supports the TPP and Sen. Sherrod Brown (D-OH), who is very open to trade deals, especially under a Hillary Clinton presidency.
This piece of legislation is not a random coincidence to the TPP problem. It was clearly designed to resolve the TPP problem, by removing many Congresspeople’s objections to the TPP.
Who Came Up With This Big Idea?
Rep. Jan Schakowsky is ostensibly a strong opponent to the TPP. Yet the PRICED Act removes the biggest stumbling block to the TPP’s passage. What is she thinking? Could she be this dumb? Who put her up to this?
As recently as May 19, Rep. Schakowsky commented on the TPP:
“This trade deal would hurt American workers,
harm our manufacturing sector, and increase our trade deficit…
That is why I will continue to fight to stop the TPP …”
Has she been blackmailed, or offered some significant reward for putting forth this legislation? Is the reward more important to her than her opposition to the TPP?
<enter Senator Sherrod Brown, stage left>
Why is Senator Brown involved in this scheme? Because he’s lining up his next job.
In a March 14, 2016 interview about the TPP, Sen. Brown said, “And Hillary can cite ‘chapter and verse’ about what’s wrong with it — AND How to Fix it. And I will be standing with her, as she does that, when I’m Chairman of the Banking Committee in 2017, and sit on the Finance Committee that works on Trade Deals.”
I know that Mrs. Clinton likes to tell the world that she’s against the TPP, but her very public track record of support for the TPP belies her current stance. Clearly, Sen. Brown is anticipating a Clinton administration that embraces the TPP.
And that brings us to… <drumroll, please> … Senator John McCain, a man for whom crossing the aisle became so exhausting that he decided to conserve energy by permanently camping out with the donkeys.
Senator McCain is a huge proponent of the TPP. He and Senator Brown likely realized that their only remaining course of action to fix the pharmaceutical problem in the TPP was to legally changing the U.S. biologic patent exclusivity period from twelve years down to seven years. Presuming that this change is accomplished in Congress in September 2016, it will free up many Congresspeople to vote “YES” on the TPP.
Those of us who despise rampant political corruption and corporate cronyism should pause to savor the image of Senators McCain and Brown throwing Big Pharma under the bus.
In recent weeks, U.S. Trade Representative Michael Froman announced the administration’s intention to schedule the TPP vote during the lame duck session of Congress.
Come November, Congressional opponents to the TPP will certainly be chagrined that the U.S. biologic period of patent exclusivity was reduced via the PRICED Act. At that point, they’ll be more likely to cave to pressure from political leadership to vote “YES”, because pressure from their contributors will have been neutralized, and pressure from voters during their reelection campaigns will have subsided.
How The PRICED Act Vote Will Play Out
<cue the violins>
Rep. Schakowsky is going to sell the PRICED Act to Congress with an emotional appeal about greedy corporations and people dying due to prohibitive drug prices. Most Democrats will vote for it, and most TPP supporters will vote for it, because Senators McCain and Brown will already have spoken to them about “the fix” on the TPP.
Meanwhile, Congresspeople who oppose the TPP will be horrified at this outlandish scheme to pass the TPP; and free market capitalists and business people on both sides of the aisle will be outraged that Congress is forcing private industry to conform to yet another very expensive piece of legislation.
How many TPP “NO” votes will turn into “YES” votes, once the problem with the U.S. period of biologic patent exclusivity has been removed? Compound that question with other recent, seemingly-innocuous legislative changes that have been quietly happening, and my assessment is that the potential TPP vote will morph from a slam-dunk “NO” vote to passage or defeat by a slim margin.
I encourage all TPP opponents to take action now:
Express your opposition to both the PRICED Act and the TPP to your Congresspeople and Senators.
Help Dr. Kelli Ward (R) #RetireMcCain in the Arizona primary election on Tuesday, August 30.
Help Joan McCarthy Lasonde (R) defeat Rep. Jan Schakowsky (D-IL-09) in the Illinois general election.
We can defeat the TPP. Opponents to the trade deal are not behind in this contest, but we’re not far in the lead either. Keep the pressure on.