Why Obama needs PhRMA

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[Vicki Needham| September 28, 2016 | The Hill]

Business groups are facing a major problem in their final push for passage of President Obama’s signature trade agreement — a lack of unity.

While groups like the National Association of Manufacturers (NAM) and the U.S. Chamber of Commerce are committed to passing the Trans-Pacific Partnership (TPP), the advocacy push is missing a heavy hitter: the pharmaceutical industry.

Labor unions and environmental groups opposed to the deal, meanwhile, are marching in lockstep against it.

The disparity comes at a time when the politics of trade have taken a turn for the toxic.

Lawmakers on Capitol Hill are expressing grave doubts about approving the deal after the elections, and both major-party presidential candidates — Donald Trump (R) and Hillary Clinton (D) — oppose it.

Getting the pharmaceutical lobby behind the TPP would give the Pacific agreement its best chance to pass this year and would likely attract some vital lawmaker endorsements.

But the industry is still withholding support as it seeks a deal on the length of data protections for high-tech medicines known as biologics. 

Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA), which represents dozens of top pharmaceutical 
companies, told The Hill that short of a final agreement on biologics, nothing has changed in the industry’s opposition to the deal since the TPP was completed nearly a year ago. 

“I hope the president and Sen. [Orrin] Hatch [R-Utah] can come up with a good solution,” Grayson told The Hill, referring to the chairman of the Senate Finance Committee, a panel with jurisdiction over trade.

Pharmaceutical companies want 12 years of data protection for biologics, which is the U.S. standard, but the agreement instead sets the maximum at eight. 

If that were addressed, the industry could throw its support behind the deal, potentially providing the momentum supporters need to at least get a vote in the lame-duck session.

At this point, Republican and Democratic lawmakers say there are constructive conversations being held around the biologics issue.

A solution that satisfies concerns of the pharmaceutical industry would likely trigger Hatch to support the TPP. The senator recently said he is working with the Obama administration to resolve the issue of data protections, which he thinks would pave the way for a lame-duck vote on the TPP. 

“They know they have to come through,” Hatch told The Hill about the White House’s efforts. 

“There are ways of doing it, and they’re just going to have to do it,” he said. 

But details on how the issue might actually be settled remain elusive. 

U.S. Trade Representative Michael Froman has said the biologics provision, which was the last one resolved in the deal, can’t be renegotiated. That means that the issue must be dealt with through other channels.

Obama is urging Congress to pass the trade deal before he leaves office, calling it vital not only for the economy but also for American foreign policy.

The business community acknowledges the importance of having the Republican majority behind the TPP, especially because most Democrats remain opposed.

“From our perspective, it’s absolutely critical. There are these outstanding issues, and there is work ongoing, and we are urging the administration and congressional leaders to find a path forward,” said Linda Dempsey, NAM’s vice president of international economic affairs.

“Being able to join with that sector [pharmaceuticals] and other parts of the business community on this if we can get these issues resolved is absolutely critical,” Dempsey said.

Sean O’Hollaren, senior vice president of government and public affairs for Nike, said resolution of any outstanding issues, especially on biologics, would help business groups match the firepower of the opposition. 

“We’re hoping if they do get resolved that the full shoulder and a unified pro-trade voice comes into play here,” O’Hollaren told The Hill.  

In fact, the financial services sector, another influential lobbying force, only joined the ranks of TPP supporters in July. 

That support was dependent on an agreement with the White House that ensures foreign governments will be prohibited from requiring companies to physically store data in a specific country.

Rep. Don Beyer (D-Va.), a supporter of the TPP, said getting pharmaceuticals on board would make all the difference in whether the deal can be passed this year. 

“That would help immensely,” Beyer said. “We need Sen. Hatch to say we’re ready to go,” he said. 

“If the Senate sends it to us with their passage my sense is that [House Ways and Means Committee Chairman] Kevin Brady [R-Texas], especially, and [Speaker] Paul Ryan [R-Wis.] will want to get it right on the floor.”

Leslie Griffin, senior vice president of international public policy for UPS, said there are serious efforts underway between the administration and industry that could determine whether the TPP has any shot of passing before Obama leaves office.

“The more industries that are happy with the outcome of this agreement that can give their full-throated endorsement, obviously the better,” Griffin told The Hill. 

“We will welcome their support in the homestretch in talking about TPP and educating members of Congress,” she said. “We hope to see a resolution to that issue.”

Brady said Tuesday that time is running short if the Obama administration wants to get the TPP through Congress this year.

“I hope we do get it done” during the lame-duck session, Brady said at an event at Peterson Institute for International Economics. 

“I think we will max out Republican votes on TPP if these issue are resolved,” he added.

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