Drug companies appear to have lost their fight to include longer-term protection against cheaper copies of some of their products in the historic trade pact reached Monday by the United States and 11 other Pacific Rim nations.
While all the details weren’t immediately available, initial reports of a compromise struck between US and foreign negotiators said the sweeping Trans-Pacific Partnership won’t provide the 12 years of commercial protection the US-based biopharma industry had sought.
“The US takes all the risk and everyone else benefits,” said Harry Glorikian, a Lexington life sciences consultant who advises biotech companies. “If our companies can’t make enough money to fund innovation, who’s going to develop these next-generation drugs?”
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Market protection for so-called biologics, or drugs made from living cells, emerged as a stumbling block in the trade negotiations. American negotiators had pressed to give drug makers a dozen years of exclusivity, the same amount of time granted by Congress in the United States, before having to share technical data that could enable rivals to develop generic copies of their treatments.
Negotiators from Australia and New Zealand, eager to get lower-cost drugs on the market faster for their consumers, had pushed for a shorter five-year data-exclusivity period. The compromise reportedly involves a two-track process ultimately extending five to eight years of protection from generics.
The benchmark Nasdaq Biotechnology Index closed down less than 1 percent, while the broad Standard & Poor’s 500 index climbed 1.8 percent.
“We are disappointed that the [trade] ministers failed to secure 12 years of data protection for biologic medicines, which represent the next wave of innovation in our industry,” Pharmaceutical Research and Manufacturers of America, a national industry trade and lobbying group, said in a statement.
“While we await the final details, it appears that the ministers missed the opportunity to encourage innovation that will lead to more important, life-saving medicines.”
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Representatives of biotech industry groups in Washington and Massachusetts, an industry hub, declined to comment until they had more information about the trade pact’s provisions.
Understanding the effects will be complicated by the move by some drug makers, such as Switzerland’s Novartis AG and Cambridge-based Biogen Inc., to market the generic biotech drugs themselves. In addition, even with requirements for the faster release of technical data, making copycats of organic, protein-based drugs, known as biosimilars, is considered a difficult task.
So far, only one such drug — Novartis’s version of a chemotherapy made by Amgen Inc. — has been approved for sale in the United States, though others are on the market in Europe.
“You’re not going to rapidly be able to engineer a copy of a complex biologic molecule regardless of when companies have to free up biologics data,” said consultant Jonathan Gertler, senior partner at Back Bay Life Science Advisors in Boston.
Gertler said the trade pact will probably be modified before it takes effect. But even if it ultimately restricts protection, it would be just one of many regulatory and pricing challenges that the industry will face in coming years as it struggles to become more efficient, he suggested.
“This may be the start of a change on a global level, but I don’t think this is going to be a sea change in and of itself,” he said. “It’s going to be evolutionary.”
The surge in prices of prescription drugs, especially therapies treating small populations of patients, has provoked a backlash from consumers and health insurers.
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But if drug makers’ profits are squeezed by shorter exclusivity periods, they might be tempted to set initial prices even higher that they might otherwise do, Glorikian warned.
“From a business standpoint, it might force the manufacturers to come up with higher prices so they can recoup as much as they can in the beginning,” he said. “If they don’t make enough, how are they going to fund the next drugs? This is not a trivial matter for a biotech.”
Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.