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President Trump speaks on the phone with Mexican President Enrique Pena Nieto in the Oval Office. Photo: Win McNamee/Getty Images

The Trump administration's announcement of a new trade "understanding" with Mexico yesterday included a bullet point on drug patents that could have big implications for the pharmaceutical sector, but is severely lacking in detail.

Why it matters: The issue of drug companies' patent exclusivity period was a huge deal as the Trans-Pacific Partnership was being debated, and there are warning signs that the same lawmakers who took issue with the handling of biologics in that deal also are worried about this one.

  • “I’m not real happy with it," Senate Finance Chairman Orrin Hatch told me yesterday. "It’s not a long enough exclusivity. But it’s a step in the right direction. No question.”

What we know: The understanding "includes 10 years of data protection for biologic drugs and expanded scope of products eligible for protection," according to a press release from the United States Trade Representative.

  • Current U.S. law protects drug patents for 12 years, but there are currently no data exclusivity protections for biologics in NAFTA.
  • TPP included 5 years of market exclusivity, which was a huge problem for the industry because it wanted more.

Pharma's reaction: “We look forward to analyzing the final text of the agreement once completed to ensure it includes policies that protect against global free-riding, promote research and development and reward ... innovation," said a spokesperson for the Pharmaceutical Research and Manufacturers of America.

What they're saying: “We feel this is bad news for patients who are seeking more affordable biologics. It would delay biosimilar competition," said Jeff Francer, general counsel for the Association for Accessible Medicines.

  • The other side: "That’s significant movement from where [former President] Obama was," said a former GOP Hill aide who was close to the TPP debate. "It’s a big deal because it resets the norm and trade template under [President] Trump."

The bottom line: If pharma gets an expanded class of products eligible for patent exclusivity, it could be a very good deal for them — even if it is shorter than U.S. law.

Go deeper

Fed chair says low interest rates aren't driving stock market prices

Jerome Powell. Photo: ANDREW CABALLERO-REYNOLDS / Getty Images

Federal Reserve chairman Jerome Powell told reporters on Wednesday that rock-bottom interest rates aren't playing a role in driving stock prices higher, while noting that vulnerabilities to the financial system are "moderate."

Why it matters: The statement comes amid unshakeable stock prices and a Reddit-fueled market frenzy — prompting widespread fears of a bubble and the role monetary policy has played in that.

2 hours ago - World

Biden freezes U.S. arms deals with Saudi Arabia and UAE

Trump struck several large arms deals with Mohammed bin Salman (L) and Saudi Arabia. Photo: Kevin Dietsch-Pool/Getty Images

The Biden administration has put on hold two big arms deals with Saudi Arabia and the United Arab Emirates which were approved in the final weeks of the Trump administration, a State Department official tells Axios.

Why it matters: The sales of F-35 jets and attack drones to the UAE and a large supply of munitions to Saudi Arabia will be paused pending a review. That signals a major policy shift from the Trump era, and may herald sharp tensions with both Gulf countries.

Dan Primack, author of Pro Rata
3 hours ago - Podcasts

Robert Downey Jr. launches VC funds to help save the planet

Robert Downey Jr. on Wednesday announced the launch of two venture capital funds focused on startups in the sustainability sector, the latest evolution of a project he launched two years ago called Footprint Coalition.

Between the lines: This is a bit of life imitating art, as Downey Jr. spent 11 films portraying a character who sought to save the planet (or, in some cases, the universe).