USMCA is signed – and introduces 10-Year Drug Patent Terms
5 diciembre 2018

On November 30, the Mexican, Canadian and American Heads of State (Enrique Peña Nieto, Justin Trudeau and Donald Trump respectively) signed the renegotiated North American Free Trade Agreement – renamed the United States-Mexico-Canada Agreement. Under the new agreement, compulsory patent and data protections for biotechnological drugs have been raised from 8 years to 10 years. The new treaty – USMCA – must now be ratified by the three countries’ legislatures. In the case of Mexico, the updated treaty must be introduced to the Senate for ratification. The agreement is expected to come into force in the second semester of 2019 or the first semester of 2020.

The new agreement stipulates that patents and data from biotechnology companies must be protected for a period of 10 years (currently NAFTA stipulates 8 years of protection). The Mexican pharmaceutical industry has reacted negatively to this announcement; the Mexican Association of Generics (Amegi) has said in the past that this measure would entail a considerable expense for the country’s pharmaceutical companies, which will face higher production costs that in turn “could lead to a serious shortage of drugs”.

In the following report, you will find a brief timeline of the treaty negotiations, as well as a more detailed description of the main points of the relevant chapters. It also provides an explanation of the next steps for the treaty to take effect and replace NAFTA.

Ratification of the treaty will now depend on the respective national legislatures. In Mexico, the treaty will be introduced to the Senate, which will be charged with voting on it. While this chamber may modify the text, Mexican Secretary of Economy Ildefonso Guajardo expressly requested that the Senate not modify the agreement to facilitate its ratification. Canada is expected to ratify the agreement quickly in view of its simpler legislative procedures. Finally, the United States will wait until 2019 to do so as a result of the legislative elections last November 6 and the subsequent change in the composition of Congress. The treaty is estimated to enter into force in the second half of 2019 or the first half of 2020.