Clear The Air News Tobacco Blog Rotating Header Image

Leaked Trade Deal Terms Prompt Fears for Pharmaceutical Benefits Scheme

11 June 2015

Gabrielle Chan

The leak of new information on the Trans-Pacific Partnership agreement (TPP) shows the mega-trade deal could provide more ways for multinational corporations to influence Australia’s control of its pharmaceutical regulations.

Revealed via Wikileaks, the annexe on “transparency and procedural fairness for pharmaceutical products and medical devices” uncovered the draft agreements regarding medicines between the 12 TPPA member countries.

The leak comes as US Republican leaders announced a vote on Friday that may provide Barack Obama a fast-track authority to complete the agreement with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The countries represent 40% of the world’s economy.

The leaked text, dated December 2014, laid out the draft rules for member countries regarding medicines under national health care programs, in Australia’s case, the Pharmaceutical Benefits Scheme (PBS). The TPP has yet to be signed off.

The Abbott government has argued the trade deal will provide access for Australian products to other markets. But it requires Australia to trade off regulations that stop access by other countries and particularly multinational companies to the Australian market.

Critics have suggested the deal, which is likely to include Investor State Dispute Settlement (ISDS) clauses, will allow big corporations to sue Australian governments. Philip Morris International is currently challenging the former Labor government’s tobacco plain packaging laws under a Hong Kong trade treaty ISDS.

Trade experts leaped on the rare information release regarding the secret but wide-ranging trade deal. Deborah Gleeson, a lecturer at the school of psychology and public health at La Trobe University, said the inclusion of an annexe on health “serves no useful public interest purpose”.

“It sets a terrible precedent for using regional trade deals to tamper with other countries’ health systems and could circumscribe the options available to developing countries seeking to introduce pharmaceutical coverage programs in future,” Gleeson said.

Jane Kelsey of the faculty of law of the University of Auckland described the annexe as one of the most controversial parts of the TPP in her analysis. She said the US pharmaceutical industry was using the trade agreement to target New Zealand’s Pharmaceutical Management Agency (Pharmac), equivalent to the PBS.

“This ‘transparency’ annexe seeks to erode the processes and decisions of agencies that decide which medicines and medical devices to subsidise the public money and by how much,” Kelsey said.

“This leaked text shows the TPP will severely erode Pharmac’s ability to continue to deliver affordable medicines and medical devices as it has for the past two decades.

“That will mean fewer medicines are subsidised, or people will pay more as co-payments or more of the health budget will go to pay for medicines instead of other activities or the health budget will have to expand beyond the cap.

“Whatever the outcome, the big global pharmaceutical companies will win and the poorest and most vulnerable New Zealanders will lose.”

AMA president Brian Owler said while doctors were very concerned at the possible effects on Australia’s healthcare systems, they were constantly dismissed by the trade minister Andrew Robb.

“When we have raised concerns about the effects on health, the only response is ‘we are not going to undermine the Pharmaceutical Benefits Scheme’,” said Owler.

“We are worried about the Investor State Dispute Settlement (ISDS) mechanism and there are issues in terms of patents that would affect pharmaceutical prices.

“The problem is our concerns have been dismissed by the trade minister but we do not know what is in the text.”

However, Robb said on Thursday that the government would not accept anything that would adversely affect the PBS, the health system more generally, or increase the price of medicines for Australians.

“It’s perhaps time to look at the enormous benefits that will flow from a more seamless trade and investment environment across 12 countries representing 40 per cent of global GDP,” Robb said.

“New levels of market access and common sets of trading rules will help support growth, create new jobs and result in higher living standards.”

Parliamentarians were offered the chance to see the TPP draft by Robb if they agreed to a four year non-disclosure agreement.

A cross-party parliamentary working group has formed, including Greens senator Peter Whish-Wilson, Labor MP Melissa Parke and independent senator Nick Xenophon.

Whish-Wilson, who has not seen the draft as he refused to agree to the terms of the agreement, said the latest leak suggested the Australian PBS could be undermined.

“These negotiations are happening behind closed doors, without the scrutiny of the parliament,” he said.

“At the very least, the Australian people deserve to be reassured that the government won’t allow any deal which drives up the public health costs for Australian taxpayers such as further subsidising important new medicines including biologics.”

During the most recent senate estimates in the past fortnight, Whish-Wilson questioned officials from the department of foreign affairs and trade about the strategic importance of the TPP to the United States.

The secretary of Dfat, Peter Varghese, said the whole purpose was to indicate a “ramped up US presence in Asia”.

“The conclusion of the TPP is important to the United States in terms of its re-balance, because it is an important step in relation to the economic engagement of the United States with the region, and the whole purpose of the re-balance was to indicate a ramped up US presence in Asia, and a recognition of the importance of Asia in broader US geostrategic thinking,” Varghese said.

“We in Australia have never seen the TPP as an instrument for locking anybody out— in fact, quite the contrary.”

The trade minister’s office was contacted for comment.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>